In October 2014, Halifax Health officially engaged Healthcare Strategy Group to manage its physician network. In this interview with HSG Partner John Hill, Chief Medical Officer Donald John Stoner, M.D. talks about the reasons why Halifax decided to outsource the management of their physician network.
Dr. Donald Stoner hallifax

Like many U.S. hospitals, Halifax Health was no a stranger to employing physicians or trying to get them to work together on common goals. “Fifteen, twenty years ago, we formed a group called Associates in Medicine with the hospital. It was ahead of its time. We were dealing with many of the same issues we are dealing with today – productivity, alignment,” recalls Dr. Stoner. “Unfortunately, it terminated badly on both sides and left a bad taste behind. We shied away from employing physicians for quite awhile.”

What got Halifax back into the physician practice business was call pay. “We have a policy that we don’t pay for call. We’re on a tight budget and physicians on the medical staff have a community obligation to take call up to seven days a month,” Dr. Stoner explains. “We started out hiring hospitalists and intensivists, but we had to keep adding hospital-based specialties for call coverage – neurosurgeons, plastic surgeons and a couple of other specialties. Whether we were trying to or not, we were slowly building a good-sized employed group.”

The system was also facing intense competition from another provider, which was actively purchasing physician practices. The hospital couldn’t sit idly by while its market share was bought out from under them. So, “after a lot of healthy discussion and with the full support of the medical staff, we decided to build a multi-specialty group for population health management and bundled pricing,” Dr. Stoner says. “It’s never been our intention to get into the ACO business, but every hospital has to be prepared for value-based reimbursement.” Their decision to outsource the physician network’s management was a direct result of their 1990s-era foray into physician employment. “We learned a lot from that experience. We learned that hospital-based personnel don’t have the expertise to manage community-based practices!” Dr. Stoner says with a laugh.

And Halifax also had experience with outsourcing other physician services in the recent past. “We’ve had assessments done on our anesthesia group, in infectious disease coverage and emergency room staffing. Sometimes it takes a fresh set of eyes to look at a problem without the biases that can come from an inward focus,” he observes.

He feels one of the most important changes HSG has wrought thus far is the formation of a new Governance Council to oversee the network’s operations. “We wanted five physicians on the council and received 18 applications,” he says with obvious delight. “That allowed us to place at least one physician who was interested in governance, but not selected for the council, to serve on each of the council’s subcommittees. That way, when the governance council positions come up for election in two years, we’ll have a strong, educated base of candidates. We hope to utilize the process of committee formation to serve as a building block
for future leadership.”

Dr. Stoner also believes that having HSG’s seasoned bench of “… experienced physicians and administrators available for consultation and to help formulate group thinking … “has added credibility to the changes being made to the physician network. “Having Pat Connors on site has … given a ‘face’ to the process and created a ‘go to’ person when physician questions arise,” he notes. “As it is essential to build communication and trust, trying to do this without appropriate administrative leadership would have been very difficult.”

Neal D. Barker

Partner and Managing Director, Compensation and Compliance