Physician network development progresses on a life cycle bell curve. Knowing where you are on that curve is crucial to your progress toward becoming a clinically integrated system.
We generally see six stages of development. On the undeveloped side of the curve are the Novices. At the other end are the Mature groups — groups that have the culture and capability to manage the care of the populations they serve.
Most client networks are neither of those extremes and fall into the four stages closest to the center: Growth Mode, Operational Chaos, Strategic Focus, and Value Phase.
Growth Mode
Growth Mode-stage networks are accumulating physician resources to build market share in the fee-for-service world or as a defensive move in response to competition. They have no strategic focus (beyond volume) and little operational discipline. If this describes your group, our advice is to:
- Be selective about whom you employ and build an employment strategy to help you avoid mistakes.
- Focus on excellence in due diligence.
- Have a philosophy for structuring deals/contracts to avoid mistakes that will haunt you down the road.
- Begin building a Physician Advisory Council to help with tough decisions.
- Get outside advice on physician compensation systems as early errors are difficult to fix.
Operational Chaos
Networks in the Operational Chaos stage of development cycle have grown, but lack group integration and adequate infrastructure, resulting in unsustainable losses. Our recommendations to these groups are:
- Invest in management. Start constructing the management infrastructure needed.
- Build revenue cycle capabilities and systems into the infrastructure.
- Focus intently on management reporting, including a dashboard that can grow with the group.
- Challenge the Physician Advisory Council to lead the effort to develop a group practice approach and culture.
- With the physicians, build a long-term vision of how the group will evolve and support the health system’s organizational strategy.
Strategic Focus
In this phase of the development cycle, the network’s operations are better aligned and the focus shifts to strategy. This is the time when the foundations for population management capabilities are laid. Weak/poor physicians who will not be successful in a value-based environment are culled from the group. In this phase, we suggest a focus on:
- Planning to deal with clinical integration.
- Investing in best practices and reducing variation.
- Ensuring appropriate referrals stay within the network.
- Developing physician leadership to spearhead the transitions required.
- Making tough decisions about network composition – who’s in, who’s out.
- Tightening and building management capabilities.
Value Phase
Networks in the Value Phase of development are more integrated and learning how to produce value from this integration. The employed network is leading the charge to improve quality, serves as the core physician network for managed care offerings, and is the locus of the system’s efforts to control risk. Key activities should include:
- Utilizing physician leaders in discussions with payers.
- Evolving compensation to address risk and quality incentives.
- Defining provider productivity from a population management perspective.
- Building information systems beyond managing the business to managing patient populations.
- Integrating the group and system strategy into a clinical integration strategy.
Through each of these phases, strategy is a common theme. Actively discussing strategic intent, engaging physicians in those discussions, and creating a common vision that is accepted and embraced by the doctors is critical to long-term success.
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Whatever phase of development your physician network is in, actively engage in planning for how to get to the next phase. |
Most networks are continuously striving to improve, so the development curve is always migrating to the right. Your group management’s ability to push your network to the right faster than the competition will have a big impact on the long-term strength of your health system. It’s difficult to envision a resilient, successful system without the capabilities delivered by such a physician group.