Building Management Expertise for Your Employed Physician Network

Hospitals and health systems have been aggressively investing in their employed physician networks for the last 10 years or more. Most, however have not developed the leadership infrastructure or acquired the management expertise to effectively manage these networks.

HSG has developed a multi-faceted approach to support you in your efforts to build a high-performing network.  We offer the following array of services and capabilities, depending upon the needs of our clients:

  • On-site, day-to-day management of the physician network via contract.
  • Management advisory services to support and enhance your existing team
  • Recruitment of seasoned Executive Directors and Vice Presidents to manage and operate your network
  • Interim management services to supplement or fill in until a permanent person is recruited for the position

HSG’s team is there to support you. Having HSG’s support team to back you up gives you the confidence to tackle tough issues and remain focused on long-term goals. You don’t have to go it alone.  And confidence that the network is under control will free up system/hospital executives to focus more on building the key physician relationships that are essential for the organization to succeed.

Common Challenges for Employed Physician Networks

As growth of employed physicians has accelerated, it has created a number of challenges for health systems employing physicians.
Employment as a strategy makes sense but the devil is in the details. Health systems are struggling to reduce direct practice operating losses, build trust with the physicians, assemble appropriate support teams, and meld disparate physicians into a cohesive network.

What most hospitals and health systems have learned is that this is a complex endeavor requiring a focused attention to detail.  Each physician has issues that are important to them. If these issues are not addressed appropriately, these physicians will push back, resulting in a loss of trust or faith in hospital administration. But this can lead your executive team to spend time putting out fires rather than focusing on achieving critical network goals.

To bring structure and strategy to the development of your physician network, developing a comprehensive plan that defines the network’s role in the overall organization is a must.  The following is a summary of the key challenges that hospital executives must address in this type of plan in order gain value from the employed physician network:

  • Melding disparate physician cultures into a unified and cohesive group culture. Culture trumps all other issues in employed physician networks. Without it, all you have are physicians with the same tax ID.
  • Integrating physicians and their practices onto a common IT and EMR platform. Information Technology and EMR issues will be ongoing challenges throughout the life of the network.  Too often, physicians are resistant to changing systems due to their investment of time in resources into the platform they have historically used.  Failure to rein in this dynamic results in a network that can’t effectively coordinate care.
  • Onboarding new physicians, practices, and their staff. This activity is often taken for granted and not done very well. There is a direct correlation between how well onboarding is done and the physicians’ overall level of satisfaction, performance and retention.
  • Communicating information about network, practice and provider performance. Poor communication from administration and not sharing pertinent practice information is a common complaint from physicians. It is imperative that physicians stay engaged and collaborate in the management of their practice and have input into the management of the network.
  • Optimizing revenue cycle performance. Physician billing is high volume, low revenue as compared to hospital billing. To be effective in revenue cycle there are two options: either build a central business office function, or outsource. If revenue cycle results are not up to par, the physicians will challenge your financial results.
  • Building a shared vision with the physicians. Physicians often have a good understanding of how a group needs to evolve to thrive. They understand how they could better serve patients, how variability in care represents an opportunity to improve, and why physician leadership is crucial to meeting health system and patient needs. All these understandings need to be melded with organizational imperatives to set the vision for the network’s future success.

Putting Your Network’s Challenges in Context

The magnitude of these challenges varies depends upon its stage of growth. The Physician Network Growth Phases. illustrates what HSG has identified as the six stages in the evolution of the network. Each phase presents different opportunities, resource requirements, and challenges for the hospital and physician network.

The most common stage for existing physician networks is “Operational Chaos.” These networks have rapidly grown, but have not built up the management infrastructure to support a large network, and thus are experiencing numerous operational challenges as the network assimilates physicians with different cultures. This period is very stressful for both the physicians and the management team, as operating losses continue to increase.  Building the management infrastructure and getting the right talent to lead the network is a challenge that must be overcome.

To view the complete growth phase information click here.

As your network moves to the Strategic Focus and Value Phases, the expertise needed for success changes.  You will need more focus on the groups vision and strategic priorities.  In the value phase, more clinical expertise is required, as your network will need to improve the reliability of its care process to improve costs and quality.

Network Operational Principles

Building, developing, and managing a large employed physician network is not the same as running a hospital; different expertise is required. To do it well, health systems need to address these core questions.

  1. Do I have the right strategy for growing and developing the physician network?
  2. Does that strategy support the system (or Hospital) strategy?
  3. Are we evolving our network’s capabilities over time to support that strategy?
  4. Are the losses from the physician network sustainable and do we have the management team to ensure they are minimized?
  5. Does your executive team have the experience to be confident you understand the tactics required to address 1-4 above?

Having a framework to help you diagnose the answers to those questions is very helpful.

HSG looks at 8 key elements that are essential to a high-performing physician network.   Below we discuss how we look at these elements when we are engaged with a client.

  • We develop a shared vision document and strategic plan for the network. This ensures that everyone is on the same page going forward.
  • The shared vision document is the foundational element for building culture. We couple this with the formation of a Physician Advisory Council and enhanced communication of performance metrics to solidify the group culture.
  • We focus on building a network where patient care and quality are foremost in terms of objectives. We have specialists that will help your group think through MACRA and MIPS.
  • Brand/Identity. We work with the hospital to ensure that the network takes advantage of positive brand identity.
  • Physician Leadership. In addition to the Physician Advisory Council, our team works with the executives and key medical staff leaders to identify future physician leaders and the training options that will help them develop their leadership capabilities.
  • We help you determine the level of infrastructure will you need as the network grows and how to scale it in to optimize the cost benefit.
  • Financial Sustainability. An important focus for our team is building a network that is financially sustainable. The strategic planning process includes financial projections so that you can gauge the impact of future operating plans on the hospital.
  • Aligned Compensation. Our team will work with you to review the existing compensation model and help formulate a model that incorporates base, productivity, quality, and other considerations that help align provider incentives with organizational direction.

By focusing on these elements, and investing in the management team to guide their implementation, you will improve the performance and direction of your network.  Click on the link below to download a copy of our white paper on Physician Network Growth Phases.