Note: This is the second post in a series about integrated delivery systems (IDS). Previously, we addressed why medical practices bleed red ink following integration.
No medical group practice is immune to integration. Some physician practices are joining IDSs, also known as hospital health systems, while others – usually smaller groups – are combining to form multispecialty practices to compete in the new marketplace. Given the realities reflected in MGMA's recent study on medical practice challenges, remaining a small, independent group is no longer feasible in many markets. But organizational changes aren't the only change – the leadership team must also merge to support the new structure.
So, what happens to the leaders of the medical practice - the administrator and physician team - after integration?
According to Nick Fabrizio, PhD, FACMPE, FACHE, when an IDS has experience managing a physician practice, the operations of the group and physicians' involvement in planning and delivering healthcare won't change.
Unfortunately, that's not always the case. This shift in ownership may lead physicians to think they can step back from the business of medicine and let the hospital take care of nonclinical operations. "This is a bad idea," says Fabrizio, a principal consultant for the MGMA Health Care Consulting Group and co-author of the new book Integrated Delivery Systems: Ensuring Successful Physician-Hospital Partnerships. "At a minimum, there has to be a physician leader and they must still be involved with the operations of the group" for the merger to do well.
Fabrizio's book emphasizes the importance of the new leadership team – and who's involved: "Physician practices cannot be successfully managed as another hospital department is managed ... IDS leadership should obtain buy-in from those physicians who will help the organization achieve all goals. Leaders must involve those physicians from the beginning of the strategy development."
Physician practice administrators are key to helping their physicians and staff integrate into the new culture of the IDS. Their knowledge is invaluable, because hospital administrators, skilled at running inpatient operations, generally struggle with managing ambulatory-care organizations. In fact, a common integration pitfall occurs "when a hospital acquires a group and makes it use the hospital's practice management system, which is inpatient-based and does not meet the needs of [ambulatory-care] clinics," says Fabrizio.
Two tips for successfully merging hospital-practice leadership teams:
- The administrator and physician leadership team of the former practice have to understand hospital culture, including the new speed of decision making and chain of command. "Most major decisions that involve spending or recruitment now have to be referred to a higher level," Fabrizio says. This abrupt workplace shift means an administrator-physician team needs to have the skills to work with hospital leaders, including the chief executive officer and the vice presidents of strategic planning and medical affairs.
- Effective communication channels in the new organization will build the trust the health system needs to succeed. "Just saying, 'Trust me, everything's going to be OK' – that's not going to cut it," says Fabrizio. He suggests setting strategic planning meetings that involve hospital and practice leaders in the same room to begin working toward the same goal.
Ultimately, what makes most integrations, or collaborations, successful is that the leaders of both teams (whether a practice and a hospital, or two practices) have taken time to develop a win-win situation. And it's not just about money. Fabrizio says, "It's understanding the issues in the community. What are the major health needs? What are the gaps? What's happening on the national landscape?"
Listen to our interview with Fabrizio for more tips on successful integration, and don't miss your opportunity to learn all about IDSs in his sessions at the MGMA 2009 Annual Conference.