MGMA In Practice blog

By Vincent Lynn, account executive, Health System Relations
MGMA Business Development

Note: This is the third post in a series about integrated delivery systems (IDSs). Previously, we described how to create a new health system leadership team.

It's no secret that more and more groups are joining the integrated delivery system (IDS) model, but what happens after all the research is done, the decisions made and the contracts signed?  Even in optimal agreements, integration causes major changes for both parties involved. Here are four common post-integration issues that occur in successful arrangements and how to address them:  

1. Harmonizing work cultures
   This is probably the most common issue after any type of merger, and although it's a long-term transition, you must actively manage it.
   
   From the group's perspective: Establish common work-culture expectations acceptable to both parties. Get buy-in from everyone in the group, from receptionists to physicians. It's important that all employees participate in the process, especially those who have long tenures at your organization, because they may think the changes don't apply to them. Open, honest and regular communication will solve and/or prevent these issues.
   
   From the hospital's perspective: Your representative and the physician group's leader should meet regularly to resolve any discrepancies or issues that arise in the new work culture. The group leader can help you understand the compensation arrangements, the practice's finances and even more important, the human factors: how the physicians interact with one another and their staff, staffing ratios and workplace attitudes.
   
2. Significant others in the workplace
   Lots of workplaces employ married couples or significant others (e.g., a practice administrator who runs her physician husband's business). Before integration, this may not be a problem. But after merging with a health system, this relationship can muddy personal vs. professional decisions and lead to staff distrust.
   
   From the group's perspective: Expect and be prepared for changes in staffing that wouldn't have occurred before integration. On the flip side, new professional development and job opportunities may arise for members of the group.
   
   From the hospital's perspective: Take a close look at the working vs. personal relationships in the group and determine how they will best serve the new health system. It may be necessary to reassign the significant other as appropriate, bringing in an interim administrator to transition the role.
   
3. Unexpected delays and surprises
   Always expect some unplanned events after integration. For example, the payer mix may change with the newly acquired patients (e.g., more Medicare and less private-payer coverage than expected). Another surprise may come in the form of red ink if the hospital does the billing and collections for the group(s). 
   
   From the group's perspective: Most hospital administrators don't know how to run a physician practice, so it's up to the group to communicate exactly how any post-integration changes will affect the group's bottom line and why. Stay current on the latest integration- and IDS-specific issues by networking with your MGMA peers as well as taking advantage of MGMA's customized resources for integrated systems.
   
   From the hospital's perspective: Know the current payer mix and, on a monthly basis, run a ZIP code analysis from your practice management system to understand where your patients come from. Tie this information back into patients' insurance plans and monitor monthly. When hospitals take over the billing and collections from a group, decreased collections usually result. (Find out why.) Make sure to take this into consideration before integration and it shouldn't be a major problem.
   
4. Lack of attention to building a new patient base
   One of the main reasons to integrate is to acquire a large network of providers and patients. But don't make the assumption that the patients will come with the providers. Some patients may have negative impressions of one of the organizations in the new system.
   
   From the group's perspective: Clearly communicate your expectations for marketing efforts post-integration. Ensure that you understand what the system expects from your group regarding marketing to your existing patient base. In joining a health system, your group gains some of its marketing services.
   
   From the hospital's perspective: Help the group(s) with their marketing and public relations efforts, and educate the community of patients on the changes in your business. This is a balancing act: Too much promotion of the newly integrated practice can create the perception that your hospital has an unfair competitive advantage and seeks to push other organizations out of business. MGMA consultants have had to mediate issues with physician practices left out of an IDS, particularly in rural areas. Be aware of the marketing issues that arise from lack of involvement, as well as over involvement, in marketing. 

You can learn a lot can about riding a bicycle by reading, but until your foot hits the pedal there is no way to know what will happen. We're interested in your experience with integration issues – before and after. Share them in the comments.