At the Becker's Hospital Review Annual Meeting in Chicago on May 10, two health system CEOs sat on a panel to share their successful strategies in developing an aligned physician base.
The panel, moderated by former Modern Healthcare Publisher Chuck Lauer, included Steven Goldstein, president and CEO of Strong Memorial Hospital in Rochester, N.Y.; Chris Van Gorder, president and CEO of Scripps Health based in San Diego; and Lindsey Dunn, editor in chief of Becker's Hospital Review.
Here is an edited transcript of the panel discussion:
Chuck Lauer: Steven and Chris, give us a synopsis of what your systems are dealing with in regards to your physicians.
Steven Goldstein: In Rochester, we have to figure out how to be responsive to the enormous pressures that are affecting large institutions like ours under healthcare reform. We have 250 private physicians, we subsidize our Medicare and Medicaid through private insurance contracts, and we subsidize education and research for our physicians to the tune of 25 to 30 percent.
Chris Van Gorder: Scripps has five hospitals in the region. Like New York, California has corporate practice of medicine laws, so we use an integrated medical foundation model for our 200,000 independent physicians across many independent practices. Half of our system qualify as disproportionate share hospitals, the rest do fairly well and support the system overall. Our physicians have generally been enthusiastic about population health initiatives, such that management is struggling to keep pace with them.
Chuck Lauer: Lindsey, can you share with us what your publication has been seeing across the industry?
Lindsey Dunn: The key thing we've seen executives doing at this conference that is encouraging to us is they are taking a step back to look at the macro issues to get to a new way of delivering care. Some of that is forced on providers by payors and new reimbursement models, but lately consumers have begun driving that change, too. You can only bring costs down so far before completely re-engineering care. There are a lot of fragmented strategies and initiatives at the moment, so we're in a really muddy place as we navigate forward, but alignment is a key way to get there.
Chuck Lauer: I should probably tell the audience how Chris Van Gorder got into healthcare. He was a state trooper responding to a hit-and-run call when he was hit in a head-on collision himself. He spent one year in the hospital recovering.
Chris Van Gorder: That's right. By the end, the hospital was hiring for an open support program manager position, and I said, "I know you guys probably better than you all know yourselves," and I got the job.
Chuck Lauer: Physician morale was terrible at the time you took over the CEO role from Charlie Edwards, your predecessor at Scripps. At that juncture 14 years ago, you must have seen that and figured out how to get the physicians with you.
Chris Van Gorder: All hell broke loose. The vice president threatened to sue the chiefs of staff, and the next five months grew worse and worse. A strategic plan had been established without much input from the medical staff, and the physician groups felt threatened by the strategy. The board had stood by the CEO before me until the donors started to pull away, and that was the straw that broke the camel's back. We had a very angry staff; turnover was 25 percent; and we had just 55 days cash on hand. This was early on in my career, but I knew there didn't need to be any sort of adversarial gap between management and physicians.
The problem was a gap in information, and we needed to fill that gap with the information we had. If we did that, I knew we'd at least reach similar, but not the same, conclusions on how to move forward. I met with physicians and offered them places on an advisory board under me. They wanted formal power, but I told them the board of directors would never let them override me, and that informal power of my listening ear would be far more valuable to them. Communication has proven to be critically important with our medical staff.
Chuck Lauer: Steve, I believe I know the story of how you got into healthcare. Weren't you a janitor or something?
Steven Goldstein: (Laughs) No, not at all. I was in a PhD program in frog embryology in St. Louis, and when I met my future father-in-law, he made me rethink how I was going to provide for his daughter, who's now my wife.
There has been an enormous shift in healthcare leadership and strategy toward population health, evidenced by the 453 accountable care organizations and counting that are representing about 10 percent of the Medicare population. Hospital administrators don't take care of a population, the clinicians do. But our job is to give them leadership roles and common objectives to thrive in that environment. As Chris described, it can't be done in a confrontational way. We have a very difficult task of converting to value-based purchasing in a relatively short timetable. We're fee-for-service right now, [and] working our way into value contracts. We've always got one foot on the dock and the other on the boat. We have to reshape our academic faculty of 900 from a federalist department group to multispecialty groups.
Chris Van Gorder: It's essential that leadership is on board. We have separate medical staffs, but in our changed management structure, if we didn't have the right culture in place, it would all fail. It took us 14 years to repair the relationships and trust we have with our physicians now, where I can often get nearly automatic approval from them because they know where I'm coming from. We are very transparent, and that was not how things were when I came on. Physicians used to think we were running around with tons of money. We had to open the doors and show them there were no surprises. You lie once to them, and the whole culture goes back 12 years.
Steven Goldstein: In the last year, we've thrown the books open to our physicians as well. The focus now for leadership is on responsibility, patient safety and the viability of our organization. Short of that, everything is transparent and shared. We have $1.2 billion in resources that we're distributing across a broader range of expenses at the same time federal funding for research and education is declining. That's created some very dramatic conversations. When we met with physicians to discuss internal funding for education reimbursement for our physicians and recruits, we had our endocrinology groups saying they wouldn't take part in funding anything outside their specialty. So I asked them if we should just eliminate the pancreas from medical education. Our physicians are now beginning to feel more cohesive across departments, accountable and connected to the whole system.
Chuck Lauer: Lindsey, what do you make of all this?
Lindsey Dunn: It's easy for providers to get bogged down in what structure to use to align physicians, whether its co-management or other governance models, but neither of these two panelists have mentioned a specific model. It comes down to the bigger concepts, which is easier for management to understand. Communication, transparency and governance in some way or another have to take precedence, formally or informally.
Chuck Lauer: And it seems clear that it takes the willingness of the top executive to be successful. Leadership has got to have the right attitude about what needs to be done. It's wonderful they feel the way they do in intellectually opening the books to physicians. That's enlightened leadership.
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The panel, moderated by former Modern Healthcare Publisher Chuck Lauer, included Steven Goldstein, president and CEO of Strong Memorial Hospital in Rochester, N.Y.; Chris Van Gorder, president and CEO of Scripps Health based in San Diego; and Lindsey Dunn, editor in chief of Becker's Hospital Review.
Here is an edited transcript of the panel discussion:
Chuck Lauer: Steven and Chris, give us a synopsis of what your systems are dealing with in regards to your physicians.
Steven Goldstein: In Rochester, we have to figure out how to be responsive to the enormous pressures that are affecting large institutions like ours under healthcare reform. We have 250 private physicians, we subsidize our Medicare and Medicaid through private insurance contracts, and we subsidize education and research for our physicians to the tune of 25 to 30 percent.
Chris Van Gorder: Scripps has five hospitals in the region. Like New York, California has corporate practice of medicine laws, so we use an integrated medical foundation model for our 200,000 independent physicians across many independent practices. Half of our system qualify as disproportionate share hospitals, the rest do fairly well and support the system overall. Our physicians have generally been enthusiastic about population health initiatives, such that management is struggling to keep pace with them.
Chuck Lauer: Lindsey, can you share with us what your publication has been seeing across the industry?
Lindsey Dunn: The key thing we've seen executives doing at this conference that is encouraging to us is they are taking a step back to look at the macro issues to get to a new way of delivering care. Some of that is forced on providers by payors and new reimbursement models, but lately consumers have begun driving that change, too. You can only bring costs down so far before completely re-engineering care. There are a lot of fragmented strategies and initiatives at the moment, so we're in a really muddy place as we navigate forward, but alignment is a key way to get there.
Chuck Lauer: I should probably tell the audience how Chris Van Gorder got into healthcare. He was a state trooper responding to a hit-and-run call when he was hit in a head-on collision himself. He spent one year in the hospital recovering.
Chris Van Gorder: That's right. By the end, the hospital was hiring for an open support program manager position, and I said, "I know you guys probably better than you all know yourselves," and I got the job.
Chuck Lauer: Physician morale was terrible at the time you took over the CEO role from Charlie Edwards, your predecessor at Scripps. At that juncture 14 years ago, you must have seen that and figured out how to get the physicians with you.
Chris Van Gorder: All hell broke loose. The vice president threatened to sue the chiefs of staff, and the next five months grew worse and worse. A strategic plan had been established without much input from the medical staff, and the physician groups felt threatened by the strategy. The board had stood by the CEO before me until the donors started to pull away, and that was the straw that broke the camel's back. We had a very angry staff; turnover was 25 percent; and we had just 55 days cash on hand. This was early on in my career, but I knew there didn't need to be any sort of adversarial gap between management and physicians.
The problem was a gap in information, and we needed to fill that gap with the information we had. If we did that, I knew we'd at least reach similar, but not the same, conclusions on how to move forward. I met with physicians and offered them places on an advisory board under me. They wanted formal power, but I told them the board of directors would never let them override me, and that informal power of my listening ear would be far more valuable to them. Communication has proven to be critically important with our medical staff.
Chuck Lauer: Steve, I believe I know the story of how you got into healthcare. Weren't you a janitor or something?
Steven Goldstein: (Laughs) No, not at all. I was in a PhD program in frog embryology in St. Louis, and when I met my future father-in-law, he made me rethink how I was going to provide for his daughter, who's now my wife.
There has been an enormous shift in healthcare leadership and strategy toward population health, evidenced by the 453 accountable care organizations and counting that are representing about 10 percent of the Medicare population. Hospital administrators don't take care of a population, the clinicians do. But our job is to give them leadership roles and common objectives to thrive in that environment. As Chris described, it can't be done in a confrontational way. We have a very difficult task of converting to value-based purchasing in a relatively short timetable. We're fee-for-service right now, [and] working our way into value contracts. We've always got one foot on the dock and the other on the boat. We have to reshape our academic faculty of 900 from a federalist department group to multispecialty groups.
Chris Van Gorder: It's essential that leadership is on board. We have separate medical staffs, but in our changed management structure, if we didn't have the right culture in place, it would all fail. It took us 14 years to repair the relationships and trust we have with our physicians now, where I can often get nearly automatic approval from them because they know where I'm coming from. We are very transparent, and that was not how things were when I came on. Physicians used to think we were running around with tons of money. We had to open the doors and show them there were no surprises. You lie once to them, and the whole culture goes back 12 years.
Steven Goldstein: In the last year, we've thrown the books open to our physicians as well. The focus now for leadership is on responsibility, patient safety and the viability of our organization. Short of that, everything is transparent and shared. We have $1.2 billion in resources that we're distributing across a broader range of expenses at the same time federal funding for research and education is declining. That's created some very dramatic conversations. When we met with physicians to discuss internal funding for education reimbursement for our physicians and recruits, we had our endocrinology groups saying they wouldn't take part in funding anything outside their specialty. So I asked them if we should just eliminate the pancreas from medical education. Our physicians are now beginning to feel more cohesive across departments, accountable and connected to the whole system.
Chuck Lauer: Lindsey, what do you make of all this?
Lindsey Dunn: It's easy for providers to get bogged down in what structure to use to align physicians, whether its co-management or other governance models, but neither of these two panelists have mentioned a specific model. It comes down to the bigger concepts, which is easier for management to understand. Communication, transparency and governance in some way or another have to take precedence, formally or informally.
Chuck Lauer: And it seems clear that it takes the willingness of the top executive to be successful. Leadership has got to have the right attitude about what needs to be done. It's wonderful they feel the way they do in intellectually opening the books to physicians. That's enlightened leadership.
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