Creating the Context for Change for Employed Network Strategy and Execution

Employment continues to be a central provider alignment model for most health systems around the country, with these aggregated networks significantly gaining size and scale over the past 20 years. Many organizations continue to have employed networks that function in silos, largely operating as drivers of volume within the system rather than strategy or value-based performance engines.

Most health system leadership teams recognize the need to change this dynamic and want to effect change, but often lack the context or capability to engage physicians within the group to make this large, disruptive cultural and operational shift — especially when managing the day-to-day network operations is so challenging in this environment. To spur change, they must focus on creating an integrated, multispecialty group adept at delivering the capabilities and patient access the health system needs now and into the future.

Frequently the vision for an employed provider network is tied to the administrative leader of the group or the system CEO, meaning that the vision changes whenever leadership changes, or worse, leadership changes so often that a vision is never established for the group. Successfully executing the day-to-day requirements — and surviving— becomes the vision. While some networks may see day-to-day operational success as laudable, management executives and their teams must evolve beyond solely tackling day-to-day operational decisions and develop a focused, long-term plan for building the capabilities that will generate success into the future. Desirable characteristics of this ideal, “High Performing” network are included in Figure 1.

While most health system leaders and employed providers would agree that pursuing an employed network with these characteristics is desirable, numerous challenges commonly arise on that evolutionary journey:

  • An independent provider culture that hasn’t evolved from a “my practice” or “my service line” mentality since the practices were brought into the network — and which has been reinforced to providers newly recruited into practices with these culturally divisive mindsets.

  • An insufficient investment in management infrastructure, which strains the limited network resources and results in daily firefighting, mounting frustrations and staff turnover that feels insurmountable.

  • Incentive structures that reinforce traditional behaviors (100% individual productivity) instead of its present or future (evolving non-productivity and team-based incentive models).

  • A physician leadership structure that is non-existent, not well-utilized or not broadly understood by the employed network or the health system and results in limited effectiveness, mounting frustrations, and potential apathy that precludes moving the group forward and neuters the aspirations of the physician leadership component.

  • A health system leadership culture that views the employed provider network as a cost center, service line or hospital department as opposed to a peer organization and a strategic driver of short- and long-term value.

  • The context needed to create the imperative to change. What do we/should we change into? With all of the day-to-day challenges —including financial — why invest great effort to shift direction and do something different? Why start today or tomorrow — and how? Context is often a reason that initiatives to optimize operations or financial performance fail. Pursuing employed provider network transformation provides the context for change and can turn that context into meaningful, structural change for the network.

HSG Employed Provider Network Transformation (Figure 2) focuses on creating the impetus and context for change and evolution towards “High Performance” in the trajectory of an employed network’s growth and development

  • Developing a shared vision defines the long-term goals of the organization and an ideal future state that should be the focus of leadership and provider action within the network.

  • Redesigning the leadership and management of an employed network to support the group’s current and future needs provides the infrastructure to create sustainable change.

  • Executing strategies related to the shared vision – the most critical of which are aligning incentives and creating a financially sustainable network – gives the network a focus beyond the day-to-day and creates leadership workflows based upon a continuous plan of improvement.

Network transformation to a higher performing state is possible, but requires the proper context, framework, urgency, diligence, commitment, and perseverance. Creating a vision for the future state, defining the strategies to achieve it, developing the infrastructure to support and sustain it, and instilling the innate desire to continuously improve performance aligned with organizational goals and objectives is a clear but somewhat arduous transformative journey. Although transformation does not happen overnight, organizations must embrace the challenge of walking down this path.  

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