From Aggregation to Assimilation: How to Improve Employed Physician Group Performance

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TeamAt the Becker's Hospital Review Annual Meeting in Chicago on May 10, 2013, CEO of Centura Health Physician Group Allen D. Kemp, MD, and Principal of Health System Advisors Luke Peterson gave a presentation titled "Employed Physician Group Performance: Moving From Aggregation to Assimilation of Practices Inside Large, Hospital Employed Physician Groups."

"Over the past few years health systems have dramatically grown their employed physician base," said Mr. Peterson. "A new generation of physicians are looking for employment as their vehicle of how they are going to practice quality care. However, for some hospitals the result of this employment has been big operational losses. We need to figure out how to create more stability and capture more of the population if we are going to go about this common standard."

Many hospitals and health systems have taken the aggregation approach to physician employment; they purchase their practices or bring them on to the employed physician group, but don't make any operational or cultural changes to the physician's practice. This strategy may not be successful in the future.

"As we look at these markets that are recruiting and acquiring physicians, there must be a commitment to move and make changes to the practices," said Mr. Peterson. "Likely this means trimming down or completely reorganizing their practice structure. That is difficult to do when we have 200 physicians, and 30 to 40 may not make this journey with us. It's the commitment that we have to move forward with."

Dr. Kemp shared his strategy for aligning physicians, based on his background as an anesthesiologist in a large group and then as CEO of Centura Health Physician Group:

1. Grow and balance the provider mix
2. Create effective operations and consistency
3. Invest in the infrastructure and management resources
4. Develop the multispecialty culture

"The challenge is to get the hospital leadership to understand you need to make an investment in infrastructure with knowledge and resources that are experienced with managing physician groups," said Dr. Kemp. "You must be systematic and willing to figure out how you will move through the phases of really developing a culture of collaboration."

After becoming CEO of Centura Health Physician Group, Dr. Kemp made sure the leadership was experienced with physician groups, but he also revised management positions with the practice to eliminate some positions and make sure they were filled by qualified personnel. Around 90 percent of the team was terminated and replaced with more qualified managers. He also extended practice hours and developed a consistent operating model.

"Restructuring management wasn't easy, and there were a lot of people upset," said Dr. Kemp. "We upset a lot of the physicians they were extremely dependent on. However, if you are going to go through this change, you can't have a lot of interference. Don't let anyone throw you off the tracks."

More Articles on Hospital Leadership and Strategy:

4 Perspectives on Physician Alignment
5 Best Principles for Physician Engagement at Hospitals
To Go it Alone: Should Hospitals Strive to Remain Independent?

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