Hospital-Owned Medical Practices: Implementing Independent-Practice Principles

This is the final article in a three-part series focusing on strategies enabling independent and hospital-owned medical practices to remove barriers that obstruct performance improvement in ways that lead to organizational success through service and clinical quality, productivity and financial viability.

In the previous article, we discussed a client who requested our help in creating a streamlined and effective implementation management infrastructure that would support their new operational governance model and perhaps even allow for the elimination of some unnecessary director roles. As part of that piece, we reviewed some basic independent-practice principles that provide helpful guidelines for hospital-owned medical practice networks. In this article, we’ll show how we used these principles in our recommendations and implementation.

Our Recommendations

Solving our client’s dilemma involved applying independent-practice principles to their reality, and we incorporated the principles into three specific recommendations:

1. Engage physicians and other providers in a Practice Operations Council (POC);
2. Include an executive partner and develop a site-specific plan for each POC; and
3. Establish a network council and Quarterly Action Plan to address network-wide issues

Let’s examine each of these recommendations further.

Engage physicians and other providers in a POC

We explained to our client that assigning a physician leader or medical director from the hospital side to oversee a practice can often cause the providers at that location to disengage. Practice performance becomes someone else’s problem! With this matter in mind, our first recommendation was to engage the physicians and other providers in a Practice Operations Council. As you may be aware, a Practice Operations Council, or POC, is a site-specific council that includes all the physicians and other providers from that location, in addition to the practice manager and another executive—usually the practice manager’s boss.

Our client found that, under the Practice Operations Council model, each physician and other provider became involved in operational decision-making, taking accountability for his or her individual performance and its impact on practice performance.

Include an executive partner and develop a site-specific plan for each POC

We recommended that the Practice Operations Council in each location also include as a partner the executive to whom the practice manager would report (in this case, a region director). We likewise urged each POC to develop a Site-Specific Action Plan to include initiatives in the areas of clinical quality, service quality, individual provider productivity, and practice financial viability. The region director’s role would be to maintain that action plan and ensure its successful implementation by spending one-half day per week in each of up to eight assigned practices to work with the practice manager and support staff on action plan initiatives.

Establish a network council and Quarterly Action Plan

Our final recommendation for our client was to establish a network council that would address certain network-wide performance improvement initiatives, policies, procedures, and other decisions. This council would include senior hospital leadership and selected employed physician leaders. The network council also needed an implementation function, so we recommended that the senior operations executive report to the Network Operations Council as her operating board.

In addition, we recommended that the senior operations executive maintain a Quarterly Action Plan, which included the network council-approved initiatives, responsible parties, and implementation timing. Since the region directors (one for every eight practice locations) all reported to the senior operations executive, they were also in attendance and accountable to the network council.

The Result

Our recommendations significantly streamlined the management function by removing a layer of bureaucracy, eliminating a number of medical directorships, and clarifying reporting relationships — all while improving the engagement of physicians and other providers.

We have used these same correct principles in many market settings to clarify roles, responsibilities, and accountability for decision-making, performance, and results. Consequently, practice managers get the direction and support they need from their physicians to move the performance dial at the practice level. Region directors, or the equivalent, get the direction and support they need from senior executives and physician leaders to improve performance across the entire group or network of hospital-owned practices.

Recruiting the right executives is critical to successful implementation in every hospital-owned medical practice network. This is a common concern, and many of our clients engage our talented and experienced executives on an interim basis to give them the time necessary to find and recruit the right operations executives. While engaged, our interim executives work with local hospital and physician leadership to develop Quarterly Action Plans and Site-Specific Action Plans that build provider engagement and performance improvement momentum. We then help our clients hire to the action plans in order to maintain the momentum we have helped create while in the market.