7 essential components of a high-performing physician enterprise

The need for more value in healthcare has never been greater. As the key drivers of health system resource utilization and the focal point for patient engagement, the physician enterprise must serve as the primary path to greater value. Unfortunately, most health systems are focused on the financial stability of their physician enterprise — especially with the ongoing reduction in professional fee reimbursements — rather than pursuing the benefits of better alignment.

Hospitals and physicians face the challenge of quickly transforming their physician enterprise into efficient, high-performing systems to focus their efforts on making advances in value-based care. The following seven components can help support this transformation.

1. Operational excellence

Operational excellence serves as the foundation for financial and strategic success. The effectiveness and efficiency gained through flawless operations optimizes revenues and eliminates waste, leading to a much stronger bottom line. The strength and reliability achieved through operational excellence enables growth opportunities through strategic alliances and increased market appeal.

• Step 1. Work with department leaders to gain a deep understanding of their operations and the levers that drive performance. Training on Lean process mapping and activity-based management tools are essential for managers to acquire this deep operational understanding. These tools also form the foundation of ongoing process improvement and system standardization.
• Step 2. Weekly clinic planning. This involves forecasting workloads and planning resource requirements across the physician enterprise to meet service standards while minimizing waste from excess capacity.
• Step 3. An incident management system based on the Toyota principle of stopping to fix the problem. This system addresses both patient and administrative incidents. The initial step is to address the immediate symptoms created by the incident, such as completing a service recovery for the patient. The second step is to identify the root cause of the incident and implement corrective actions to prevent a recurrence. Once department leaders are moving toward operational excellence, additional tools — such as swim lane modeling and process flow diagramming — are deployed to support line balancing and operational efficiency.

2. Data-driven accountability system

The development of a data-driven accountability system is grounded in a deep operational understanding, using actionable performance metrics as tools to relentlessly drive continuous improvement. To be actionable, these metrics must be established at the department level, starting with the front-line mission-servicing departments. Next, metrics are established for staff departments by linking their performance to their support of the line departments.

• Step 1. Clinic key performance indicator (KPI) dashboard employing the Quint Studer five pillars of excellence model, setting performance expectations for service, quality, people, growth and finance functions. The monthly results captured in these dashboards serve as the input to continuous learning and improvement. This system is an agile improvement planning tool driven by a combination of recurring mentoring, problem solving and accountability. The individual department dashboard results are also accumulated to establish an organizational scorecard which serves as an executive-level performance report.
• Step 2. Department-level daily performance checks. These checks consist of results and events that require immediate attention. Department leaders are expected to evaluate and address variations from standards to prevent negative trends on these critical performance factors.
• Step 3. Monthly accountability report. This report focuses on compliance with established policies and aims to drive organizational reliability. The monthly compliance rate serves as each manager’s reliability score, which becomes a part of the performance evaluation system.
• Step 4. Measure results at the individual provider level as a performance improvement tool. One such report contains provider-level revenue cycle management performance. Here, provider-specific data on lag days, aging, denials and collection rates are captured. Next, variation among providers is assessed by focusing management support on those performing more than one standard deviation from the group’s mean. This “outlier management system” provides a method to prioritize improvement actions.

Regularly using this method results in a reduction in performance variation as well as improvement in overall performance. The outlier management approach is also used on provider contribution reports, which considers other factors such as patient satisfaction, MIPS performance and production levels.

3. Organizational alignment

A required characteristic of high-performing organizations is the seamless delivery of services across the episode of care. Achieving this requires alignment across clinical and business functions to align goals and eliminate gaps in the care process.

First, patient-focused goals consistent with the organization’s mission are established. Next, lean tools like process mapping and SIPOC are used to clarify the service expectations needed to optimize the care process. The application of these tools leads to the identification of each care process participant’s roles and responsibilities required to achieve the seamless delivery of services. These roles and responsibilities are then documented in service level agreements where each participant commits to consistently play their part in achieving delivery system success.

At this stage actionable metrics reflecting service delivery performance are developed to support a recurring evaluation and improvement system. This improvement system involves monthly meetings to evaluate performance, identify opportunities for improvement and obtain commitments from each participant for their part in achieving the improvement.

4. Financial optimization

High-performing organizations must generate a sufficient bottom line to achieve long-term sustainability. The financial optimization component of a high-performing infrastructure involves a comprehensive assessment of the factors driving financial performance. The assessment covers the following revenue and expense improvement opportunities:

Revenue

• Payer contracts
• Insurance collections
• Personal pay collections
• wRVU per encounter
• Productivity
• Value-based care

Expenses

• Lean staffing
• Staff compensation
• Provider compensation             
• Service expense management
• Supply costs management
• Overhead costs management

The complete assessment of these 12 factors provides the total value of the financial opportunity and serves as the basis for a financial improvement plan. Next, a root cause analysis for each area with a shortfall is conducted to establish effective corrective actions. Successful implementation of improvements will be achieved by folding these measures into the agile continuous learning and improvement system discussed earlier.

This system requires a monthly comparison of actual performance to the established standards. If performance falls below the standard, a tangible corrective action is expected to be taken in the next 30 days.

5. An engaged workforce

Employee engagement is achieved by combining the three key drivers for employee engagement — purpose, empowerment, and effective recognition — with a data-driven framework and operational understanding. Given their healing mission, physician enterprises should find it easy to gain employee buy-in to the organization’ s purpose or mission. However, engagement must be elevated by establishing direct connections between each employee’s role and the organization’s mission. This is achieved by developing individual performance factors (IPFs) for each position that are linked to the KPIs established for each department.

• Employee empowerment. Organizations thrive when the employees are trusted to make decisions related to the performance of their duties. Employee alignment, competence and accountability are the three pillars of trust. Alignment is accomplished by ensuring each employee has adopted the organization’s behavioral expectations. This objective is achieved by instituting key operating principles across the organization that all employees are expected to apply to their daily work decisions. Next, activity-based job descriptions serve as a guide for establishing the training and tools to build employee competence. The data-driven accountability system serves as the mechanism to consistently monitor performance and ensure negative variations from expected results are addressed without delay.
• Effective recognition. The previously discussed accountability system provides the foundation for a results-based recognition system. More specifically, the KPI and IPF tools provide the means to quantify department and individual performance. High performers should be recognized in manager, town hall and other leadership meetings as well as in individual performance assessment and mentoring sessions. These tools also provide a framework to enhance alignment through a performance-based employee bonus system.

6. Physician governance and leadership

Effective physician governance and leadership must be established to accelerate sustainable performance improvement in the physician enterprise. Governance success is achieved by selecting seven to 10 high-performing providers with peer credibility to serve on a Clinical Operations Leadership Committee (COLC). This committee, equipped with a charter detailing their purpose and roles within the organization, works with health system leadership to establish and endorse a vision for the physician enterprise. Each member on the committee is asked to accept fiduciary responsibility for the success of the enterprise as well as COLC behavioral expectations.

This committee becomes the primary force in establishing a high-performance culture, setting policy, driving performance improvement and addressing behavioral issues. Key policies addressed by this committee include:

• Provider productivity and compensation
• Staff compensation
• Position management
• Incident management
• The five-pillar performance improvement system.

Building physician leadership throughout the organization is also required to achieve sustainable success. High-performing physicians with peer credibility in each specialty are selected as medical directors. At a leadership level, these physicians serve as the link between the clinic providers and the organization’s leadership. Accordingly, the medical director is tasked with being the voice for the providers as well as for the organization. At a management level, the medical director is asked to guide the clinic manager, support performance improvement efforts and represent the clinic to the COLC.

7. High-performance culture

Characteristics of a high-performance culture include reliability, professional behavior and ensuring that continuous learning and improvement are an integral part of operations. Each of the prior six components support and are supported by this culture. A vision for the physician enterprise provides the organization with purpose and direction. Reliably effective decision-making requires a deep understanding of operations with a clear knowledge of the levers that drive performance.

Next, each employee’s adoption of the key operating principles leads to professional behavior and decision making based on shared values which raises trust and reliability throughout the organization. Key principles expecting workplace consideration and downstream service support are also critical features driving collaboration and organizational alignment.

The data-driven accountability system provides employees with strategic and tactical direction on how to achieve the vision. In addition, this system’s focus on recurring performance assessments and a relentless pursuit of excellence integrates continuous learning and improvement into the organization’s culture. The institution of this culture requires vigilance. Key operating principles, behavioral expectations and performance standards must be presented in new member orientations and townhall meetings. Professional behaviors and high performance must be recognized and rewarded. Meanwhile, non-compliance and poor performance must be formally addressed.

Finally, it is essential that all leaders in the organization take special care to ensure these values and principles are embraced and enacted in their daily roles.

Conclusion

The high-performance infrastructure is composed of seven interdependent components focused on connecting culture, people, operations and financial factors within a data-driven environment. Instituting a high-performance infrastructure is not an instant fix. The strong interdependence of these components requires effective implementation of each one to achieve lasting excellence. However, investing in this infrastructure allows these interdependent components to build on one another, multiplying returns and driving sustainable high performance across the organization.