One of the biggest challenges in healthcare in recent years has been consolidation.
“Hospitals are merging, health plans are merging and there has been a huge flux of medical practices merging into hospital systems or being acquired by private equity,” says Will Latham, MBA, president, Latham Consulting Group. “At one point in time, people thought there weren’t going to be any independent practices out there. ... In the 1990s, there was a prediction that there would be five big medical healthcare corporations and they would own all hospitals and employ every physician. Of course, that didn’t happen.”
Latham started working almost exclusively with medical groups in 1988, and his focus today is in aiding groups in developing strategic plans, assisting in merger processes and helping restructure group governance. In doing so, he sees the “chaos” inherent to navigating this wave of consolidation.
“Any medical group manager works with a group of physicians who are supposed to be working together, but each individually has their own ideas about the direction of the practice. If they never come together and reach a unified decision on how they’re going to move forward, it becomes chaos,” Latham says. “The chaos stems from the fact that they have not taken time to sit down together and talk about what they want to accomplish, including key initiatives and plans for the organization.”
Today, Latham sees a turnaround for independent practices, and some private equity acquisitions of groups have not worked out the way those buyers (and their investors) initially thought. To that end, it’s crucial for physician practice leaders to develop a long-term strategy and invest time in building it out.
Retreats to move forward
To break from the day-to-day concerns of practice management, Latham encourages leaders to organize a retreat for group leaders to “spend a day or two talking about the future and discussing key issues.”
Before finding a time and a place for that retreat, Latham says that interviews, surveys or a SWOT analysis can help set an agenda for the retreat and allow group leaders to compile supporting data for decision-making. “The goal is to have everything lined up before the meeting so you don’t use the meeting time to create the agenda,” he says.
Latham has three recommendations for organizing a strategic planning retreat:
- Don’t leave out the naysayers. While you may know there are key leaders in your organization who are wary of change, they should have input on the process. “You want people to come together,” Latham says.
- Keep confidentiality in mind. While all the shareholders in the group should be present, there is a downside to inviting too many people from outside that circle. “Physicians become concerned with confidentiality as more people attend,” Latham notes, and inviting too many people might limit how open they are in discussions.
- Don’t undercut the purpose with too much fun. Some strategic planning retreats incorporate team-building exercises or significant amounts of time for a “social sitdown” to discuss families or personal goals. While these can be effective, Latham cautions against scheduling dedicated time for attendees to spend with their families in the afternoon after a morning of meeting. “This can cause people to hurry through the strategic planning part. … This is counterproductive to the whole process.”
Building in accountability
Following a retreat, Latham recommends that practice leaders produce a report that outlines what decisions were made. In addition to communicating results to those who could not attend, it becomes a tangible part of managing a group’s progress on strategic objectives. “Pull that report back out, perhaps once a quarter, to see how the group is doing versus what they planned,” Latham notes. “There may be good reasons your group isn’t on track, there may be good reasons why you changed something you thought you were going to do. It’s a way to remind yourselves what goals and objectives were set … are you following through on those plans?”
Then there’s what Latham calls the “dirty little secret” about strategic planning: Accountability for physicians after a decision is made and a vote is taken. “In an individual physician’s mind, they think that if they didn’t vote for something or didn’t agree with something, they don’t have to do it,” Latham says. “People leave the room and do whatever they want. Even people who voted for a new initiative leave the room and do exactly the opposite.”
In working with physicians, Latham says that getting people to implement their own decisions is about answering three questions:
- How do you make decisions? “Usually after some discussion, they talk about it and then they vote,” Latham says.
- What’s expected of each physician when a decision has been made? They should adhere to it, support it and shouldn’t sabotage it.
- What are your options if you still don’t like the decision? “Do it anyway, try to get the decision changed in the appropriate forum, or self-select yourself out of the group,” Latham says. “In other words, commit that you won’t stay in the group if you can’t adhere to group agreements.”
Having these discussions at the beginning of the retreat dramatically increases the chances of implementation.
“Realistically, most groups know that somebody might not follow through and do what they committed to, but at least you can challenge those people,” Latham says. “It gives you a tool to confront; it’s not what I think versus what you think — it’s what you agreed to do versus what you’re doing.”
- To hear the full conversation with Will Latham from the MGMA Insider podcast, including a comprehensive Q&A of the podcast episode, visit mgma.com/latham-podcast.