Insider: Will Latham on developing a strategic plan in a medical practice

MGMA senior editor Daniel Williams, MBA, MSEM, sat down with Will Latham, MBA, president, Latham Consulting Group, to discuss how to implement effective medical group governance, identifying challenges and solutions for the organization, and the “dirty little secret” behind physician conflict management.

In 1988, Latham started working full time almost exclusively with medical groups. Most of his focus today is helping groups in developing strategic plans, assisting with merger processes and helping groups restructure their governance.

Q. In past presentations for MGMA, you have used the term “chaos.” Could you explain what you mean by that?

A. Any medical group manager works with a group of physicians who are supposed to be working together, but each one of them 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. No one knows what should be done; people don’t know how to focus resources on different types of projects. In many cases, the manager of the group doesn’t know what to implement, so there’s standstill. If they implement something that isn’t in line with the doctor’s mind, that can be a career-limiting move. 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.

Q. There is so much change happening within healthcare, whether it’s regulatory or other issues. What is your opinion about the present state of independent practices?

A. One of the biggest areas of change over the last few years involves the consolidation of all of healthcare. 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. At one point in time, people thought there weren’t going to be any independent practices out there; —they would all be owned. 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.

Now we’re seeing a turnaround in terms of more independent practices. There have been changes in reimbursement that make it economically disadvantageous for hospitals to own physician practices. Some of the private equity acquisition of groups hasn’t worked out the way that those acquired (or their investors) thought it would.

Q. There is so much focus on daily productivity at a medical practice, how do you change that mindset so that people can develop a long-range strategic plan and make that work for them?

A. Set aside time to sit down and discuss longer-range thoughts. There are so many day-to-day issues to focus on, so there’s just not time to spend focusing on what might happen next month, next year, five years from now. Unfortunately, the result of that is groups can’t put today’s problems into context because they don’t have any long-range plans. They are making decisions haphazardly … Carve out time and come together with a specific focus, which many groups do through a [company] retreat.

When I’m discussing long-range planning, I’m not talking about a 10-year plan or a 20-year plan. … In today’s healthcare environment, that’s not realistic. ... I try to have groups focus on what they want to accomplish over the next one to five years, recognizing that the further you go out, the more the environment might change, and you’ll have to adapt and adjust your plan. … Plans are not etched in stone. [Groups] do have to get back together at periodic points and revisit the plan to ensure they’re on track but if they don’t have a plan in place, I find many groups to be paralyzed and they don’t do anything. Often, you just have to make the plan, make the future come true and don’t wait for the future to tell you what you should be.

Q. What are the steps you would suggest a practice take to apply this and put it to work for them?

A. It’s bringing together the physicians in the practice, who are either shareholders or the decision-makers; in some groups, that’s everybody. This typically revolves around a retreat where group leaders or all the members of a practice spend a day or two talking about the future and discussing key issues. They might establish a mission statement and/or vision statement for the group. They might discuss how they plan to grow, geographic coverage, technology and development, recruitment plans or how to deal with retirements.

To make best use of this time, most groups gather information upfront, either through interviews or surveys to determine what the group thinks is important and what needs to be discussed. … We ask, “What are your main strengths, weaknesses, opportunities and threats?” Most have probably heard of a SWOT analysis and the reason we ask those questions is to fix weaknesses, determine what opportunities to pursue and how to avoid the identified threats, and how to use your strengths to be able to do those things. Then we ask physicians what they feel are the important issues to discuss at the retreat. From there, we build an agenda and gather whatever supporting data is necessary to the discussion. For example, if you’re looking at a new ancillary service, you might want to perform a cost-benefit analysis to present at the meeting or if you’re thinking about adding new staffing, do research on salary, cost and the potential benefits. The goal is to have everything lined up before the meeting so you don’t use the meeting time to create the agenda.

Subsequent to the retreat, we always suggest a report is developed that outlines what decisions were made. Sometimes, everybody can’t attend the meeting; this is a way to communicate to them. It also makes sense from our perspective to pull that report back out, perhaps once a quarter, to see how the group is doing versus what they planned. 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?

Q. Who are the stakeholders in these retreats?

A. Typically, it’s the shareholders in the group — the administrator or the CEO — all need to be there. I suggest limiting the attendees, unless there’s a topic that needs to be discussed that involves [a third party], because you want people to be as open as they can be. Physicians become concerned with confidentiality as more people attend or they begin to do things in response to the people that are there. Keep it down to as few people as possible.

Some people tend to be a little disruptive in meetings — the naysayers or the loyal opposition. There is a tendency to plan meetings when they are on vacation or out of town. I don’t think that should be done because you want people to come together and have input in the process. Even if it doesn’t go exactly the way they want it, they have a chance to make their points, listen to others and be more supportive of the decisions being made. Hopefully the group votes on which initiatives they want to move forward with and which ones they don’t.

Q. What is the overall flow like? Is it all business or is there fun and entertainment mixed in?

A. Some groups plan a weekend retreat and include social time with each other. Other groups don’t want to be away from their families. They give up enough time on weekends or on-call and they want to keep it in town and focus fully on business efforts.

Other groups use it to do more team building.  ... The groups that do social activities will often stay over the weekend, have dinner together, golf together or do other types of activities … to spend time talking with each other about issues that aren’t as ripe with conflict as issues discussed in planning meetings. When you have a social sit-down, you’re really talking about families and personal goals and in many cases, that can be very effective. One thing I would suggest being careful about, however, are turning retreats into a family event where you meet in the morning and get together with family in the afternoon. This can cause people to hurry through the strategic planning part of the process. … This is counterproductive to the whole process.

Another way that groups think about strategic planning is by devoting a weekend day or a couple of hours every evening over several weeks to develop a plan. If that’s the only thing you can do, it’s better than nothing. That can be problematic, though. Different people may attend different meetings which means a plan can shift depending on who can actually attend and by spending so much time starting each meeting with a recap of the last, you lose continuity. In my experience, it’s better to dedicate a full day, or a full period of time to the planning process.

Q. Whether you have a successful retreat or successful strategic meetings in the office, what are the main obstacles in applying changes and getting them to stick?

A. Many medical groups suffer from what I call, “the dirty little secret.” 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. What happens as a result is that you never know whether it’s really going to happen when you made a decision. 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.

At almost every retreat that I work with, I tell physicians, “I’m facilitating this to get to the point where you’ve made a decision, so I need to know when you’ve really made a decision.” Getting people to implement their decisions is having three questions answered. How do you make decisions? Usually after some discussion, they talk about it and then they vote. What’s expected of each physician when a decision has been made? They should adhere to it, support it and shouldn’t sabotage it. Finally, what are your options if you still don’t like the decision? Really, there are only three. Do it anyway, try to get the decision changed in the appropriate forum, or self-select yourself out of the group; 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 very 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. 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.

— Edited by Kelsey Brading, MGMA content production coordinator