|THIS WEEK AT GIST—ON THE ROAD
What we learned this week from our work in the real world.
Is there an “order of operations” for building physician governance?
We were recently asked by the chief physician of a large health system to assist with what seemed like a simple request: “We’re looking to reorganize and grow our medical group. Could you help us figure out how to do that?”Our first visit with physician leaders revealed that this seemingly straightforward question had many layers of complexity. In addition to their own employed medical group, the health system has three vehicles to employ physicians within the region, with no method to coordinate decisions across them. This has led to internal competition in physician recruitment, with two of the system’s employed medical groups vying for the same surgeon, essentially engaging in an internal bidding war. Employed physicians comprise only a small portion of the system’s aligned medical staff, with hospital leaders relying on key independent groups for talent, and worried that growing the employed group will cause friction. To top it off, the health system has a large residency program, and any plans to grow the employed medical group, where many faculty members reside, will have to take into account training and research, and the needs (and egos) of department chairs.
After interviewing physician stakeholders and system leaders, we concluded that the greater challenge for this system was the lack of a coherent physician alignment strategy for the larger market, and a way to make decisions about network growth and investment that were in the best interest of the system’s larger goals. We determined that before any plans could be made to grow the employed medical group (or any other part of the physician enterprise), the system needed to create a forum to align decision-making for physicians across the market. The system agreed to launch a physician leadership council, led by the chief clinical officer and bringing together senior leaders from the employed groups, academic enterprise, and key independent and hospital stakeholders. This group will set market-level physician strategy and work to resolve any conflicts between groups in the system.
The leadership council will also lead the development of a new system-wide physician governance structure. We recommended a service-line structure, given the number of stakeholders and the demands of academic medicine. Critical to the success of this effort will be the ability of the system to align both clinical decision-making and business strategy within those service lines. It’s a tall effort to be sure—one well beyond the initial question of the medical group leader who made the call to us. But it’s necessary to be able to address the challenges faced by the employed medical group, and foundational for the system as they look to create an aligned network that delivers consistent, coordinated care and experience to customers across the market.
Being explicit about decision-making
Recently we facilitated a day-long meeting for one of our clients who is looking to build a new governance model for their regional clinical enterprise. It’s a complex undertaking, requiring them to bring together a broad spectrum of stakeholders—their own employed medical group, a handful of independent groups with whom they’ve built partnerships over the years, a joint venture partner, the leaders of the system’s hospitals, and their academic affiliate. All of these relationships—each with its own decision-making structure and incentive model—have accreted over time but have not operated as a cohesive whole. Now, faced with an increasingly competitive marketplace, the system wants to build an overarching structure to coordinate the activities of the disparate constituents, and to allow them to go to market with a unified platform capable of delivering better value to consumers and purchasers.
In preparing for the meeting, we quickly realized that the crux of the problem is decision rights. Every initiative or major decision that the system wants to make is getting bogged down in an endless process of discussion, second-guessing, and turf battles between the constituent groups. In our session with the group, we shared our perspective that the most important part of designing any organizational structure is being very explicit about how decisions are going to get made. To that end, we provided with them a decision-making framework that we’ve seen implemented in other organizations, a variation on the RACI responsibility assignment matrix that’s been a mainstay in organizational science for decades.
At its heart, it’s a role-based decision process, in which different stakeholders are assigned discrete parts to play in coming to a decision. RACI is an acronym for four of the pivotal roles: Responsible, Accountable, Consulted, and Informed. There’s no magic to the specific framework—indeed, there’s a multitude of different flavors of RACI. (We like the Bain & Company notion of asking “Who has the ‘D’”, or—to paraphrase George W. Bush—who’s the Decider?) Across the day, we introduced the framework, role-played making a specific decision using it, and then began to evaluate a strawman model for the unified clinical enterprise using the framework. We’ll keep you posted as the model moves from evaluation to implementation, but we were struck by the power of having an explicit, concrete discussion around decision rights. Given the complexity and organizational inertia that characterize many healthcare organizations, taking the time to clarify who gets to make which decisions, and how, seems like a worthwhile endeavor.