There is a transformation of equity occurring in the health care industry with hospitals and health systems purchasing physician practices. As traditional hospital structures meet the entrepreneurial physician manager in today’s rapidly changing environment, numerous transitional challenges are emerging.
Medical Staff Integration: Transactions and Transformation fills the void that exists between hospital management texts and physician management literature. It examines the cultural and functional issues that must be addressed when hospitals and health systems purchase physician practices.
Written by a leading consultant in the health care industry, the book covers the changes occurring in a nonjudgmental fashion and from a business case perspective. It supplies an understanding of the basics behind the various types of relationships that are forming as well as the nuts and bolts of the transitions that will result.
The book focuses on the challenges readers will most likely face when merging systems, culture, and functions. It explains how to assure that the acquisitions will meet the needs of all parties—emphasizing the income determination structures required for the continued motivation of physicians.
Addressing some of the limitations hospitals face with physician practice integrations, including the traditional medical staff structure, hospital-based physicians, and contracted physicians, the book also discusses the growing role and impact of compliance.
A companion website allows readers to download forms and models which can assist in the practical application of the ideas presented in the book. www.medicalstaffintegration.com
Table of Contents
Conceptualizing New Models of Care Based on Traditional Structures
Physician-Hospital Organization (PHO)
Independent Provider Association (IPA)
Contracting Unit/Messenger Model
Management Services Organization (MSO)
Group Practice without Walls (GPWW)
Captive Physician Group
Other Models and Combinations of Models
Does Anyone Know the Definition of Integration?
How Will We Know If We Are Integrated? Maybe, We Already Are!
Integration Is Not a Place, It Is a Process
Integration and the Challenges of Income Determination
Does What We Have Now Actually Work?
How Did We Get Here? How Do We Get Where We Need to Be?
What Is Different This Time? What Is the Same?
Same Players, Traditional Structures, New Tools
Ignoring Fundamentals Will Produce Unwanted Results
Different Practices, Different Relationships, Different Approaches
Concierge Practices and Aesthetic-Oriented Practices
Hospital-Based and Codependent Practices
Physicians in Different Disciplines Have Differing Needs
Where Are We Headed and What Will Get Us There?
Case Management and Care Management—The New Paradigm
Existing State, Near-Term Future State
Final Note—What Is a Doula?
The Basic PHO (Joint Governance) or IPA (Independence)
The MSO (Services)
The Basic MSO Approach
Goals of the MSO/Vendor Group
Operational Responsibilities of the MSO/Vendor Group
What Does the MSO Not Do?
Co-Management Programs (Partnership)
Getting There Is (More Than) Half the Battle
An Orthopedic Co-Management Model
Contracts and Subcontracts (Managing Relationships)
Example: A Hospital-Based Physician Arrangement (Hospitalists)
Hospitalist Group Contract Points/Coverage Terms
Measurement of Hospitalist Productivity and Quality and Value
Job Description—Hospitalist (Internal Medicine)
Description of Hospitalist/Internal Medicine Service Objectives
Responsibilities of Hospitalist/Internal Medicine Physicians
Example: RFI/RFP Scope of Work for a Hospital-Based Group (ED)
Emergency Department Provider Items/General Services
Emergency Department Provider Items/Recruitment and Orientation
Emergency Department Provider Items/Financial Services
Emergency Department Provider Items/Compliance
Example: Evaluation of a Contracted Group’s Performance
Sponsored Practices and Hired Practitioners (Employment)
Simple, But Many Moving Parts
To Every Project, a Process
Transactions and Transaction Elements
Special Circumstances—Normalizing Practice Numbers
Special Circumstances—Asset vs. Stock Purchase
Special Circumstances—Leasing Practices
Special Circumstances—Fractional Purchase
Special Circumstances—Related Parties
Special Circumstances—Underwater Practice
Align the Correct Solution Supported by Effective Communications
The Team Must Have a Shared Set of Principles and Core Values
Choose a Structure That Fits the Situation
Physicians Involved in the Care Process Must Have a Meaningful Role in Governance
Physicians Must Be Allowed to Pursue Treatment Options in Line with Quality and Service Standards
Recognize the Different Parties to the Transaction
The Result of the Transaction Can Often Mean More Than the Transaction Itself
It Is Important to Understand Differing Perspectives
Are There Any Universal Truths?
Transition Is More Than a Corporate Function—It Is a Cultural Reprogramming
The Future of Independent Hospitals and Private Practice Is Limited
Address Issues of Colleagues, Culture, and Politics
Physicians and Providers in Alternative Organizations—the IPA and PHO Revisited
Medical Staff Issues and Trends—The Structure of the New Medical Staff
What Defines a Good Plan?
Discern between Patient Management and Practice Management
What Is the Commitment Level to a Different Level and Style of Governance?
Operational Management Is Not Governance—Managers Manage and Doctors Govern
Why the Resulting Product Is Often Less Than the Sum of the Parts
Separate the Transactional Issues from the Transitional Process
Practice Transition Does Not Follow a Recipe
It Is Not "Business as Usual"
The Revenue Stream
Establish Fundamental Standards and Link These Standards to Definitive Policies
Was the Practice Well Managed Beforehand?
Quality vs. Quantity and the Bottom Line
Managers Must Have Defined Roles and Responsibilities
Is There a Clear Set of Achievable Metrics for the Practice?
Are the Metrics Aligned with Management and Provider Compensation Models?
Patient Service Process Measures and Patient and Consumer Satisfaction
Metrics Can (Should) Change over Time
What about Financial Measures?
Align the Compensation with the Programming
The Hospital/Health System as Paymaster
Some Basic Regulatory (and Commonsense) Constraints
One Model, Many Factors
Call Compensation and Confusion
Putting It All Together
Developing a Core Set of Strategic Issues
Visions and Hallucinations
Financial Issues, Systems Level
Specific and Special Opportunities
Issues Listing—One Approach
Is There a Clear Value Proposition?
Build an Organization That Can Learn and Transform Itself
To Understand Success, Study Failure
The Group in Crisis
Developing an Emergency Turnaround Strategy
The Group Approaching Crisis
Appendix: Samples and Examples
Mike La Penna has been a consultant to physician groups and hospitals for more than 25 years. He has served in a number of board positions on health care organizations and community service organizations. He has been an executive in both nonprofit and for-profit health care environments.
Mike is a graduate of the University of Chicago’s Graduate School of Business, where he earned an MBA and a certificate in health care administration. He has a BA in economics from Western Michigan University, and he has held faculty positions in both undergraduate and graduate business programs.
Mike’s expertise includes strategic planning, payer negotiation, real estate ventures, product branding, independent provider association (IPA)/physician-hospital organization (PHO) development and management, equity and risk arrangements, technology applications, faculty group practice plans, and merger, acquisition, and divestiture strategies. The La Penna Group, Inc. was founded in 1987 to provide business consulting services to physicians, hospitals, and health care delivery systems. It has also worked with industry and with governmental units to develop solutions for a variety of health care delivery situations. He has been an advisor to numerous national associations and authored numerous articles on health care trends, physician practice management, and network development. He has commented on health care for numerous publications and news outlets, including Crain’s, the Wall Street Journal, the New York Times, and NPR. Mr. La Penna is an advisor to some of the world’s largest health care delivery organizations and to numerous Fortune 100 firms.
Mike LaPenna brings an important perspective to a key shift in the structure of health care. Providers, payers, employers, and patients are greatly impacted by this shift from relative independence to integration, which has critical implications to the cost and quality of health care as we know it today.
—Larry Boress, President and CEO, Midwest Business Group on Health
There is no more complex administrative environment than health care and no time when it has been more confusing and challenging. Mr. La Penna has outlined several of the models and structures that go well beyond the traditional medical staff relationships. His book is recommended reading for the practitioner, the administrator, and board level stakeholders as they contemplate how to work together in the new health care environment.
—Robert Harrison, MHA, PhD, President, Lake Michigan College and Former President of the Michigan Hospital Association
After 25 years of my seeking Michael LaPenna's counsel and direction in half a dozen different medical practice venues and models, I have learned to appreciate his incisiveness, his conciseness, his analytical skills, his wisdom, and his dry humor. A survey of the 21 chapter titles gives a good clue to the superb information in this contemporary and masterful book.
—George O.Waring III MD FACS, FRCOphth, Professor of Ophthalmology, Emeritus, Emory University; Private Clinical Practice, Atlanta, Georgia
Mike LaPenna is the consummate medical staff business consultant. His impressive depth of knowledge coupled with his common sense approach has led to successful resolution of a broad array of issues we have faced in managing the business organization, compensation, and management of our physicians and their practices. His words of wisdom and advice regarding physician integration are welcome in this turbulent time of reform and aggregation of health care entities.
—Susan Mendelowitz, RN FACHE, President and COO, Bergen Regional Medical Center, Paramus, New Jersey
—Paul C. Mendelowitz, MD, MPH, Former Chief Medical Officer, Holy Name Medical Center, Teaneck, New Jersey
No health care environment is tougher than New York. When change occurs, it is rapid and dramatic. We look to experts who have a proven track record of managing change, Mike La Penna assisted us with the development of an IPA that numbered over 5,000 providers and a dozen institutions at a time when managed care first emerged. He fashioned the governance as well as the value proposition for all of the stakeholders. I welcome any book that captures his expertise and experience.
—Dr. Anthony J. Gagliardi, M.D., Vice President & Chief Medical Officer, New York-Presbyterian Lower Manhattan Hospital, and Charter Trustee of SERVITAS IPA of Greater New York
In this time of turmoil and turbulence in relations between hospitals and their medical staff members and with all the different models emerging, it is a help to have a concise review of the options along with practical examples of structure and governance and income distribution. This book is a primer on how hospitals and doctors can find common ground to move from independence to collaboration to some level of true integration.
—Ahmed Abdelsalam, MD, FACS, Managing Partner, Chicagoland Retinal Consultants, LLC
In the process of working in clinical and administrative medical positions for decades, I have had the pleasure of doing a number of joint projects with Mr. La Penna and his team. I am enthused to see that the experience and insight of his years of consulting in the hospital-physician ecosystem have finally made it into print. Anyone who is working with physician transactions will find some solace in knowing that some of us have been there before! This book suggests a number of ways to improve the reader's chances of succeeding in the very complex world of the new medical staff.
—William Cunningham, D.O., M.H.A., Assistant Dean College of Osteopathic Medicine, Michigan State University