Regions Hospital Board and Medical Staff Leadership Enhancement

1
The Expanding Role of Physician Leaders
James A. Rice, Ph.D., FACHE Vice Chairman The
Governance Institute 612.337.1307 jrice_at_governance
institute.com
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The Expanding Role of Physician Leaders

• How are leading hospital and health systems
  generating value from their growing number of
  physician leaders?
• This session explores recent trends in the
  compensation, performance appraisal, and support
  of physician leaders who have been invited into a
  series of important leadership positions as
  medical directors of service lines and medical
  staff functions

3
Value Smarter recruitment, development, support,
incentive pay, recognition
Programs of Promise
Effective physician leadership programs need
structured assessment, clear strategy, and
substantial development investments.
4
Physician Leadership Development Process
Future Operating Environment
Threats, Challenges Opportunities
Methods to Select, Support Develop Physician
Leaders
Attributes of Physician Leaders
Number Types of Physician Leaders

• Pay-for-Performance
• sophisticate patients
• chronic care
• calls for quality safety
• competition for patients
• competition for physicians employees
• public results reporting

• Arenas of threat or opportunity include
• continuity of care
• quality outcomes
• patient satisfaction
• physician morale for process improvement
• employee pride for sustained system enhancements
• demands for cost effectiveness
• need for market respect

Selection by Election
Selection by Appointment
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Building Blocks for Physician Leadership
Strategic Imperatives

• Quality Patient Safety
• Pay for Performance
• Integrated Care Systems
• Cost Effectiveness
• Attract Retain Excellent Clinicians and Staff

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Contents

• Charge to Work Group
• Members of Work Group
• Importance of Physician Leaders to Local
  Competitive Performance
• Complexity of Current Model
• Proposed Selection Method for Physician Leaders
• Building Blocks for Physician Leadership
  Development
• Resource Requirements for Implementation
• Implementation Plan

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Charge to Work Group on Physician Leadership

• Study best practices in physician leadership
  systems for hospitals that are an integral part
  of an integrated care system like Health, and
  then recommend a structure, system and philosophy
  of Physician Leadership that
• Supports a blend of the best of Best Care Best
  Experience from the Local Hospital, and the
  principles of Group Compacts
• Maximizes meaningful physician input, engagement
  and empowerment in our integrated care system
• Assures and facilitates physician leaders
  managers partnering to make decisions and to be
  accountable for their actions and behaviors
• Supports an organization and leadership structure
  that is clear, streamlined, and aligned with the
  strategic plans of Local Hospital, Group and the
  Health System

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Members of Work Group

• (Local Medical Executive Committee Members with
  member of the board and senior management)

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The Local Board Management Cares about
Physician Leaders because they are essential to
the broader ends of our mission/vision of being a
respected, market leading, integrated care system
Purpose of physician leaders at Local Hospital

• Physician leaders assist the board and management
  of the hospital to accomplish a shared mission of
  delivering high quality patient care that meets
  at least these attributes of Best Care Best
  Experience
• patient centered
• high clinical quality and safety
• restores health to optimal level as fast and
  safely as possible
• convenient, comfortable, cost-effective
• Enhances the hospitals opportunities for long
  term economic vitality
• While also facilitating the hospitals commitment
  to medical education and research

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Physician leaders focus on helping meet the needs
of patients, physicians and the hospital

• Patients want 5 key things from their hospital
  experience
• do me no harm
• restore my health and functionality to highest
  optimal level ASAP with as much compassion,
  comfort, and dignity as possible at a fair and
  reasonable cost
• provide a good experience for my significant
  others
• strengthen and enhance the relations I have with
  my primary care provider/coordinator and
• minimize the disruption of relations with my
  payer
• Physician colleagues also want 5 main things from
  their hospital experience
• my patients experiences are ideal (see above)
• I am treated and supported as a respected
  colleague by hospital staff, especially nurses
• My time is efficiently and effectively used with
  minimal bureaucracy, zero tolerance for
  disasters, disease, distractions, delays or
  distemper
• Tools, data, technologies, a healing environment,
  and experts needed for my role in diagnosis,
  treatment and rehabilitation of my patients are
  readily, enthusiastically, and accurately
  available for me to enhance the art and science
  of my practice and career and
• It is evident from the board and management that
  my role and contributions to the hospital are
  known, valued and appreciated.

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We need more formality for physician leadership
roles and responsibilities at the organizational
and individual leader levels

• The principles of physician leadership
  enhancements and expectations should be captured
  in an updated Affiliation Agreement between
  Local Hospital and the Health Medical Group
  (Group), and also within any agreements with
  contracted physicians or medical groups
• Individual physician leadership roles,
  responsibilities and performance expectations can
  be addressed in their Annual Performance
  Agreement

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Physician Leadership Principles

• Local Hospital needs excellent physician leaders
  to help ensure its capabilities to thrive in a
  challenging market
• In keeping with our philosophy of commitment to
  a fully integrated care system that supports
  patients to receive excellent quality, safe, and
  cost-effective care in a seamless system of
  ambulatory and inpatient care, our physician
  leaders need to be recruited and supported to
  excel in their embrace of our integrated care
  model
• Physician leaders must meet rigorous standards of
  clinical expertise and a willingness capability
  to lead their physician colleagues and Local
  Hospital staff in medical care that is
  characterized by continuous quality and safety
  improvement, as well as meeting our need for
  cost-effective and efficient care.
• To ensure our compliance with modern
  accreditation guidelines from JCAHO and NCQA, we
  intend to enhance our traditional Medical Staff
  Model to reflect our need for a more closely
  integrated design
• We choose to define our approach to a
  self-governing Medical Staff to be The Chief of
  Staff Elect and Chief of Staff would continue to
  be elected by members of the active medical staff
  of Local Hospital Active members of the medical
  staff and their Division will elect an at large
  member for their Division to serve on the MEC.
  The Chief of Staff (COS) recommends Medical
  Staff Committee Chairs, who are ratified by the
  MEC. Section Heads and Division Heads are
  appointed in partnership by the VPMA, Hospital
  CEO and Group. One MEC leader position is to be
  filled by a non-Group physician.
• The roles and responsibilities of our Section
  Heads, Division Heads, and other Medical
  Directors will be carefully defined and
  integrated to assure streamlined roles and
  accountabilities
• We intend to invest in systems and staff to
  support the continuous enhancement of our
  physician leaders effectiveness and development

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Complexity of current model breeds lack of
transparency accountability
HP Board
Local Board
BOD Appoints Medical Staff
BOD Structures Divisions
Local CEO
Past COS
VPMA
Medical Executive Committee
Med Education Programs
56 Medical Directors
Group Compacts
Fam Pract
Emergency
CVT
Allergy
Burn
Psych
Emergency
By-Laws
Gen Med
Radiology
Gen Surg
Cardiology
Family Med
Cancer
Peds
Pathology
Plastic
Derm
Occupational Med
Credentials
Ob Gyn
Anes.
ENT
Endo
Podiatry
HCMC
Infections
Neuro Surg
G.I.
Psych
University
Int Med
Inter-disc Practices
Ortho
HemOnc
Ob Gyn
Med Records
Ophthal
Neuro
Gen Surgery
O.R.
Dent Oral
Nephro
Neuro
Patient Care
DDS MD
Inf Disease
Ophthal
Rx Therapeutics
Podiatry
Occ Med
PM R
EMT
Quality Peer
Urology
PM R
Radiology
Rad Safety
Pulmo
34 Sections in 5 Divisions
Plastics
Trauma
Rheum
Ortho
Rad Therapy
Anesthesia
Active Medical Staff
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Why seek clearer and leaner physician leadership
structure?

• To increase the effective empowerment of
  physician leaders to be more fully engaged in the
  processes of developing the clinical care and
  economic vitality polices and procedures
• To increase the likelihood that the physician
  leadership will be more transparent and
  understandable to physicians and hospital staff
• It will be easier to attract and retain the best
  and brightest physicians into leadership roles
• The physician leaders will more likely be
  successful and find satisfaction in their
  leadership roles and
• The physician leaders will be more effective and
  accountable to the mission and strategic plans of
  the hospital

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If we select the right physician leaders into
the right leadership structure, what should we
gain?

• Physicians on medical staff more likely to know
  who to ask for help to enhance
• care for their patients
• support for their professional growth
• support for their practice vitality
• Physicians more likely to get faster and smarter
  responses to their questions about the quality
  of
• their patients care
• their professional growth
• their practice effectiveness and vitality
• Patients more likely to receive care that is of
  higher quality, safer and cost-effective
• Hospital is more likely to gain enhanced long
  term vitality by earning value from physician
  collaboration that yields
• better physician engagement in planning and
  performance of care systems
• care systems more closely integrated and seamless
  for patients payers
• higher physician morale
• fewer costly re-works from medical or pharma
  errors
• higher employee morale with less cost for re-work
  and errors
• more cost effective care from enhanced care
  process improvements
• greater market share growth from earned value
  from patients and payers
• better terms from payers for speed and level of
  payments

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Key Expectations from Effective Physician
Leaders

• Champion for excellent and improving systems for
  hospital care quality safety
• Champion needs of patients for Best Care Best
  Experience work and goals.
• Champion professional practice needs of
  specialty physician colleagues
• Champion needs of the organized medical staff
  functions
• Champions needs of Local/Group within the HP
  system
• Champion for rigorous physician
  credentialing/privileging
• Champion the development and use of high quality
  clinical care protocols
• Champion for hospital economic vitality
• Champion systems, staff, and infrastructure for
  continuous improvement of physician leadership
  effectiveness.

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Attributes of a great physician leader What
knowledge, skills and attitudes judged likely to
accomplish the ten key champion roles?

• Knowledge
• above average understanding of excellent medical
  care
• sincere understanding of need for and nature of
  advocacy role for patients
• art science of continuous quality improvement
• hospitals economic success drivers
• the vision plans of HP, Group and Local
  Hospital
• Understand and use patient satisfaction data
• Skills
• engaging physicians in creating improvement
• strategic financial planning
• forming and managing teams
• effective running of meetings and group process
• verbal written communications
• effectively managing performance
• Attitudes
• patient centered excellence is key to our shared
  success
• trust building is valued by physicians and
  hospital leaders
• collaboration matters
• health is more than the absence of disease

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Physician leader position accountabilities

• Physician leaders should align their expectations
  with other leaders within Local Hospital Group,
  and the enterprise.
• Each physician leader will have a generic
  position description that describes how the
  previously cited champion responsibilities are to
  be carried out in their specific role as a Chief
  of Staff, Division Head, Section Head, Committee
  Chairperson within Medical Staff or a Medical
  Director in a clinical service line
• Each position description will also have
  performance metrics for that unique position for
  the coming year. Process will include 360
  performance review from staff physicians and
  hospital patient care staff leadership. These
  performance metrics would address measurable and
  time limited results in the Big Four arenas of
  
• People Physician leaders will guide and
  cultivate the capabilities of physician
  colleagues and Local staff in their specialty or
  clinical program. Metrics for physician and staff
  satisfaction will be defined for each year
• Health Care Physician leaders will each have
  specific performance expectations for clinical
  quality and patient safety. The physician leader
  and his/her mentor (COS, VPMA, or Division Head)
  will select a small number of measures from a
  Local list of priority metrics
• Experience Physician leaders will drive an
  optimal patient experience and will have patient
  satisfaction targets for the year
• Stewardship Physician leaders will have
  performance targets for quality, service growth
  and cost-effectiveness in their specialty or
  program area

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Two Main Methods to Select Physician Leaders at
Local Hospital
Potential advantages
Potential disadvantages
physicians may have a greater sense of control
over their destiny physicians select colleagues
they are most comfortable with physicians know
the clinical skills and personality of their
colleagues Physicians may be more accepting of
practice constraints by elected peer.
Temporary nature results in less influence into
hospital decision processes leader less likely to
make difficult decisions about friends physicians
would not know leadership skills of
colleagues physician may be more willing to
resist a peer
Election by active medical staff members
Physician leaders will be more empowered Better
clarity of which physician leader to go to, to
get stuff done hospital more likely to find and
develop leadership talent clearer
accountabilities for Best Care Best Experience
accreditation compliance readiness for
pay-for-performance and hospital economic
vitality strategies. leader less impacted by
peer pressure to avoid or delay change Increased
consistency and continuity for medical care
process quality across continuum of ambulatory
and inpatient care Greater integrated care
system effectiveness enhances care of patients.
Appointment by Hospital
physicians feel some loss of control over their
practice within hospital leader needs to
establish rapport and gain support from physician
colleagues Non-Group physicians may feel
disenfranchised
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Why is a blended model of election appointment
favored?

• This a judgment call based on an assessment of
  which method is expected to consistently yield
  over time the highest probability to find and
  place the best physician leadership talent.
• It is not just about selecting 2-3 good physician
  leaders. We need a few dozen great physician
  leaders who can work together as a closely
  integrated team of physician decision-makers,
  change champions and effective leaders.
• No method is perfect, and each can have
  disadvantages depending on how it is carried out.
• Experience has demonstrated that the probability
  is higher with a well informed appointment by the
  medical group and hospital leaders that assess
  the leadership team work potential of
  individual physicians, and who are ready to
  develop, monitor, and support the success of the
  physician leaders.

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Work Groups Recommended Approach for Physician
Leader Selection
Alternate Methods to Select Leaders
Appointment via
Physician Leader Roles
Hospital Group
Elect
Chief of Staff
Hospital
Group
Vice President Medical Affairs
Chief of Staff, COS Elect
Committee Chairpersons in Med Staff
5 MEC at large positions, (one for each Division
elected from within Division members)
5 MEC Division Heads
Section Heads
Medical Directors
Medical Education Leaders
The Work Group recommends that there be at
least one, non-Group physician leader in the MEC
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MEC Composition
Proposed Physician Leader Positions

• COS, COS Elect, Past COS 3
  Elected
• Division Members at Large 5
  Elected
• CEO, VPMA, VP Pt Care 3
  Appointed
• Division Heads
  5 Appointed
• Chair Board of Directors (or designee) 1

Physician Leadership Positions

• Medical Staff Committees appointed by COS
• Medical Staff Section Heads reduced number and
  appointed by VPMA CEO in consultation with COS
  Division Heads
• Medical Education Leaders Appointed by VPMA
  CEO in consultation with COS
• Medical Directors significant reduction to be
  defined in 200x by VPMA, CEO in consultation with
  Group leadership.

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10 Key Resources Needed in Next Budget Year

• Compensation to physician leaders or their
  group. Also each leader eligible for Presidents
  Award for exemplary leadership effectiveness in
  past year
• Mentoring support and encouragement from either
  Chief of Staff or VPMA
• Annual orientation and/or Leadership Refresher
  Programs
• Preferential access to CME and leader
  developmental learning experiences
• Collegial support on leadership best practice
  from periodic meetings and information exchange
  sessions with leaders from Group and Local
• Collegial support from an experienced clinical
  administrative partner
• Staff support from an expanded hospital Medical
  Staff Office staff development, IT, Intranet,
  enhanced educational materials
• Reimbursement for any routine telecom or
  out-of-pocket expenses related to the leadership
  work for Local
• Access to special training and support on how
  best to use the hospitals admin and IT
  resources
• A mid- and end-of-year review meeting with the
  VPMA and/or hospital CEO to identify mutual
  strategies to continually enhance the
  effectiveness of the collaborative relationship
  between physician leader, hospital executives,
  the MEC and the Group

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Once selected for leadership role, physicians
must be supported to excel in their roles. We
must invest in their continuous development and
effectiveness
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Building Blocks for Physician Leadership
Strategic Imperatives

• Quality Patient Safety
• Pay for Performance
• Integrated Care Systems
• Cost Effectiveness
• Attract Retain Excellent Clinicians and Staff

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1. Leader Positions Defined

• The number, type, and roles of physician leader
  positions are shaped by our strategic imperatives
  and market challenges.
• Decisions to define these positions are shared by
  the Local Hospital Board, CEO, the VPMA and the
  Medical Executive Committee (MEC) of Local
  Medical Staff
• We need to streamline the number complexity of
  our physician leadership positions to assure the
  quality, focus, and cost-effectiveness we need to
  meet our strategic plans.

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2. Position Descriptions

• The roles, responsibilities, desired capabilities
  and performance metrics for each physician leader
  position will be explicit, fair and transparent
  for all leadership of Local Hospital
• Standard formats will be used for each physician
  leader position
• Position descriptions will be posted and
  accessible on an enhanced Medical Staff intranet.
• Each physician leaders bio and photo will
  accessible on a new Medical Staff intranet
• Human Resources staff and the Medical Staff
  Office staff will be responsible working with the
  COS and VPMA for keeping the position
  descriptions current and accessible

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3. Recruit for Competencies

• All physician leadership positions will be filled
  by physicians in good standing on the active
  medical staff of Local Hospital.
• Each physician leader must possess the unique
  knowledge, skills and attitudes needed for their
  important role as champion for the care of
  patients in Local Hospital, and for the
  cost-effective operation of Local Hospitals
  clinical services and programs
• Physician leaders are to be of the highest
  integrity and dedicated to work diligently to
  earn the respect and trust of their physician
  colleagues and the staff leadership of Local
  Hospital
• To insure understanding of the unique integrated
  care model of Health Partners and the competency
  to excel in an integrated care model, it is
  expected that each physician leader will either
  be a member of the Group or a physician group
  under contract with Local Hospital

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4. Performance Metrics

• As with all Local Hospital leaders, physician
  leaders will be expected to meet specific
  performance targets within the work of Best Care
  Best Experience standards
• General performance metrics will address
• People Physician leaders are to help guide and
  cultivate the capabilities of physician
  colleagues and Local staff in their specialty or
  clinical program. Metrics for physician and staff
  satisfaction will be defined for each year
• Health Care Physician leaders will each have
  specific performance expectations for clinical
  quality and patient safety. The physician leader
  and his/her mentor (COS, VPMA, or Division Head)
  will select a small number of measures from a
  Local list of priority metrics
• Experience Physician leaders will help
  contribute the an optimal patient experience and
  will have certain patient satisfaction targets
  and plans to achieve the targets for the year
• Stewardship Physician leaders will have certain
  targets for service growth and cost-effectiveness
  in their specialty or program area
• Each physician leaders performance will be
  stated in an Annual Performance Agreement that
  defines opportunities for recognition and reward
  from their performance

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5. Orientation

• Each leaders orientation should address such
  topics as
• Context of Leadership Position
• Local Hospitals mission for excellent patient
  care
• Local Strategic Plans
• Best Care Best Experience work
• Group Compacts
• Medical Staff Mission and Accountabilities
• Local Hospital Operating Processes
  Organizational Structures
• Position Duties and Responsibilities
• Opportunities for Performance Enhancement Support
• Opportunities for Recognition Rewards

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6. Development

• Mentoring
• Continuing Education Opportunities
• Access to Information
• Access to Local Hospital executive staff
• Access to technology resources

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7. Support

• Streamlined hospital processes
• Maximized communication resources
• Staff support from Local Hospital Medical Staff
  Office
• Partnership with and support from clinical an
  administrative directors

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8. Performance Reviews

• Purpose is support to optimal leader growth and
  success
• Annual Self-assessments discussed with either
  COS, Division Head or VPMA
• Two mid-year reviews with COS (Committee Chairs),
  Division Head (Section Heads) or VPMA (Medical
  Directors)
• Annual 360 Review that parallels current Group
  process
• Performance reviews will influence recognition
  reward opportunities

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9. Recognition Rewards

• Monetary and non-monetary rewards will be
  employed to reinforce our shared commitment to
  excellent physician leadership development and
  accomplishments. Extensive annual surveys of
  medical directors offers comparative benchmarking
  opportunities.
• (Bonuses for individuals should be explored in
  the updated Affiliation Agreement which now is
  focused at organizational level)
• Non-monetary rewards can include (this
  should be shaped by polling the leaders)
• Praise at medical staff and board meetings
• Certificates and gifts of appreciation
• Paid trips for continuing education
• Others as agreed to by MEC, VPMA and CEO

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CARDIOLOGY NATIONAL MARKET DATA INDIVIDUAL CASH
COMPENSATION TO WORK RVUs
Higher than Expected Compensation
75th Percentile 71.75
Market Median 52.49
Lower than Expected Compensation
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FMV Legal Considerations

• Healthcare organizations entering into, modifying
  or renewing financial relationships with
  physicians and other providers must comply with
  the federal and state laws that regulate these
  relationships. Laws are numerous and complex but
  the key areas of review include
• Stark Laws
• Anti-kickback Statute
• Fraud and Abuse
• Excess Benefit
• Fair Market Value (FMV) is fundamental
  requirement under all of these laws
• Final Stark II Regulations established new
  requirements for determining FMV of physician
  compensation
• FMV not just based on arms length bargaining
  alone (subjective)
• FMV determination must also include comparisons
  to national benchmarks for Stark II Safe Harbor
  (measurable, objective)

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Performance metrics matter
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10. Periodic System Refinement

• Our industry and market pressures are
  continuously changing
• The pursuit of continuous improvement applies to
  our physician leadership programs and systems
• The systems and policies for our physician
  leadership programs and system can be reviewed as
  needed and as requested by the MEC, VPMA or CEO

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Actions for Implementation

• Jan 200x Review proposed new model with current
  physician and administrative leaders of hospital
  and medical staff
• Feb 2006 Secure approval for the recommended new
  model of physician leadership from MEC, Local
  Management and Board
• Feb 200x Initiate review of position
  descriptions and orientation materials
• March 200x edit and secure final approval of
  Medical Staff by-laws
• March 200x Update Agreement between Hospital and
  group or doctors
• April 200x Begin appointment process all
  physician leaders while streamlining number of
  positions
• April 200x Enhance Medical Staff Office
  Infrastructure Support (staff development, IT,
  PhysicianLeader.net, education budget)
• April 200x Conduct Spring Physician Leadership
  Institute to introduce new model and explore
  national best practices
• Summer 200x conduct 10-12 physician leader
  mentoring opportunities
• Summer 200x Celebrate 3-5 physician Leaders via
  internal and external media recognition
• September 200x Conduct Fall Physician
  Leadership Institute
• November 200x Conduct Annual Physician Leader
  Performance Reviews