When you come to a fork in the road take it.

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Gertrude Peters
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1 Strategic Initiatives on Physician-Hospital Alignment Fact and Fancy an Insider s Perspective Becker's Hospital Review 5th Annual Meeting Ronald N. Riner, MD President and CEO May 17, 2014 When you come to a fork in the road take it. - Yogi Berra You should never cease from exploration, and at the end of all exploring you arrive where you started and know the place for the very first time. - Little Gidding, T.S. Eliot

2 Changing Employment Dynamics Private versus hospital-owned practices, % Physicians in private practice Physicians in hospital-owned practices 75% 50% 25% 0% Source: Physician Compensation and Production Survey, Medical Group Management Association, 2011 Survey Facts Majority of physicians and other healthcare providers are focused on delivering high quality and safe care Despite common purposes, many healthcare systems and hospitals struggle to involve physicians in organizational leadership, strategy, quality and safety efforts Need to get real about finances Incentives Cost of rules and regulations Financial metrics of acquired practices Value from all perspectives is not well appreciated Rules and Regulations

Top Challenges Reported by US Physicians 91% 90% 88% 84% 83% 78% 77% 73% Managing shifting

spending time with patients Dealing with the impacts of the Affordable Care Act Keeping up with the

increasing patient volumes Source: Wolters Kluwer Health, 2013 Physician Outlook Survey Thursday,

3 Top Challenges Reported by US Physicians 91% 90% 88% 84% 83% 78% 77% 73% Managing shifting reimbursement models with payers Financial management of their practices Patient engagement; spending time with patients Dealing with the impacts of the Affordable Care Act Keeping up with the latest research Improving patient care Using health information technology in the practice Managing increasing patient volumes Source: Wolters Kluwer Health, 2013 Physician Outlook Survey Thursday, February 13, 2014 Rationale The Employment Carrot Port in a storm Course of least resistance Possible coordinated care

4 Employed MDs Who? Why? Where? What s it like inside the tent? How are they doing? Key Points Where professionals are in their careers Exit strategy for older physicians Gender Happiness is a relative issue! Challenges to Physician Employment Employer employee relationship Accountability Transparency Scientific cynicism Engagement Credibility of the leadership Followership

5 Leadership The Concept of Entrepreneurship Philosophical Concerns Short Term vs. Long Term Professional Concerns The ability to innovate Stifling bureaucracy Transformation from profession to a job Theory vs. pragmatism Ideology vs. reality and experience

6 Loyalty Finances: Key: Not the glue Purposeful, Challenging Work Mission Vision Values Issues Trust Issues Talent

7 A Calling? A Job? Go and do likewise. Luke 10:37 Hospitals View the world from their vantage point still! Bricks and mortar don t practice medicine or deliver care Hospital acquisitions lead to higher prices and the amalgamation of additional cultures Clinical Integration What s the objective? In many instances just buying revenue streams or attempting to guarantee a distribution channel

8 Nota Bene! Hospital and medical practices are different businesses Different metrics It takes an endless amount of history to make even a little tradition. - Henry James Key Question Are Mayo Clinic, Cleveland Clinic and the large staff models applicable to your environment?

9 Importance of Culture Decades to build Often absent in small business other than in presence of founders In established and stable systems, reflective leadership and training Management Motif Professional Service Firms Medical practice Accounting Law Practice Plant Management Factories Hospitals Hotels Management: Cultural Difference Medical Practice Values autonomy, trained to work independently and take ultimate accountability The need for quick decisionmaking sometimes life and death in the balance Resistant to hierarchy Trained in biomedical sciences, clinical expertise Seeks consensus in group decisions Hospital (Plant Management) Trained to delegate and work in groups, embraces the collective mission Deliberate decision-making Hierarchy is key to success Trained in management, social sciences Respects top-down hierarchy when making decisions Adapted from: Nathan Laufer, MD, The employment of doctors by hospitals-indentured servitude or practice salvation?

10 Leadership Skills & Management Motifs Different Professional Service Firms Plant Management Medical practice Accounting Law Practice Medical Practice Factories Hospitals Hotels Transferability Hospital and Health System Current Lexicon Evidence-based care Appropriate use criteria Outcomes Value = Quality Cost Readmissions Patient/associate/ physician satisfaction Leadership capabilities Value Professional Perspective Supportive, knowledgeable Purposeful and meaningful work colleagues Degree of autonomy Value = Quality Cost Trustworthy systems Quality focused knowledgeable support staff Satisfactory compensation Credible leadership Learning environment Quality of life (balance)

11 Value Patient s Perspective Meeting expectations with outcomes Physician communication Easy access Value = Quality Cost Friendly, caring staff Reasonable cost Value Hospital/Health System Perspective Favorable managed care and payor relationships Value = Quality Cost Highly productive clinicians Positive revenue streams Coordinated (? integrated) care Safe, quality focused care Market leader status The next morning the sun was behind a cloud, but they started on, as if they were quite sure which way they were going. If we walk for enough said Dorothy, we shall sometime come to some place, I am sure. -The Wonderful Wizard of Oz, L. Frank Baum

12 Fallout if Done Poorly Fallout for Physicians Fallout for Payors Fallout for Hospitals Fallout for Patients Concerns That You Should Worry About Digital world realities The importance of thick data Burn out Loss of excitement and professional satisfaction Quality For patients For the institutions For those providing the care For yourselves and your families Leadership Focusing on Results But you have not yet told me how to get back to Kansas. - Dorothy, The Wonderful Wizard of Oz

13 Leadership The Complexity of the Task "Do you think Oz could give me courage? asked the Cowardly Lion. "Just as easily as he could give me brains, said the Scarecrow. "Or give me a heart, said the Tin Woodman. "Or send me back to Kansas, said Dorothy. - L. Frank Baum The Wonderful Wizard of Oz, Author Leadership Adaptive leadership Focused on building skills needed for new know how Different than leadership charged with organizational challenges The power of collaboration Long-term focused Leadership Innovation Evidence-based medicine Best practices Guidelines

14 Why People Fail to See the Changes Occurring They choose to ignore or accept changes in the external environment Issues Alternative payment mechanisms Transformation of place of delivery of health services Who should deliver care The importance of an energized, creative, quality-focused healthcare workforce It was a lie but he believed in telling lies to people. Truth telling and medicine just didn t go together except in dire emergencies, if then. - Mario Pruzo, The Godfather

15 Future Think value Do you need to own all? Should you? Can you? Understand the business metrics and leadership requirements of the different businesses The talent is the asset: Science and business Credibility Experience Leadership focused The power of credibility Quality and safety Multidimensional The Brass Ring The Brass Ring Harmony

A Brief History of Medicine 2000 BC Here, eat this root. 1000 BC That root is heathen, say this prayer. 1850 AD That prayer is superstition, drink this potion.

1995 AD Managed care could be dangerous. 2000 AD Antibiotics are artificial; here, eat this root. 2010 AD Value is finally upon us.

16 A Brief History of Medicine 2000 BC Here, eat this root BC That root is heathen, say this prayer AD That prayer is superstition, drink this potion AD That potion is snake oil, swallow this pill AD That pill is ineffective, take this antibiotic AD Managed care will correct all that ails us AD Managed care could be dangerous AD Antibiotics are artificial; here, eat this root AD Value is finally upon us... as are monumental rules, regulations, requirements 2014 AD Obamacare is 4 years old here, say this prayer with this potion! The comic and the tragic lie inseparably close, like light and shadow. - Socrates In the end, only three things matter: how much you loved, how gently you lived, and how gracefully and effectively you let go of things not meant for you. - Buddha

17 Somewhere over the rainbow an unending journey

Integrated Leadership for Hospitals and Health Systems: Principles for Success

Integrated Leadership for Hospitals and Health Systems: Principles for Success In the current healthcare environment, there are many forces, both internal and external, that require some physicians and