In 2019, the number of physicians in private practice in the United States decreased to fewer than 50% of all physicians(1); the COVID-19 pandemic is predicted to press this number even lower. More physicians are joining large multispecialty groups or healthcare and hospital systems. This trend is superimposed on the Centers for Medicare and Medicaid Services (CMS) influence to reimburse for the value of clinical care.
A three-year growth of 30% in the number of providers within our health system’s multispecialty medical group, Centra Medical Group (CMG), was associated with increasing operational costs, redundancies and inefficiencies of unfocused incentivized production, and poor alignment around population-based healthcare(2) to support the Quadruple Aim.(3) Service lines (SLs) of clinical care that are patient-focused and efficient have been proposed as a method to meet these rapidly changing goals of combined clinical value and cost-efficient care. Operational support of these SLs needs to be consistent, effective, and include many elements of the multispecialty medical group that can now be better described as a management services organization (MSO).(4,5)
Such dramatic changes in healthcare require leaders(6) with insight, courage, and clinical acumen who have empathy with the patient and the patient care delivery team. Physician leaders who have gained leadership skills or who have received formal administrative and leadership training are ideal potential leaders in this new era of healthcare.(6,7) As Angood notes, “a constellation of forces place physicians at the center of this stage.”(7) SL leadership is one of these areas that can benefit from physician leadership with the expertise to understand and communicate about the unique clinical conditions coordinated with an administrative dyad partnership.
Our organization, which provides care in many rural areas of Central Virginia, has more than 500 employed providers in the CMG formed as a multispecialty medical group and an organizational operating revenue of more than $1.2B. The isolated geographic setting offered an ideal set of circumstances to develop a network of primary and specialty care supported by an SL model.
Timeline of Lessons and Milestones of the Transformation
Developing clinical SLs requires a sequential set of actions; these are listed in Periods I, II, and III in Figure 1. We describe key milestones and lessons learned in each period in Table 1. We have characterized these milestones by shading in one of three different groups: (1) Critical Success Factors; (2) Senior Leadership Key Contributions; and (3) Administrative Key Contributions.
Figure 1. A Timeline of Transformation. The timeline is divided into three key periods and labeled as Period I, Period II, and Period III as referenced in the text. This timeline contains the significant elements that played a role in the transformation of the CMG to an MSO supporting a set of SLs. The various shades indicate a code for similar areas of Critical Success Factors (); Senior Leadership Involvement (); and Key Administrative Involvement (). Key lessons learned are indicated by the () bands of time. The specific operational elements are described in Table 1.
Period I – Preparing the Foundation and Setting the Stage
During Period I, key lessons revealed that developing a culture and guiding principles around compensation, establishing data sources, and educating leaders about self-governance were important to set the foundation for SLs to form and function. This journey began in 2015, well before the critical need was identified.
A culture establishing an environment of learning leadership skills, collaboration, and engagement (Table 1; Culture) is a prerequisite for SL success. The use of annual performance evaluations for providers with feedback about expectations of provider leaders was new for many providers in 2015, but was supplemented with formal and informal education.
A gathering called the Medical Director Forum (Table 1; Culture) provided open discussion time for physician leaders to review administrative challenges. It normalized the frustration of the solely clinician membership regarding administrative processes and provided a journal club style format of how to improve the inefficiencies.
Additionally, a formal selection process for organizational funding of graduate work for areas of leadership was established in Period I and used by physicians and an advanced practice provider (APP). Many of these physicians and the APP would transition to become leaders in the SL Council five years later.
A modular compensation model for some provider leaders included production, quality, citizenship, and eventually system objectives. The guiding principles for compensation were developed by a provider-led multispecialty committee and became simpler with time (Table 1; Self-Governance, Compensation). During this time, alignment of specific quality measures would set the stage for all providers to receive some compensation at risk for meeting accountable care organization (ACO) metrics several years later. This introduction supports the risk-based targets now under development.
Self-governance was historically taught in a set of key committees of the CMG. Critical to SL success, this maturing culture of self-governance decisions contributes to an improved group rather than an individual provider or provider specialty. Self-governance of the SLs by way of the SL Council reporting to senior leaders and not the CMG emerged from the Executive Clinical Enterprise Medical Leaders Forum (ECEMLF) in Period II, facilitated by COVID-19 (Table 1; Self Governance). Combined health system viability and SL improvement started in the CMG, matured in Period II, then transitioned to the SL Council in Period III.
Data availability, extraction, governance, and usefulness by individual providers have been, and continue to be, areas that require ongoing attention. Data extraction and publication were fully supported by the CFO, CMO, and CEO, whose support involved purchasing and standardizing new software and installing a single electronic health record.
In June 2019, the concept of physician enterprise (PE) distinguished employed providers delivering services as a collective group and was a precursor to SL development (Table 1; Data). The dashboards were updated daily for productivity, patient access standards, and quality measures such as the ACO measures. Total SL-specific statements measuring all revenue and costs for services were more difficult to generate with the new SL definitions. The electronic medical record (Cerner®), installed in 2018, helped convert multiple data systems into a single data set.
Period II – Selecting SLs and Expanding Self-Governance
The initial determination and the final selection of SL candidates occurred during Periods II and III. In November 2019, the PE addressed key questions from senior leaders, such as, “Why change to SLs?” as it evolved to the future ECEMLF (Table 1; Self-Governance, SL). Delineating work for the growing CMG to allow SLs to be more accountable for productivity, quality, patient engagement, patient access, budgets, and strategic planning would help the CMG with inefficiencies.
In March 2020, the ECEMLF was chartered to manage the COVID-19 pandemic by involving key clinical leaders early and directly in decision making. In February 2020, the ECEMLF recommended to the CEO and senior leaders that elective procedures be discontinued and that critical care areas be shifted to COVID-19 areas well before this action became a national trend (Table 1; Self-Governance). COVID-19, therefore, facilitated rapid and system-level, self-governed decision-making as training for these leaders. They are now acting as organizational stewards while retaining their subspecialty expertise.
On June 29, 2020, a critical planning session by the senior organizational leaders and the CEO resulted in endorsement of “PE Redesign” (Figure 1, Period II). On August 7, 2020, a locally developed multidisciplinary design conference for SLs was conducted (Table 1; SL). Guiding principles for SL choice emerged as the following: (1) Generating Revenue, (2) Patient Volume, (3) Filling Gaps of Care, and (4) Dyad Pair Experience and Training (Table 1; SL). In Period III, further clarification was added using codes (ICD-10, DRG, CPT), provider-based characteristics, and care family groupings.
Using these initial guiding principles, nine SLs were identified (Table 1, SL), and a sequential deployment planned to learn from each SL activation (Figure 1, Period III). In September 2020, three SLs were started; in December 2020, three more were chartered; the last three were formed in March 2021 (Table 1; SL).
Period III – Role Definitions for Dyad Pairs, SLs and MSO, and Finalizing SL Definition
Period III is marked by final financial and clinical definition of the SLs with support of an outside vendor, as well as documentation of the roles and responsibilities for both individuals and the new operating structures of the SL and medical group/MSO (Table 2). These role definitions helped tremendously with the initial problem of inefficiencies of a rapidly expanding medical group managing multiple services.
The clear roles listed in Table 2 helped delineate work and focus the SLs on the expectations. Some SLs had already begun SL integration, such as Behavioral Health (BH) deploying APPs to Primary Care (PC) clinics. Also, BH providers were added to cardiology where the model was somewhat different, with cardiology hiring BH specialists.
Consistent practice for integration of SLs would need to be further clarified with decision rights defined. These decision rights of self-governance must be determined at the SL Council and supported by the reporting structure to senior leadership. Having SLs report to senior leaders rather than to CMG improves leadership distribution, but with the risk of inconsistent leadership practice.
Between August and December 2020, the charter for the SL Council was drafted along with roles and responsibilities for the medical group/MSO. The health system board was briefed, generic SLs (Table 2), and specific job descriptions for the dyad pairs outlined (Table 1; Dyad Roles). A major difference between being a medical group with multiple services and departments and the specific SL authority, structured leadership, and self-governance with organizational senior leader oversight is the reporting to the CMG. The delineation of medical group/MSO and SL roles distinguishes the work and allows the MSO to support SLs and SLs to be more directly responsible to the health system senior leaders.. These new roles must be accepted by all members.
During January 2021, with the departure of the CEO, the chief medical officer, and the chief nurse, the loss of senior leadership accelerated the decision of dyad leaders to fully embrace the SL concepts.
Results and Next Steps
Preliminary results are reported for four selected SLs (Cardiology, PC, BH, Neurology) which have been defined well enough to aggregate data and were fully operational by December 2020. Investment per provider was reduced from $240,033 in 2019 (pre-COVID) to $209,394 in 2021 compared to the MGMA/AMGA targets of a median weighted value of $207,952. This reduction for the SLs was a weighted total cost reduction of $4.039M.
Many possible confounding variables may have contributed to this very early result. We did not see consistent improvement in preliminary measures or in our ACO metrics, but these are being finalized for our 2021 CMS submission. The next steps will be in the following areas: (1) Clarify SL definitions, (2) Produce financial statements with refined data showing all revenue and cost for SLs, and (3) Train and mentor leaders with the new roles and responsibilities.
Summary and Conclusion
Successful transformation to an SL model depends on determining a need for a SL structure, setting and accomplishing key sequential milestones, performing with consistency of purpose and well-delineated roles and responsibilities, using well-trained clinical leadership effectively, and having support from senior administration.
Acknowledgments: The authors would like to acknowledge the following people for their involvement, thoughtful review, and helpful comments regarding the preparation of this report: Matt Foster, MD; Chris Thomson, MD; Doug Davenport, CFO, and Beth Reeves, Centra Health.
Disclaimer: The views expressed in this document are those solely of the authors and do not reflect the views of the organization, Centra Health, or any organization affiliated with any of the authors.
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