American Association for Physician Leadership

Peer-Reviewed

Lessons Learned in the Transformation of a Multispecialty Medical Group to a Management Services Organization Supporting Multiple Service Lines

H. Lester Reed, MD, FACP


Chad Hoyt, MD, FACC


Jeremy Hardison MD, MBA


Dani Madril, MD, MHCM, FASA


July 1, 2022


Physician Leadership Journal


Volume 9, Issue 4, Pages 24-28


https://doi.org/10.55834/plj.8913182966


Abstract

A 30% growth of providers within the multispecialty Centra Medical Group’s health system was associated with increasing operational costs, inefficiencies of incentivized production, and poor alignment around the Quadruple Aim. Clinical services and management services were associated with redundancy and unclear roles and responsibilities. As the services grew quickly in scale, they required more autonomy, accountability, and self-governance, necessitating a change in the operating model. The service line model (SL) was selected as an efficient system for delivering cost-effective, patient-centered, disease-specific care when organized and led effectively. Key lessons with examples of specific actions and outcomes, as well as processes followed, are shared. Preliminary financial results of a $4M in savings from the initial deployment of four of the SLs are also discussed.




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.

References

  1. Kane, CK. Recent Changes in Physician Practice Arrangements: Private Practice Dropped To Less Than 50 Percent of Physicians in 2020. AMA Policy Research Perspective. Online Open access: Physician Practice Benchmark Survey | American Medical Association (ama-assn.org). Accessed 10 November 2021.

  2. Butcher, L. Populations Health Management, 2021 Style. Physician Leadership Journal. 2021;(July/Aug);20–22.

  3. Bodenheimer, T, Sinsky, C. From Triple to Quadruple Aim: Care of the Patient Requires Care of the Provider. Ann Family Med. 2014;12(6):573–576.

  4. Ajao, Y, King, S. An Introduction to Building a Management Services Organization (MSO). COPE Health Solutions. COPE Health Solutions. An Introduction to Building a Management Services Organization (MSO) | Blog | Cope Health Solutions. Accessed 10 November 2021.

  5. Frier DB. Physician Integration Models: CINs, MSOs and Integrated Group Practices. 23 April 2018. Physician Integration Models: CINs. MSOs. & Integrated Group Practices (frierlevitt.com ). Accessed 10 November 2021.

  6. Perez J. Leadership in Healthcare: Transforming from Clinical Professional to Healthcare Leader. J Healthcare Management. 2021;66(4):280–302.

  7. Angood, P. The Value of Physician Leadership. Physician Leadership Journal. 2014;(May/June):6–22.

H. Lester Reed, MD, FACP

H. Lester Reed, MD, FACP, completed 6½ years with Centra Health System and is retiring in 2022 as senior vice president and senior physician executive advisor after 42 years of administrative and clinical roles.


Chad Hoyt, MD, FACC

Chad Hoyt, MD, FACC, is the former executive chair for the Centra Heart & Vascular Institute in Lynchburg, Virginia. He currently serves as the executive director for clinical growth & outreach at the University of Virginia Health System.


Jeremy Hardison MD, MBA

Jeremy Hardison MD, MBA, heads the Brain and Spine Service Line as well as Critical Care at Centra Health in Lynchburg, Virginia.


Dani Madril, MD, MHCM, FASA

Dani Madril, MD, MHCM, FASA, is the chief medical officer of Centra Medical Group in Lynchburg, Virginia. She manages the daily operations of Centra’s ambulatory care sites and oversees the employed provider enterprise services.

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Topics

Systems Awareness

Quality Improvement

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