Episode 078: Learning to Run

Speaker 1: You are listening to Your Practice Made Perfect, support, protection, and advice for practicing medical professionals. Brought to you by SVMIC.

Brian: Hello. Welcome to our podcast. My name is Brian Fortenberry. Today on our episode, we're going to be discussing Office Governance. Joining us to inform us about some of the intricacies of that is Steve Dickens. Steve, thanks for being here.

Steve: Well thank you for having me, Brian.

Brian: I would like for you to start by telling our listeners a little bit about yourself, about your background, and your time at SVMIC.

Steve: Certainly. I have been at SVMIC for almost 11 years now. During that time I've worked in risk management and medical practice services. I currently serve as the vice president of medical practice services, which is the group of people who help physicians and practice executives run their offices from a business perspective. Prior to joining SVMIC I spent 15 years in hospital-related businesses, physician practices, home care, before joining a physician-owned multi-specialty group, and have worked in healthcare my entire career, and have been very active in MGMA along the way.

Brian: Well absolutely you have done, I know, an incredible amount of great work here at SVMIC, and previous to this. You've been very active in MGMA even serving nationally with the MGMA, so thanks for taking the time to join us and discuss this particular topic about Office Governance. So let's start from the basics. What is organizational governance?

Steve: What we're talking about is really the way a practice runs. Organizational governance goes to the structure of the practice whether it's individually physician-led, whether it's led by an executive committee, a board of directors, whether all partner physicians work together to govern the relationship with a practice executive, delegation of duties. It's about how the things get done, how decisions are made, and how the practice decides what it wants to be.

Brian: Explain to us a little bit about why it is so important to make sure that there is a structure of governance?

Steve: Well, it's important because if the practice doesn't have an active leadership, a functioning leadership model, then it really inhibits its ability to make strategic decisions. It impacts its ability to react to market forces, to changes in the industry whether those are regulatory, or something from the payers. And the practice that really fails to plan for the future will often times very quickly find itself left behind. Poor governance often leads to bad decisions. It leads to inefficiencies and end up costing the physicians money and impacting their compensation.

Brian: These governance committees or people, how is that done? Do you normally see mostly physicians in practices? Do you see a mix of executives, and is there one that is more predominant than the other? And if so, what really works better and why?

Steve: Well, one sees a broad cross-section across practices. In some organizations, it is entirely physician-driven, and other organizations it's driven entirely by the administrative staff, but the better performing practices actually find a way to merge those together. So the ideal situation is physicians making decisions in terms of the mission, and the values of the organization, deciding who we want to be, what is important to us, what are the guiding principles that really help us make the decisions we need to make on a daily basis, and then in conjunction with the CEO, the administrator, or the office manager, they're doing the strategic planning process together.

And once we have defined who we are and who we want to be we can talk about how we get there, and what are those goals. And then that allows the practice executive to then execute those. Once the physicians have set the direction it really then becomes the responsibility of the management team to execute those decisions and report those back to the physicians, and then together they're able to tweak those, so ideally we like to see that lead physician administrator dyad model.

Brian: That does make a lot of sense because everyone has to be on the same page, if they're not, then you have different directions that you envision the practice going, or you have unrealistic expectations on one end that can't really truly be carried out on the other end. That's going to be problematic as well. What would you say, Steve, the impact of say, poor organizational governance can be? What are some of the pitfalls that they're going to find?

Steve: In an organization that doesn't have good governance what generally will happen is that there is no defined culture. Physicians may say what's important to them, but if they're not making conscious decisions that impact the way they practice medicine, and impact their patients, and their staff on a daily basis, generally what happens is they get so caught up in their responsibilities as physicians they don't pay attention to those other things.

Brian: Sure.

Steve: And so, it's either left to the administrator, or the practice executive to manage everything and determine what the culture is, or more often than not, the staff will end up defining the culture. It is our experience that when culture is not defined at the top it will still form, but the difference is that it will form at the lowest common denominator.

Brian: Yeah.

Steve: And so, that's where we tend to find practices that have what we call governance disorder. They're not able to make decisions. They're not able to make decisions in a timely manner, or if they do make decisions then everybody doesn't abide to them.

Brian: Sure.

Steve: We may all get in a meeting and vote and agree to do it, but then we walk out, we go back to, "Well, I didn't vote for that," or "I don't want to do that. I don't like it." And those are the groups that tend to fall true. Those are also the groups that aren't able to deal with disciplinary issues. We have someone who’s not performing. We have someone who’s not pulling his or her weight. And we simply don't deal with it because we don't have a governance mechanism to do so.

Brian: I have heard people before say, "Well, instead of appointing people, and instead of really forming it ourselves we'll just let it organically happen." It sounds like what you're saying is, if it organically kind of happens it is going to be the lowest common denominator, and you're going to have issues, correct?

Steve: It is. When it organically happens people will generally look for the easiest way out. We're all busy, and we know that the pressures placed on physicians are growing every day. And at the same time, the pressures on their employees, and patients are growing at the same time.

Brian: Sure.

Steve: And if we aren't stopping to think about what we're doing, and why we're doing it, and how we do it, it really just becomes an issue of putting out fires, and let's do the easiest, quickest thing that we can to get to the end of the day.

Brian: Absolutely. Treading water is not a strategy, is it?

Steve: Not a good one.

Brian: That takes us to that next step that once you have this governance you have to have a plan.

Steve: Yes.

Brian: And if you're looking at a plan and thinking you're probably going to need a strategic plan, why is that important and how do you do that?

Steve: You're absolutely right, Brian. Well, the reason we do strategic planning is because groups have to identify themselves, and in doing that the members of the group, the physicians, and even the staff, it allows them to buy into the group, and it helps them understand how they should be allocating their very limited resources. And without strategic planning the group doesn't know where it's going, but doing it allows us to plan for the future. And if you don't have effective governance there is no point to doing a strategic plan because it won't be executed, it won't be followed.

Brian: Sure.

Steve: It is a waste of time, and culture will eat strategy every day of the week. So the first step really is to define that governance model, and once you've done that you can move forward with strategic planning. We work with groups and help them with strategic planning. And the way we begin that is we always like to meet with the lead physician and the practice executive to make sure that they are on the same page to learn what their expectations and goals of a strategic meeting are, or sometimes it's to discuss, you know, whether we need to add physicians. We have physicians who are retiring. Do we need to add a new building? It may be things like that.

Brian: Sure.

Steve: It may just be a regular touch base. Let's look at our goals from last year. Do they need to be updated or changed, but once we had that initial meeting with the physician and practice executive, we can make some recommendations about how to proceed. Often times we will do a survey of the physicians and that may be just the board members, the members participating in their strategic retreat, it may be all the physicians in the organization depending on its size. And that gives us a sense of what's important to them, and helps us lead the conversation based on the trends we see.

It can also be very helpful to survey the staff. Now, we don't ask all of the same questions of the staff that we do of the physicians, but many of the initial questions are the same. And what that does is help the physicians to see whether their staff see the organization differently than they do, and that can be really eye-opening for a lot of physicians. Once we've done the survey process we're able to provide that data back. If necessary, we can do a financial analysis, an operational analysis, a compensation analysis depending on what the group is looking at, and from there we move into the retreat and the conversation about what they want to do.

Brian: Maybe they haven't formed their organizational governance yet, or their office governance, it sounds like certainly, you guys in your department at SVMIC can help them do that. And then if they have and maybe things aren't going well, it really sounds like you have a process in place that you and your team can come in and help get them to where they need to go. Maybe if there’s differences in opinion through all these surveys there can be some, as you said, enlightening moments that their eyes are open even wider to see that. Those are certainly services that you guys provide, correct?

Steve: That is correct. At the end of the day, it is up to the physicians to decide what direction in which they want to take the group, but we are happy to facilitate the conversation and to offer a very candid opinion of whether we think the group is ready for strategic planning. And certainly if they are, we're happy to facilitate that process. And if they're not, we're happy to offer them best practices and recommendations on developing a governance model.

Brian: I think it's super important for the practice and those in it to understand they have a partner in SVMIC that is looking out for their interests, but yet they're not so closely associated with inside the practice they can be that outside party to help. That has got to be a benefit to those practices.

Steve: It is. We see groups that want to use their own practice executives, or even a member of their physician team to facilitate these retreats. And there are instances where that can be successful. The problem is that that individual always has his or her own opinions about what needs to be done as well about the other members. Allowing us to come in really puts an independent body in it.

Brian: Yes.

Steve: We're not there to make decisions, and we want the group to be what the group wants to be, so we're able to bring our knowledge of healthcare and offer, you know, expertise in that area, but we don't have a dog in the race.

Brian: Right.

Steve: As they say. So, wherever the group lands as long as they're happy we feel like we've brought value.

Brian: Right, and to be able to bring the facts in an unbiased way is going to really help, and when it comes to strategic planning what really is needed.

Steve: Absolutely.

Brian: If you have a group out there that maybe they have a governance model, they've tried to put one together, and it hasn't gone well, maybe they tried the organic way that we were talking about earlier and it just hasn't worked. If they want to improve that, certainly they can contact you guys and medical practice services who could assist them with that, but if they want to take something away from this podcast even get started before connecting with you, what would you suggest is basic 101 first steps to do that?

Steve: Getting started with governance really means a divine structure, so the first thing I would encourage the group to do is to look at their organizational bylaws. Who gets to make decisions? Do all the physicians have an equal vote? Does it require a simple majority? Does it require a super majority? Do they have officers? Do they have an executive committee? Do those individuals have job descriptions? It's really important that the physicians decide where the authority rests, and who has the authority? They have to decide how we make decisions. And then they have to among themselves agree that once we've made the decision, this is what we do. If we go into a meeting, and the vote is 7 to 6, well that's fine, but when we come out of the meeting it's 13 to 0.

Brian: Yes.

Steve: That is the best place to start. We have to get on the same page, and we have to support one another.

Brian: Well, that is very good sound advice. If people that are listening to this find themselves in this situation where they are needing to either set up a governance model, improve a governance model, or maybe even just set up and get assistance with strategic planning they can reach out and contact you, your team.

Steve: Just contact medical practice services and we'll put a consultant in touch with them, and go from there.

Brian: That sounds fantastic. Steve, I can't thank you enough for taking some time out of your incredibly busy day to discuss these important topics, which I know a lot of practices face out there. Thanks for joining us.

Steve: Oh, you're very welcome. Thank you for having me.

Speaker 1: Thank you for listening to this episode of Your Practice Made Perfect with your host, Brian Fortenberry. Listen to more episodes, subscribe to the podcast, and find show notes at svmic.com/podcast.

The contents of this podcast are intended for informational purposes only and do not constitute legal advice. Policyholders are urged to consult with their personal attorney for legal advice as specific legal requirements may vary from state to state and change over time.