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Integrating acquired physician practices.

The managed care environment has created a new set of pressures on health care organizations. This dramatic change has resulted in an unprecedented focus of prevention and care management, rather than treating individual disease episodes. Primary care doctors have become the focal point, because they are the clinical decision-makers of these preventive and care management realms.

In response to these changes, many health care organizations have begun to employ primary care physicians. This has created a significant management challenge, as many of these physicians come from private practice, solo, and small group backgrounds and are extremely independent. Physicians often do not readily understand accountability for an organization's performance, and they are unwilling to relinquish authority over the way their offices are operated and how they command their staff.(1) On the positive side, their entrepreneurial nature has produced a strong work ethic and commitment to clinical quality - attributes essential to the success of an integrated system. The challenge to health care executives is to maintain individual physicians' feelings of autonomy, but get them to row in the same direction as the rest of the health system.

Many strategies have been suggested to accomplish successful physician integration,including stock ownership in a for-profit entity created by the health system, sharing in the cost efficiencies caused by changing practice patterns, and compensation attached to service and access standards. One thing that executives overlook goes beyond financial concerns and yet hits at the heart of what is important to most physicians: That is maintaining their ability to make decisions regarding their own practice environment, both clinically and administratively.

United Health has developed a physician-administrator team model to enhance the physician integration process. Once a practice acquisition is completed, the health system's lead physician executive and the lead practice administrator set up a series of meetings with the acquired group. In the first meeting, the group and the executives collaboratively agree on who the physician leader of the practice should be. This individual is chosen based on a list of criteria established by a task force with representation from all the acquired practices (see Table 1). A consensus is reached between the health system executives and the physician group as to who would be the best person for the job of physician leader using these criteria. The physician may or may not be the practice's previous leader. (The practice administration leader is usually the group's previous administrator, and most physicians feel comfortable starting at that point.)
 TABLE 1 Effective leadership skills

Criteria Necessary for Criteria Necessary for Effective
Effective Physician Leadership Administrative Leadership

1. Leadership skills The skills and traits described in the
2. High Integrity/Honesty physician leader criteria list,
 as well as:
3. Enthusiastic
4. Facilitator 1. Expert managerial skills
5. Good Communicator 2. Teacher
6. Visionary
7. Empathetic
8. Fair
9. Respected Clinically
10. Sense of TQI
11. Team Player
12. Genuine Desire to Serve
13. Willing to Commit Time
14. Organized
15. Conflict Resolution Skills

The physician leader and manager are then appointed to the Employed Physician Council, comprising leaders from all the employed practices. The council has authority over all system-wide initiatives for the medical group, including compensation, service and access standards, capital expenditures, etc.

Once there is agreement on the physician and administrative leader, then the real work begins. The health system executives begin a meeting process with each physician leader and practice administrator. This is usually facilitated by a member of the organizational development staff. The first one or two meetings is spent getting the issues, fears, and "baggage" out in the open. This is the point when most of the physician leaders begin to express the fear of many group members. Their emotional responses to the new world of employment are often expressed as issues of control. For example, details for policies regarding staff hiring/firing take on heightened importance. There is always apprehension that the system's health care executives will control all decisions. The purpose of the first set of meetings is to build trust and to open communication channels. Once a relationship has been established, it is possible to proceed with defining roles and responsibilities (see Table 2).
Physician Leader Responsibilities

1. Provide physician leadership/
management for the clinic.
2. Assist administrator in major
management decisions.
3. Ensure patient care quality
improvement at the clinic
4. Serve as liaison between the
clinic, the health system, other
employed practices, hospitals,
and the community.
5. Implement new clinical programs.
6. Serve as managerial lead in performance
planning and appraisal
process of colleague physicians
and nurse practitioner.

Administrator Leader

1. Provide administrative leadership.
2. Initiate long-range planning for
operational issues.
3. Provide day-to-day management
of administrative functions, such
as operations, reimbursement
into compensation, marketing,
human resources, and finance,
and serve as primary leader in
performance planning and
appraisal process of staff.
4. Decision-making and
administrative functions.
5. Serve as coordinator/leader within
an entire system, as needed/
6. Accountable to health system

Joint Responsibilities of Physician
Leader and Administrator

1. Manage clinic finances and communicate
priority action to meet
2. Accountable to health system
and the community for the
performance of the clinic.
3. Work with the senior executives
of the health system and
physician council to set priorities
for leadership team.
4. Develop strategies and
operational plans to accomplish
the vision and establish priorities.
5. Accountable to the community
and to the clinic.
6. Assure appropriate use of health
system resources for solving
7. Co-chair leadership of physician
team meetings.
8. Assist with cultural alignment of
practice with the health system.

- Example of roles and responsibilities list generated
by a physician leader and practice administrator
working with senior executives of an
integrated health system.

Because most physicians are used to being their own boss and because most practice administrators are used to being told what to do by physicians, this can be a painstaking process. Physician leaders usually start from the vantage point that they are advocates for their physician partners, not actually their partner's boss. They see their responsibility as only to act as a communications conduit. As the discussions continue, the health care executives explain that belonging to a larger organization means that there must be accountabilities. It becomes clear to the physician leaders that it is better to have these accountabilities resting in their group. The next logical step follows that a decentralized management philosophy is preferable.

Decentralization, however, requires physician leaders to assume accountability. Generally, by the end of the discussion, they have agreed to accept responsibility for physician performance planning, implementing clinical protocols, and teaming with the practice manager for the group's operational and financial results. The manager is usually freed from the boss-subordinate relationship and allowed to be the practice administrative leader. Primary responsibilities of the practice manager agreed upon by most groups going through this process are what we might expect, including day-to-day management of administrative functions, such as operations, salaries, marketing, human resources, finance, and performance planning for nonphysician staff. All roles need to be, in written format by the end of these sessions. Otherwise, the physicians tend to slide back into their previous private practice behavior of telling the manager what to do, or vetoing his

These sessions are critical to ensuring the practice's long-term success. The physician leader-administrative leader team begin to work together to develop the strategic plan for its group, to manage the clinic finances, and to meet budgets. Both leaders have the responsibility of ensuring cultural alignment with the larger system, but can maintain the individual identity of their group practice at the same time.

By pushing down most decisions to these teams, we preserve the positive aspects of the independent nature of our physicians, while still getting them to "system think" when they come together at the Employed Physician Council meetings. For most physicians, this feels like business-as-usual with the larger system there to support them, not hinder their progress.


(1.) Raelin, J. A. The Clash of Cultures: Managers Managing Professionals. Boston, MA: Harvard Business School Press, 1991. p. 53.
COPYRIGHT 1996 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Article Details
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Author:Correia, Kathryn
Publication:Physician Executive
Date:Oct 1, 1996
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