Best Practices

How to diffuse the group-practice time bomb

Some basic strategies to save your practice from explosion.

By Richard C. Koval, MPA, CMPE

The Wondercare Eye Clinic was a 10-partner ophthalmic practice that had served its community for more than 70 years when it suddenly closed, leaving many in the community to wonder what happened. Some of the partners left town, one returned to academia, others opened solo practices down the street, and all agreed that they intended to have nothing to do with a group practice ever again.

What had caused this seemingly spontaneous destruction of a longstanding and well-respected medical practice? The post mortem revealed several relevant issues as described below, along with suggestions for avoiding such problems.

ANATOMY OF A DISASTER

Dr. Wonder was the president of the group, having acquired the position by birthright as the son of the practice founder. He prided himself on his business acumen and most of the group members ceded responsibility to him for operational issues. But he was averse to confrontation and consistently allowed issues to fester, hoping problems would go away on their own.

• Develop effective group leadership. In many practices, leadership is determined by decree (“I founded the place and I will run things”); by default (“you don’t have time or interest to do it, so I will”); or by indifference (“I’ll just keep doing whatever we’ve been doing”). Those arrangements can sometimes work but too often leave the organization lacking direction and discipline. Leaders should have credibility within the group, demonstrate good judgment and listening skills, and have the ability to persuade others when consensus is needed. Where possible, leadership opportunities should rotate among group members.

Since most of the partners were indifferent to business operations, few discussions occurred beyond occasional consultations on patient care. Dr. Wonder communicated with others on an “as-needed” basis but felt the operational issues of the practice were of no one else’s concern. When rumors arose that the practice’s finances were in peril, he assured each partner in individual conversations that there was nothing to worry about.

• Maintain consistent and effective communication. Nature abhors a vacuum and human nature is similar, constructing certain “facts” when information is lacking. This creates misunderstanding, worry and distrust as group members form opinions around whatever happens to grind in the rumor mill. Members should be informed of all major issues under consideration. The physician leader can do this through board meeting minutes, e-mail, or regular meetings. Communication should work both ways, with leadership soliciting opinions and suggestions from colleagues in the process of making their decisions.

TENSIONS RISE …

Wanting to address the financial rumors, several group members began pressing for review by an outside auditor, but the group deadlocked on the idea. One side felt the others were exaggerating the financial situation, while the so-called exaggerators viewed their partners as having their heads in the sand.

• Have clear processes in place for dispute resolution. When inevitable disagreements arise, the organization should have clear means for resolving them. Practice documents should define which matters can be decided by the managing physician alone, by a majority vote of the co-owners and by unanimous consent. An appeal process should be included.

Back at Wondercare, a younger member grew frustrated with the impasse and began recruiting others to his cause, engaging in heated and uncomfortable confrontations with the more passive partners over their reticence to act. Resentment grew as the physicians began to choose sides.

• Establish appropriate behavioral norms. The group should establish clear standards for member behavior in the face of disagreements. The resolution process should specifically prohibit ad hominem attacks, threats, retribution, manipulation or other means that are harmful to the group and its decision-making process. Group leadership should ensure respectful discussion of differences and encourage members to consider issues with appropriate perspective for others’ views. Persistent problems with specific group members may prove sufficient to consider transition of the individual out of the group altogether; a chronic malcontent can be poisonous to the organization and no step short of departure may prove adequate as a remedy.

In Wondercare, as the physicians’ opinions hardened, the group devolved into those who hid in their offices and those who sought them out for further arm-twisting. Many began to shorten their office schedules as the environment became increasingly hostile.

• Reinforce collegiality. Physicians who feel they are practicing with friends will be far less likely to have disagreements escalate into major problems. Although social engagements should not be forced, group members should strive to associate informally, whether in the form of regular casual lunch meetings, annual planning retreats, family events or other activities of common interest. Relationships are likely to be strained when the sole interaction between individuals is based on esoteric patient-care discussions and physician meetings.

... THEN IGNITE

Several of the younger doctors were especially vocal about their dissatisfaction, noting they had a number of alternatives available that would provide better compensation compared to Wondercare. The older physicians began to resent the younger doctors’ emphasis on money over “the team” and the constant threats of departure.

• Seek group-oriented individuals as group members. The recruitment process for new physicians should emphasize those who appreciate the dynamic available in a group and the value of having colleagues. Ideal candidates should have minimal ego, show a history of being easy to work with, understand the need for compromise, have minimal motivation to always win, be realistic about the pluses and minuses of group practice, and have personal ethics consistent with those of other group members. Obviously, a group cannot solve an immediate issue of dissention by replacing its dissonant members, but a consistent investment in candidates who have group-oriented personalities can create a valuable future return by reducing prospects for future disagreements.

When the first two Wondercare physicians left, both of them high-producing subspecialists, some of the survivors thought “good riddance.” However, that revenue loss, coupled with lax management by Dr. Wonder, soon created a financial crisis that proved insurmountable. The final day was tear-filled as doctors and staff remembered the days when everyone was happy and didn’t need lawyers to communicate for them.

Disagreements will occasionally arise in any group. The challenge is to ensure that key elements are in place to protect the practice from destroying itself. Wondercare’s experience may be extreme, but each group practice has the potential to fail if leadership does not take appropriate precautions. As is often the case, prevention is far easier than recovery. OM

Richard C. Koval, MPA, CMPE is a principal and senior consultant with BSM Consulting, an internationally recognized health care consulting firm headquartered in Incline Village, Nevada and Scottsdale, Arizona. For more information about the author, BSM Consulting, or content/resources discussed in this article, please visit www.BSMconsulting.com.