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Integrated Governance & Management: Integrated Governance & Management: A Leadership Challenge! A Leadership Challenge! Presented by: Presented by: Marc D. Halley, MBA Chairman and CEO The Halley Consulting Group, Inc. Percival Kane, MHA SVP & Network Administrator North Oaks Physician Group Healthcare Financial Management Association Region 5 February 20, 2015

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1. Integrated Governance & Management:Integrated Governance & Management: A Leadership Challenge!A Leadership Challenge! Presented by:Presented by: Marc D. Halley, MBA Chairman and CEO The Halley Consulting Group, Inc. Percival Kane, MHA SVP & Network Administrator North Oaks Physician Group Healthcare Financial Management Association Region 5 February 20, 2015 2. Discussion Topics I. Our Business Imperatives II. The Physician Integration Continuum III. The Critical Role of Governance IV. Management Styles and Power Bases V. Vertical Governance: The Council Model VI. Horizontal Governance VII. Q&A 2 3. Our Business Imperatives 4. Strategic Imperatives Organizations Must Do These Things 4 5. The Concept of Value 5 Clinical Process Clinical Outcome Patient Experience Effective Cost Per Unit Utilization Efficient 6. The Physician Integration Continuum 7. Common Integration Options (Multiple Plugs) Integration Sustainability/ Infrastructure Medical Staff PHO/IP A Medical Directorships/ Co-management Joint Venture Independent Contractor/ PSA/SBS Employee H HL Halley, Marc D. 2011. Owning Medical Practices: Best Practices for Sustainable Results. Chicago, IL: AHA Press. 67. 7 8. Physician Integration Economics Fee for Service 8 Capture & Retain Market Share Hospital Capital Generator Capital Preservation & Investment Market Manager Prim ary C are Subspecialt y Physicians Potential Capital Loss Potential Capital Drain Potential Capital Drain Referral Path 8 2008 The Halley Consulting Group, LLC Halley, Marc D. 2011. Owning Medical Practices: Best Practices for Sustainable Results. Chicago, IL: AHA Press. 10. 9. Physician Integration Economics Risk Payment Model Panel Size Access Time & Materials Hospital Risk Pool Capital Potential Capital Preservation & Investment Market Manager Prim ary C are Specialty Physician s Potential Capital Loss Potential Capital Drain Potential Capital Drain Referral Path 9 2008 The Halley Consulting Group, LLC Halley, Marc D. 2011. Owning Medical Practices: Best Practices for Sustainable Results. Chicago, IL: AHA Press. 10. 10. Moving Up the Integration Pyramid Population-centered care Personal accountability for healthy behaviors and lifestyle Population health management Chronic disease prevention & management Access and information = value Risk-based payment Choreographed care (Accountability) Improving process and outcomes Clinical quality commitments Transparent flow of clinical information across care continuum Managing an episode of care or chronic disease using clinical metrics Individual and joint accountability to live by established metrics Collaborative care (Trust) PCMH & Choice Initiatives Vital behaviors (We/Our) Service quality extension of referring providers office Information lubricates the Referral Path Referral management Coordinated care (Silos) Basic form of integration Legal structure/Organization chart Payroll silos (Me/You) Referral leakage 10 2013 The Halley Consulting Group, Inc. 11. The Critical Role of Governance 12. Fiduciary and Operational Governance Select and evaluate the chief executive Enterprise vision & strategies Capital formation and allocation Mergers & acquisitions Regulatory compliance Enterprise financial & quality oversight Enterprise policy Etc. Sponsor, direct & oversee implementation Operating policies, procedures Performance improvement tactics and timing Key stakeholder engagement Performance accountability 12 13. Vertical Governance (Formal Authority or Authorization) 13 Owners Or Fiduciaries Employees Management 14. Horizontal Governance (Common Consent) (* Potential future members) Service Line Council (SLC) Clinical Process Teams (CPT) (Functional Integration) (Clinical Integration) 14 2014 The Halley Consulting Group, Inc. 15. Management Styles and Power Bases 16. Knowledge Workers Own the means of production unique knowledge and practiced skill Highly mobile Independent judgment (professional) Need tools of production capital investment Exceptional clinical opportunities = loyalty Compensation hygiene factor Define their own level of contribution Cannot be supervised effectively Adapted from: Drucker, P. 1998. Peter Drucker on the Profession of Management. Boston: Harvard Business School Publishing. 122-124. 16 17. 17 Power Bases Legal Power: official authority & position Expert Power: knowledge, ability, information Reverent Power: respect, personality, charisma Reward Power: ability to give or withhold incentives, capital, etc. Punitive Power: impose penalties 18. 18 Gilson Leadership Scale Ways Leaders Make Decisions Tell: Identify the problem, discern the alternatives and make the decision Persuade: Add sell to above Discuss: Identify the problem, discern the alternatives, propose a tentative solution, gather input from those who will need to implement the solution, make the final decision Consult: Present the problem and background to the group, solicit alternative ideas and solutions from the group, leader makes the final decision 19. 19 Gilson Leadership Scale (Continued) Ways Leaders Make Decisions Join: Manager participates as a member of the group in identifying the problem and alternatives, while agreeing, in advance, to carry out the decision of the group 20. 20 Matching Leadership Styles and Power Bases Tell Legal, Expert, Punitive Persuade Reverent, Reward Discuss Reverent, Reward Consult Expert, Reverent Join Expert, Reverent 21. The Council Model: Partnership Led 22. Network Operations Council (NOC) Composition Physician Chair Physician representation from Primary Care Clinics, Medical Specialty Clinics, Surgical Specialty Clinics & Hospital-based Services Executive Team representation: Executive VP/COO, SVP/Chief Legal Officer, SVP/CFO, SVP/CMO & SVP/Network Executive Purpose Provide governance for overall physician network Determine the strategic direction of the physician network Make clinical/quality, operational, financial, strategic & policy decisions globally for the physician network Value Decision-making forum for the entire physician network that inherently has credibility & buy-in from other network providers Tools Agenda comprised of standing reports from subcommittee chairs & SVP/Network Executive, a review of monthly financial performance & new business. Supporting information: dashboards, Net 1, Net 2 Financials, action plans, policies, etc. 22 Network Operations Council Practice Operations Council 23. Practice Operations Council (POC) Composition Physicians within the practice Mid-level providers within the practice Practice Leadership Team: Practice Manager, Supervisor, Regional Director & SVP/Network Executive Purpose Provide governance for the practice Determine the strategic direction of the practice Determine how to adopt & execute NOC-approved directives Make clinical/quality, operational, financial & strategic decisions for the practice Value Provider engagement with decision-making for the operations of the practice Provider awareness: operations, policies, performance, initiatives, challenges, etc. Accountability Tools Site-Specific Action Plans Net 1, Net 2 Financials Supporting materials: dashboards, policies, presentations, etc. 23 Network Operations Council Practice Operations Council 24. Network Operations Council Subcommittees 24 25. The Extension of the Physician Governance Model into General Operations 25 North Oaks Physician Group Governance Structure 26. Horizontal Governance 27. The Limits of Pay for Performance Mind or heart? When you pay for everything you get, you get only what you pay for From incentive to entitlement Upping the ante Stifles innovation 27 28. Horizontal Integration A common interest Chronic disease Episode of care Referrals Clear and compelling vision Common cause is the glue An offer too good to refuse Overcomes tactical disagreement 28 29. Horizontal Integration Shared tenets (ground rules) Clinical quality Service quality Productivity Collaboration Cost per unit Process efficiency Utilization Financial viability 29 30. Horizontal Integration Working together Individual roles Shared commitments* Performance targets Performance management Individual accountability Joint accountability Appropriate incentives/rewards 30 31. Shared Commitments N,W,Ps Needs (clinical) Wants (preferences) Priorities (constraints) Written Service Commitments Extension of PCP Referring physicians/providers/staff Their patients 31 32. Shared Commitments Clinical integration Chronic Complex Chronic Episode of Care Clinical protocols/processes Clinical Management Teams Care Management Teams Standards of care Best practices 32 33. Shared Commitments Certification Clinical outcomes Effectiveness Efficiency Critical nature of self-reporting 33 34. Questions and Answers 34