Transparency and the Medicare Physician Data Controversy

On April 9, both the Wall Street Journal and the New York Times made waves with articles on transparency and Medicare.

Here’s the NYT:

A tiny fraction of the 880,000 doctors and other health care providers who take Medicare accounted for nearly a quarter of the roughly $77 billion paid out to them under the federal program, receiving millions of dollars each in some cases in a single year, according to the most detailed data ever released in Medicare’s nearly 50-year history.

And here’s the WSJ:

The top 1% of 825,000 individual medical providers accounted for 14% of the $77 billion in billing recorded in the data.

The long-awaited data reveal for the first time how individual medical providers treat America’s seniors—and, in some cases, may enrich themselves in the process. Still, there are gaps in the records released by the U.S. about physicians’ practice patterns, and doctors’ groups said the release of such data leaves innocent physicians open to unfair criticism.

The impact on the healthcare industry will be felt for years to come. In fact, we can predict that, in all likelihood, this represents a game changer for the industry:

Fraud investigators, health insurance plans, researchers and others will spend weeks poring over the information about how many tests were ordered and procedures performed for every provider who received Medicare payments under Part B, which excludes payments to hospitals and other institutions. The Centers for Medicare and Medicaid Services is making the data publicly available on Wednesday. While total Medicare spending — including hospitals, doctors and drugs — is approaching $600 billion a year, payments to individual doctors have long been shrouded in secrecy. For decades, the American Medical Association, the powerful doctors’ group, and others have blocked the release of the information, citing privacy concerns and the potential for misuse of the information. But a federal judge ruled last year that the information could be made public.

According to The New York Times,  2 percent of doctors account for about $15 billion in Medicare payments, roughly a quarter of the total.

And the best paid specialties are as follows:

The American Medical Association, which chose not to try to block the release of the information, questions the “usefulness of these payments to assess doctors.” Dr. Ardis Dee Hoven, AMA president asserts: “It’s raw claims data. This gives us no window into quality or anything of that nature.” While patients may know who performs a high number of procedures, like hip replacements, for example, they will not be able to tell anything about whether the patients needed the surgery or whether they benefited from the surgery.”

According to the reports, Dr. Hoven also cautions that doctors were not able to review the data, and some of the information being made public could be wrong. Specifically, the AMA points out several reasons why the data should not be taken too literally:

Data being released may contain errors because there is currently no mechanism for physicians and other providers to review and correct their information.

The data does not include explicit information on quality of care provided or quality measurement. It solely focuses on payment and utilization of services so it cannot be used to evaluate the value of care provided.

Number of Services
Residents, physician assistants, nurse practitioners and others under a physician’s supervision can all file claims under that physician’s National Provider Identifier (NPI); the data may not properly detail the services performed and who performed them. Additionally, there are several instances in which it can appear that two surgical procedures were done when in fact there was only one. For example, when there are co-surgeons or an assistant at surgery, the procedure should be counted as only one surgery, not two.

Charges vs. Payment
Medicare and other payers pay fixed prices for services based on fee schedules; therefore the amount paid to physicians is generally far less than what was charged and is not an accurate portrayal of payment.

Patient Population
The data being released is an incomplete representation of the services physicians provide, as it is not risk adjusted. Additionally, it does not include care for private insurance patients or Medicaid beneficiaries, making it a limited view of the patients a physician cares for.

Site of Service
Payment amounts vary based on where the service was provided. To reflect a difference in practice costs, Medicare pays physicians less for services provided in a hospital outpatient department than for services in the physician’s office.  However, for services in the outpatient department, another payment is made to the facility to cover its practice costs so that, in reality, the total costs to Medicare and to the patient may be higher when a service is provided in a facility setting.

Provider Comparisons
There is a lack of specificity in specialty descriptions and practice types in the data, which could be misleading when making comparisons between physicians. In some cases, physicians who appear to have the same specialty can serve very different types of patients, thus impacting the mix of services provided.

Missing Information
The data does not account for patient mix and demographics or drug and supply costs.

Coding and Billing Changes
Any analysis using the data should take into account changes in Medicare’s coding and billing rules that may be different over time and across regions of the country (e.g., local coverage determinations).

What does this mean going forward?  This is a time for leadership.

A few thoughts:

We have a choice: we can react or we can lead. Transparency is here to stay. The healthcare industry is going to have to prepare itself to face radical transparency the likes of which it has not faced before.  Like other industries that were transformed because of transparency, we can expect more of this in our industry. It will be best to not fight it, but rather to champion it. Physician leaders will work hard to demonstrate the entire value equation, not just focusing on costs, but showing outcomes and lifetime value.

Leading institutions including the AMA and AMGA must get better at creating self-regulating metrics and benchmarks that are meaningful in terms of outcomes, not merely costs. This is a key flaw in the current measurement regime.

Physician leaders must embrace and lead the focus on value delivery. As we pointed out in a previous blog post, achieving high value for patients must become the overarching goal of health care delivery, with value defined as the health outcomes achieved per dollar spent.

The Rx is Physician Leadership. In the words of Harry Truman – “Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.”

The Leadership Challenge: Deloitte’s Global Human Capital Trends 2014

Deloitte’s Global Human Capital Trends 2014** gives us some understanding of the magnitude of the leadership challenge faced by businesses around the globe. The survey includes responses from 2,532 business and HR leaders in 94 countries around the world. It is one of the largest global surveys of its kind.  The top findings were as follows:

Interestingly, across all respondents, companies cite four issues as the most urgent:

1) leadership,

2) retention and engagement,

3) the reskilling of HR, and

4) talent acquisition and access.

The survey also reveals that building leadership capabilities is by far the most urgent issue: 38 percent of all respondents rated it “urgent.”

Companies see the need for leadership at all levels, in all geographies, and across all functional areas. This continuous need for new and better leaders has accelerated. In a world where knowledge doubles every year and skills have a half-life of 2.5 to 5 years, leaders need constant development.

Unfortunately, most companies don’t have the “readiness” to meet the challenge.  In our experience, we find that many of the traditional executive education leadership programs fall short as well – particularly in domains such as healthcare.

Furthermore, the report tells us where leadership development programs fall short:

While these are not necessarily new findings, what is startling is how traditional leadership development programs have failed to keep up with the needs of the business community.

At the Physician Leadership Institute, we have a track record for encouraging physician leadership through action.  In fact, our curriculum includes action projects (experiential and role-based) that tackle specific challenges the organization is facing as part of the leadership development program.  The result?  Instant impact on business performance and quality of experience.  We achieve alignment, not on paper, but in the behavior and mindset of employees at all levels.

** Download the report from Deloitte here >>

From Individual Practice to Network: The Shift to Collaboration

Today’s newspapers are filled healthcare stories with viewpoints of all stripes. The New York Times recently ran a story - New Law’s Demands on Doctors Have Many Seeking a Network – describing the challenges faced by two doctors from opposite sides of the primary care system.

Dr. Sven Jonsson is “seeing a steady tide of new patients under President Obama’s health care law, the Affordable Care Act. And so far, it is working out for him. His employer, a big hospital system, provides expensive equipment, takes care of bureaucratic chores and has buffered him from the turmoil of his rapidly changing business.”

Dr. Tracy Ragland is an independent primary care physician in an affluent suburb. According to the article, “She cherishes the autonomy of private practice and speaks darkly of the rush of independent physicians into hospital networks, which she sees as growing monopolies.”

What matters is that business has changed for both physicians.  The American Medical Association reports that only about 40 percent of family doctors and pediatricians remain independent.  For the curious, here’s the distribution of ownership:

Another report on practice characteristics released by the American Academy of Family Physicians (AAFP) showed that as of the end of 2011, 60% of physicians who were active AAFP members were fully employed by hospitals or health systems, physician groups, or university-owned clinics or hospitals, while 35% were sole or partial owners of their practices. Search firm Merritt Hawkins reported that in 2010-11, 56% of its physician search assignments were for hospital positions, up from 23% in 2005-06, and the percentage may be higher now.

The trends driving this shift in practice models include the top five issues affecting physicians in 2013 identified by the Physicians Foundation:

1) ongoing uncertainty over the ACA,
2) consolidation,
3) the introduction of millions of newly-insured patients,
4) erosion of physician autonomy, and
5) growing administrative burdens.

Bottom line, hospital systems are growing, with younger physicians joining at ever higher rates. And the smaller, independent practitioners are joining larger groups or independent practice associations (IPA).

In our work, we find that collaboration does not happen without alignment. And for alignment, we have to examine the dominant cultures at work. The chart below illustrates three distinct cultures in the system:

In our work through the Physician Leadership Institute, we find that alignment must be based on shared values. How do we produce that alignment?  What people don’t realize is the vast differences between collective and expert cultures leads to tension, conflict and stress especially if we lack alignment and purpose.  Most healthcare professionals are acclimated to a collective culture, whereas physicians belong to an expert culture.* In the former category are such professionals as nurses, therapists, administrators, and support staff. These professionals usually work in groups, tend to avoid conflict, and are not high risk-takers. Physicians, in contrast, tend to be individualistic risk-takers who prize their autonomy. Outside of patient care, they are more likely to be motivated by self-interest than by group values.*

The underlying factor in navigating through change in healthcare is to understand and bridge the differences between the expert culture and the collective culture through alignment.

How may we foster a culture that is less hierarchical and more patient-centric?
How may we build a cross-functional understanding across departments?
How may we understand what it means to be accountable to each other, as well as the patient?

We’ll discuss leadership and accountability in a future blog post.

Leading Transformational Change: The Physician-Executive Partnership Thomas A. Atchison and Joseph S. Bujak MD.

Physician Leadership: An Interview with Ed Lopez

An ‘82 graduate of the University of Washington School of Medicine’s Physician Assistant program, Ed Lopez later completed his formal Internship and residency in General and Specialty surgery at the Albert Einstein College of Medicine and Montefiore affiliated Hospitals in New York City. After 17 years in private Cardiothoracic surgery practice and later as a co-founder of one of the largest private Hospitalist programs in the country, Ed returned to business school completing his studies in professional medical management and healthcare policy at the University of Washington and the Harvard Kennedy School in Cambridge, Mass. Today as an Assistant Medical Director for a large healthcare system in the West, Ed is also a recent graduate of the Physician Leadership Institute’s program in Leadership sponsored by The Center for Transformation and Innovation and the Catholic Health Initiative, Ed has dedicated his efforts to mentoring, teaching and supporting young Physicians to become the leaders of today and tomorrow in making the U.S. healthcare system the finest in the world.

In your practice, how do you define physician leadership?

I’ve done over 30 years in healthcare and over 20 of those years in staffing, managing physician practices, helping hospitals get the right contract surgeons, turning around failing practices and leading lean and process improvement projects in and out of hospitals . Those 30 years has shown me that physicians are primarily technical experts, and frequently were never taught how to understand, empathize and motivate others. College & Medical School was geared to a system of identifying high achieving individuals who by themselves could handle the most intense and arduous of demanding professions. And once the individual excellence was identified, they were often the most singly rewarded.

Most physicians were never formally taught to lead teams or performance groups when they completed their training. Remember, we were training scientists, with the manual skills of DaVinci and the brilliance of Einstein. In fact, most once finishing training went into a practice and hired the talent that did that “organizational and management stuff ” while they dedicated themselves to practicing the “art and the science of medicine.”

But that was yesterday’s model physician.

Today the need for physician leadership has never been more pronounced. As the 21st Century healthcare culture and process of care delivery has changed, it has been wandering in the desert of darkness, looking for true leadership. And as we have seen when there is a void in leadership, there is never a shortage of politicians, policymakers, MBA’s, economists, and well intended do-gooders filling that void. But for healthcare, it is not enough for physicians to be mere participants in the new system. Today the demand and the stakes are so high, that ONLY the well trained and well tuned physician leader can lead us through this healthcare change process successfully.

When did you first realize the need for physician leadership in the workplace?

I’ve been a big fan of Daniel Goleman and his concepts of emotional intelligence from the very beginning – for almost 20 years. But here’s when it struck me in a way that could not be denied. I had gone back to grad school for a policy class – at the Kennedy School at Harvard – where at least one-third of my class was comprised of physicians, lawyers and policy makers from the rest of the world. I noticed that the behavior of the US doctors was unique. We were technocrats, but not people or team leaders. The others were not just physicians in the office or the hospital. Rather, they were spiritual, community leaders as well. They were most often an integral part of the network of their community – not only as “medical healers” but they were also looked upon as social leaders who were involved in every aspect of their cultures. We, as healthcare delivery providers/physicians in the US, pride ourselves as specialists, sub-specialists, and so have compartmentalized our profession that we have little to no say in our society anymore. We are looked upon as mere workers in the vast network of skilled professionals with no voice in the shaping of the future of our new healthcare culture. It was then that I realized that the physicians in this country were in trouble.

What happened? How did you go back to work, and what were you thinking?

When I went back and started talking to my colleagues, they had never thought about it as I did. Most didn’t care, as long as they were getting paid handsomely. The mindset was something like – “I’m responsible for hip surgeries. That’s what I do, I do it well, I have a great referral base so I’m fine thank you very much. Don’t bother me with this touchy-feely political stuff.”

The result of the isolationist-specialist mindset is what you see in healthcare today. In the late 90s we saw fresh-faced MBAs with no medical experience come into our healthcare systems and start dictating how business was to be run. Even then, the standard response was: “as long as they leave me alone to do my job, and I get paid well, I won’t get involved.”

So healthcare issues have built up over time…

Sure, the history of our profession will show that until very recently, physicians had abdicated their responsibilities. Perhaps not intentionally, but systemically. And in the mid 2000s, not only did physicians lose their say in healthcare, but they were at the mercy of a system that did not put the patient first. The few physicians who were in administrative positions were window dressing. They’d go to meetings and “participate” – not as physicians, but as cogs in the wheel. Physician leadership was non-existent. Unfortunately they were neither physicians, nor leaders but mere participants in the vast healthcare machine . Some of us were thinking: “What have we created?”

That sounds bleak. Are things changing? Are physicians getting back into the game?

Thank God things are changing. Today Physicians are recognizing that there is a dearth of physician leadership at almost every level. The physician leader must understand today how the business works, what the outcomes are, how to lead and inspire teams, and fix problems – all from the perspective of the patient. The government has stepped in as well – forcing the hospital systems to measure outcomes not just costs. This is changing the business dynamic by forcing a sense of accountability for all of us – Doctor, Patient, payor, administration. We ALL now own this thing called the American Healthcare system – You can run but you can’t hide.

To compete, our medical practices must nurture real, authentic physician leaders. Men and women who understand that before we can lead others, we must search our souls and learn to lead ourselves in order to become the leaders we need to be. Leaders must inspire followers through servant leadership – by example and by service. No job is too small or too insignificant when it comes to the patient experience.

Can you give us an example?

There was a rural hospital with 25 beds that was a challenge because it was underperforming at nearly every metric used to measure performance.

The difference was physician leadership. We handpicked the physicians with the right emotional intelligence, with the leadership skills to succeed. Two of the physicians were new grads, another was a veteran, very discouraged and near the end of his career. We asked them if they wanted to make difference. The veteran got behind us when he understood that this is why he had gone to medical school all those years ago. The right people make all the difference, and this case was no different.

Today that hospital is the crown jewel in a 7-hospital system. We are getting results – focusing on outcomes and profitability. Morale is high, and our patients love us.

You ask for a personal commitment from your physicians?

Absolutely yes. My commitment is to do the right thing to help the patients and their families receive the finest experience they can have. No detail is too small. And we teach this to all – from the physician to the janitor. If a patient needs something, we do our best to get it for them. We tell them: “If anything isn’t working for you, please let us know, so we can help.”

There is science behind this. When a patient experiences a feeling of trust and faith, endorphins kick in, and they begin their journey of healing with a positive frame of mind.

Look at what the patient experience is like in a typical hospital. The first thing we do is ask the patient to take off their clothes, wrap them in a piece of cloth and call it a gown with their butts hanging out. Strangers walking in and out of their rooms at all times of the day and night without a sense of privacy. They ultimately feel humiliated, confused, and afraid and yet we expect them to then when asked, to give that hospital a glowing rating when HCAHP scores come a calling. Is that any way to treat the patient?

Patients want and they deserve to receive the best service in town while they are sick and hurting. The experience for the patient must be one they will feel comfortable with. We try to make it as much like a home as possible.

The patient experience is all-important?

It’s everything. At our facility we have built a collaborative care model, with the patient at the center. On daily rounds, physicians visit with all members of the staff who interact with the patients – nurses, therapists, discharge personnel, house-keeping – to ensure that we are all on the same page and understand the needs of the individual patient. No task is beneath anyone. We are butlers, servants, here to serve the patient. Not pamper them, but give them the respect they deserve. Humility is expected from all.

And the end result is patient satisfaction. Our patients ask to come back to us, because they trust us.

This, by the way, is the best way to maximize shareholder value. By focusing on the best outcomes for our patients with results-driven leadership, that’s physician leadership in my book.

I have tried to live by and gain strength from an adage by Lao Tzu: “A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say, we did it ourselves.”

2014: Priorities for the Healthcare Industry

A recent article* in strategy + business tells us that the two broad priorities for 2014 are consumerization and bundled care.

Consumerization describes the transformation of an industry from a primarily business-to-business (B2B) enterprise to one that focuses on business-to-consumer (B2C) activities. In today’s B2B health marketplace, business is transacted among large employers, payors, providers, and pharmaceutical companies. The people being insured and treated have little involvement in or responsibility for their own care and cost choices. In the years ahead, healthcare will evolve into a B2C industry, in which consumers will take a much more active role in their healthcare decisions and expenditures. And, as a result, every healthcare company and organization will need to become more consumer-centric. The deck is being reshuffled, and there will be new winners and new losers, depending on how companies play their hand. **

Bundled care, is described as follows: a “bundle” is a procedure or service that includes every step of the process for a specific treatment, in one package, at a set price. Bundled knee replacements, for example, typically cost somewhere between US$20,000 and $30,000. There’s even a guarantee regarding results: If something goes wrong, the doctors fix it and don’t charge anything extra (unlike the current system, where a follow-up operation costs just as much as the first one). Conceptually, bundles are akin to switching from an à la carte menu to a prix fixe menu. They involve hospitals, doctors, employers, and insurers all working together to improve outcomes, reduce fragmentation, streamline care, and reduce costs, while making the entire experience more consumer-friendly. They typically work best for acute conditions that have fairly standard treatments—such as joint replacements or coronary surgery—because as those procedures are repeated over time, the providers can learn what works best and wring inefficiencies out of the process. ***

The challenge is not easy. According to the experts, “despite the promise of bundles, efforts to capitalize on these ideas so far have been limited to a few large employers and a handful of national name-brand hospitals—far short of what is required to truly transform healthcare. Over the next few years, the major challenge will be expanding the concept so that it covers a wider range of conditions and a broader demographic base: the “big middle” of patients and employers. Until most patients in most markets can receive bundled care for most of their needs, the strategy’s potential will remain untapped.”

I will add one more immediate priority that the consultants overlooked: physician engagement and alignment.

As we pointed out in a previous post, physician engagement is a major challenge for the healthcare industry. Furthermore, a lack of alignment between work and purpose is often a result of a cartesian split between analytic and social skills. A lack of shared values is behind some of the biggest challenges in organizations. It was the late W. Edwards Deming who stressed that “if you destroy the people of a company, you do not have much left.” Starting from the top, if leaders are not good at understanding others, they are likely to develop a strategy and expect everyone to get on board, without stopping to imagine how others may feel about that plan. In fact, just 30% of change initiatives succeed, according to 15 years of data from McKinsey. Social neuroscience tells us that “our organizational environments have systems and processes that nudge people to think rationally rather than socially. In the workplace, if you are in a mindset that discounts social cues, you are going to miss a lot of important information around you and a lot of opportunities for creative problem-solving. We end up thinking that a lot of problems have analytic solutions; you just have to crunch the right numbers. Yet many of the toughest business challenges require social solutions. What does the person, team, or whole organization need to feel good? People who feel good are generally more productive.”

A recent survey found that healthcare workers are the most stressed workers amongst all industries surveyed. Sixty-nine percent of healthcare workers feel stressed in their job, and 17 percent are “highly stressed,” according to The nationwide survey which was conducted from Nov. 6 to Dec. 2, 2013, and includes responses from 3,211 workers, including 450 full-time, private-sector healthcare employees.  The numbers tell us that there is a crisis in the healthcare workplace which if left un-adressed will seriously impact productivity and lead to a cycle-of-failure.

Without being dramatic, it is safe to say that the Rx for “all of the above” is Physician Leadership.

2014 Priorities for the Healthcare Industry, strategy + business, February 24, 2014
** Putting an I in Healthcarestrategy + business, May 28, 2013
*** Healthcare Shifts from à la Carte to Prix Fixestrategy + business, November 12, 2013

VIDEO: What it takes to be a great leader

Three questions:

Q1: Where are you looking to anticipate the next change to your business model or your life? The answer to this question is on your calendar. Who are you spending time with? On what topics? Where are you traveling? What are you reading? And then how are you distilling this into understanding potential discontinuities, and then making a decision to do something right now so that you’re prepared and ready? There’s a leadership team that does a practice where they bring together each member collecting, here are trends that impact me, here are trends that impact another team member, and they share these, and then make decisions, to course-correct a strategy or to anticipate a new move. Great leaders are not head-down. They see around corners, shaping their future, not just reacting to it.

Q2: What is the diversity measure of your personal and professional stakeholder network? You know, we hear often about good ol’ boy networks and they’re certainly alive and well in many institutions. But to some extent, we all have a network of people that we’re comfortable with. So this question is about your capacity to develop relationships with people that are very different than you. And those differences can be biological, physical, functional, political, cultural, socioeconomic. And yet, despite all these differences, they connect with you and they trust you enough to cooperate with you in achieving a shared goal. Great leaders understand that having a more diverse network is a source of pattern identification at greater levels and also of solutions, because you have people that are thinking differently than you are.

Q3: Are you courageous enough to abandon a practice that has made you successful in the past? There’s an expression: Go along to get along. But if you follow this advice, chances are as a leader, you’re going to keep doing what’s familiar and comfortable. Great leaders dare to be different. They don’t just talk about risk-taking, they actually do it. And one of the leaders shared with me the fact that the most impactful development comes when you are able to build the emotional stamina to withstand people telling you that your new idea is naïve or reckless or just plain stupid. Now interestingly, the people who will join you are not your usual suspects in your network. They’re often people that think differently and therefore are willing to join you in taking a courageous leap. And it’s a leap, not a step. More than traditional leadership programs, answering these three questions will determine your effectiveness as a 21st-century leader.


CVS Stops Tobacco Sales: Retail and the Consumerization of Healthcare

By now you have heard the news: CVS Caremark Corp announced that it would stop selling tobacco products at its 7,600 stores by October, becoming the first U.S. drugstore chain to take cigarettes off the shelf. The decision follows several recent indicators bolstering CVS Caremark’s position in the healthcare market. In December CVS said it expected its pharmacy benefit manager revenues to rise between 7.25 percent and 8.5 percent in 2014, easily outpacing growth of 2 percent to 3.25 percent in its retail business.

CVS and pharmaceutical distributor Cardinal Health Inc announced a 10-year agreement to form the largest generic drug sourcing operation in the United States. A month earlier it said it was buying Coram LLC, Apria Healthcare Group Inc’s specialty infusion services business unit.

In our strategy work with healthcare clients, we work on simulated scenarios of the future as a way of mapping the Terrain–Based Strategy. Two of these realistic scenarios are the consumerization of healthcare and retail healthcare. When these scenarios are discussed, we view them as both as opportunities and as threats. Players like CVS, Walgreen, Walmart and even Apple will continue to shift their business models to take a bite out of the 3 trillion dollar healthcare market.

The CVS announcement should be a surprise. It is an example of our simulated strategy models becoming more of a reality. This strategic shift is what we talked about in a previous blog post in which consumer engagement becomes a key wave of disruptive change >>

As the retail consumer market builds via public and private exchanges, consumers will use their healthcare dollars to actively vote for better care. Wave 1 population-health managers will invite extra-industry players into the market to improve their value proposition to the consumer and to increase points of engagement. Some extra-industry players will barge in with disruptive (and much more valuable) models, as we have already seen with convenient-care models in pharmacy chains.  With the convergence of electronic health records, personal health records, cloud computing, health kiosks, personal genomics, mobile apps, and home-based monitoring, consumers will expect and demand personalized real-time access to health services. Wave 2 will be driven by pent-up consumer demand from aging baby boomers and tech-savvy Millennials. Players like Rite Aid, Wal-Mart, Walgreens, IBM, and tech/social media companies are already entering the healthcare value chain.

How will this impact business?  By creating new opportunities which are far more lucrative than dwindling cigarette sales. CVS executives said they’ll replace some of lost cigarette sales through smoking cessation programs and will offer more programs to members. CVS also said the programs will be also be a key selling point as it tries to land more corporate contracts this year.

Some of this is already being “blamed” on Obamacare, but what we are really seeing is a shift to value.  The consumerization of healthcare, like the consumerization of IT, is user or patient-centric. It will bring us to a better understanding of customer needs and wants – and find faster and cheaper ways to meet them.

Ask yourself: what does it mean to have CVS, Walgreens and Wal-Mart provide access to care? How would that impact your business and most importantly how will you differentiate your services around quality, outcomes and value!!

Welcome to the brave new world of retail healthcare!

Physician Leadership: An Interview with Dr. Daniel Kollmorgen

Dr. Daniel Kollmorgen is a surgical oncologist, sometimes called a cancer surgeon, practicing with the Iowa Clinic in Des Moines. A graduate of the Physician Leadership Institute, Dr. Kollmorgen is the medical director of the John Stoddard Cancer Center.

How do you view physician leadership?  Can physician leadership be taught?

I think the definition of leadership is evolving. The variety forms of leadership can take is one of the things I relearned in the year-long Physician Leadership Institute sessions with Mo Kasti.   What does it mean to be a leader? It’s not always the visible, captain-of-the-ship leading the charge.  There’s a lot of different ways to lead, and I think that is what is important today. Some people have different skills, but leadership is not just stepping up to be the CEO. It can be applied at every position and the best leaders adjust to each situation.

How does physician leadership impact work performance? Have you changed how you behave?

I think empathy from a leader is as important as command and control. When I’m in the OR, it’s the captain-of-the-ship model, the buck stops with me. But I’ve learned the importance of relationships, being correct every time is not as important as maintaining relationships. Relationships build success for the long run.  How do you help others get to their goals? In the leadership class I learned about myself, how I’m perceived, and it’s not the same for everyone. I became far more aware of how others perceive me, getting feedback on how my actions impact the team.

Self-awareness is huge, especially when you are in a leadership role where people might be intimidated by your position. You have to hold yourself back, and remind yourself to be a friend, a teacher, or a father. By encouraging others to participate and engage, you build a team for the long run.  You have to learn how to switch hats – I have good days and bad days. Taking the leadership class improved my leadership skills and self awareness but it doesn’t provide a foolproof formula.

Who should be enrolled in physician leadership?

I think there are significant benefits to wide participation. First, there’s succession planning. Leaders need to be developed from within the local medical profession. Secondly, and more importantly, is the common language we share which comes from sharing the learning experience.  We build a common lexicon and experience, which helps align us across different specialties and areas.  You get a better understanding of where everyone is coming from, even if you don’t use their strategy.  The spillover into your personal life is significant as well. Trust is a relationship-building tool across all human interactions. The journey is about going from being “unconsciously incompetent” to “consciously incompetent” and then slowly evolving and becoming “unconsciously competent.” I’m still catching myself as I fall back into old habits.

How has physician leadership impacted your business?

The biggest difference has been the breaking down of silos across our multi-disciplinary group.  At the board and committee level we’ve shared common experiences that brought us all closer together as individuals.

We’re not just business associates and partners, we’re friends.  We’ve built shared values and experiences.  I have a better understanding of the colleagues in my class. I recognize how important group activities and culture building is in the greater scheme of things.  We’ve built a stronger business culture, with a common vision, a common purpose; that’s powerful.  It’s helped make the big business decisions less difficult – you don’t have to go to the wall to get 100% input on every decision.  We trust each other to do the right thing, in ways we probably would not have earlier.

Is physician leadership a prerequisite for the navigating the turbulence in the industry?

If physicians want to maintain, or have any say in the future direction of healthcare, they are going to have to see the bigger picture.  If you can’t lead, engage, and participate you’ll become just a cog in the wheel. I think that physicians know what’s best for the patients and that without physician leadership, we won’t be able to make our voices heard. Physician leadership can eliminate barriers between disciplines and the administration. Again, the importance of relationships cannot be stressed enough.

Why Leadership Development Programs Fail

The January issue of the McKinsey Quarterly includes a timely discussion on four common, avoidable mistakes companies make in the implementation of their leadership programs:

1) Overlooking context

2) Decoupling reflection from real work

3) Underestimating mind-sets

4) Failing to measure results

Each one of these pitfalls is addressed in the design and execution of the physician leadership sessions developed by the Physician Leadership Institute. Let’s examine each of these in detail:

According to the McKinsey article, too many training initiatives rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organizational culture, or CEO mandate.

Here’s how the authors frame the context debate:

In the earliest stages of planning a leadership initiative, companies should ask themselves a simple question: what, precisely, is this program for? If the answer is to support an acquisition-led growth strategy, for example, the company will probably need leaders brimming with ideas and capable of devising winning strategies for new or newly expanded business units. If the answer is to grow by capturing organic opportunities, the company will probably want people at the top who are good at nurturing internal talent.

Focusing on context inevitably means equipping leaders with a small number of competencies (two to three) that will make a significant difference to performance. Instead, what we often find is a long list of leadership standards, a complex web of dozens of competencies, and corporate-values statements. Each is usually summarized in a seemingly easy-to-remember way (such as the three Rs), and each on its own terms makes sense. In practice, however, what managers and employees often see is an “alphabet soup” of recommendations. We have found that when a company cuts through the noise to identify a small number of leadership capabilities essential for success in its business—such as high-quality decision making or stronger coaching skills—it achieves far better outcomes.

Our approach takes context into account in its very design. Our physician leadership model is purpose built around the observed challenges in the field.  And to make sure the focus is on the right topics, participants have too undergo a 360-degree assessment before they start our programs.  The assessment is used to tailor sessions for each participant, ensuring that the team curriculum is balanced with individualized dimensions.

Decoupling from Work
The authors view is presented as follows:

When it comes to planning the program’s curriculum, companies face a delicate balancing act. On the one hand, there is value in off-site programs (many in university-like settings) that offer participants time to step back and escape the pressing demands of a day job. On the other hand, even after very basic training sessions, adults typically retain just 10 percent of what they hear in classroom lectures, versus nearly two-thirds when they learn by doing. Furthermore, burgeoning leaders, no matter how talented, often struggle to transfer even their most powerful off-site experiences into changed behavior on the front line.

The answer sounds straightforward: tie leadership development to real on-the-job projects that have a business impact and improve learning. But it’s not easy to create opportunities that simultaneously address high-priority needs—say, accelerating a new-product launch, turning around a sales region, negotiating an external partnership, or developing a new digital-marketing strategy—and provide personal-development opportunities for the participants.

Our physician leadership academy approach does both. We start by first building up the foundational attributes of physician leadership, using our physician leadership model.  This is followed by action projects where cross-functional teams embark on their challenge projects – fixing some of the organization’s most pressing concerns.  The impact of these “action learning” projects allows the physician leader to “be, know, and do” in ways tied directly to business performance.

Change won’t happen if minds don’t change. Here’s how the issue is described in the McKinsey article::

Becoming a more effective leader often requires changing behavior. But although most companies recognize that this also means adjusting underlying mind-sets, too often these organizations are reluctant to address the root causes of why leaders act the way they do. Doing so can be uncomfortable for participants, program trainers, mentors, and bosses—but if there isn’t a significant degree of discomfort, the chances are that the behavior won’t change.

In healthcare, the issue is no different. A common response is as follows: “I am already a leader, why do I need leadership training?”  Our physician leadership programs are designed to change minds. The “expert” individual-contributor culture of the medical profession fosters individual leadership, but fails at building organizational leaders.  We help these “experts” step beyond their comfort zones to become organizational leaders.

Measuring Results
The final obstacle to change is lack of accountability. Here’s how the article states the issue:

We frequently find that companies pay lip service to the importance of developing leadership skills but have no evidence to quantify the value of their investment. When businesses fail to track and measure changes in leadership performance over time, they increase the odds that improvement initiatives won’t be taken seriously.

Too often, any evaluation of leadership development begins and ends with participant feedback; the danger here is that trainers learn to game the system and deliver a syllabus that is more pleasing than challenging to participants. Yet targets can be set and their achievement monitored. Just as in any business-performance program, once that assessment is complete, leaders can learn from successes and failures over time and make the necessary adjustments.

The article goes on to suggest an important way to measure the efficacy of leadership training: “One approach is to assess the extent of behavioral change, perhaps through a 360 degree–feedback exercise at the beginning of a program and followed by another one after 6 to 12 months.”

At the Physician Leadership Institute, we use this 360-feedback approach, coupled with another performance-based metric – the actual ROI of the action-learning projects commissioned through our programs. This allows all involved to see the impact of physician leadership at both individual and organizational levels.

Finally, we make sure that our physician leaders understand that the transformation is a journey that never ends. All our programs include an ongoing leadership component that ties back to the organization’s strategy and purpose.

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