Emory prefers to align independent PCPs through its clinically integrated network. When that is not possible, Emory is growing existing practices and acquiring or starting up new practices.  

 

Lori McLelland and Judy Belt, Emory HealthcareAtlanta-based Emory Healthcare launched its clinically integrated network of physicians in 2012 and quickly realized the system needed to strategically grow the primary care component of the network. 

“As an academic medical center, we tend to have more specialists than primary care physicians, which is a challenge if you are trying to develop an ACO strategy,” says Lori McLelland, Emory’s executive director, market development.

Currently, only about 170 (8 percent) of Emory’s approximately 1,600 employed physicians are primary care physicians (PCPs). Although Emory has the largest number of PCPs among the health systems in its market, it has a low overall percentage of PCPs compared to specialists. Some of Emory’s competitors boast triple the percentage of PCPs. 

To prepare for population health management, Emory used an intensive market development approach to identify where and how to best expand its PCP presence across its large service area (15 counties within 35 miles). The effort is already paying off. As of January 2014, Emory has acquired one additional strategic PCP practice and is in talks with several other practices, McLelland says. New practice sites have also been identified. 

Physician Strategy by Zip Code

A high-level market development team is in charge of overseeing Emory’s PCP growth approach. The team includes the system CEO, hospital CEOs, the clinically integrated network president, strategic planners, market development leaders, clinical practice and physician leaders, and the faculty practice CEO. 

The team, which meets three times a month, reviewed various types of data to pinpoint the best zip codes for possible PCP growth (see the exhibit below). 

Emory Zip Code Approach

The team then determined the best approach for building a PCP presence in these zip codes. This four-month process—which was led by McLelland; Judy Belt, corporate director, strategic planning office, Woodruff Health Sciences Center, Atlanta; and Maureen Haldeman, vice president of operations at Atlanta-based Emory Clinic—involved a number of important steps: 

Identify the key zip codes. A subset of the market development team broke Emory’s service area into 15 geographic areas with 140 zip codes, based on proximity to a system hospital, population density, travel patterns, and other factors. 

Then to narrow the field even further, the team used a color-coded chart (see exhibit below) to identify the geographic areas that showed the most promise in terms of PCP growth. For each of the 15 geographic areas on the chart, the team scored factors such as population, percentage of Emory PCPs, percentage of Medicaid or self-pay patients, the main competitor, and the number of hospitals in the area. 

Emory Preliminary Focus Area Priorities

Based on this directional data from the chart, the market development team was able to recommend one of three strategies for the 15 areas:

  • Develop new PCP sites where Emory did not have much PCP presence
  • Grow existing sites where there was some PCP presence
  • Sustain the current strategy in areas where there was significant competition

From this exercise, the team narrowed the field from 15 geographic areas to four priority areas. Those four first-priority focus areas included 50 zip codes, down from the original 140.

To further narrow the list of zip codes, leaders reviewed a number of data points, including: 

  • The number of PCPs
  • Competitive sites
  • Household income
  • Proximity to an Emory hospital within 10 miles
  • Cost of rent
  • Number of Emory employees 
  • The availability of potential practices to purchase

After reviewing these data points, the team narrowed the list from 15 to eight target zip codes. The team then used a free tool, melissadata.com, that provides a detailed visual map of streets (similar to Google Maps) to help identify where they wanted to be within each zip code. They also vetted locations with the physician liaison team.

Select the best alignment strategy for each target zip code. Emory’s market development team had several strategies to choose from to align PCPs in each target zip code. But not all options were viable in every market. “Geography really mattered,” Belt says.

Emory’s preferred strategy is to align independent PCPs through its clinically integrated network. Based in part on the approach taken by Illinois’ Advocate Health Care, Emory’s network encourages a partnership with physicians around improving quality and costs. “It is a solution that allows us the opportunity to expand the network while allowing physicians to remain independent,” Belt says. 

A second alignment strategy is to acquire new practices or patient-centered medical homes (PCMHs), although that is not realistic in areas with few PCPs. In those zip codes, Emory may employ physicians and develop a start-up practice, PCMH, or an Emory “storefront” with primary care, specialty, and imaging services.

Yet another option is to grow existing practices by adding mid-level providers and extending hours.

Determine timeline. To help determine the phasing of Emory’s PCP strategy, the market development team designed a matrix (see the exhibit below) to assess key locations in each zip code according to certain criteria, such as:

  • Was there a compelling competitive issue in the location, such as another hospital’s new ambulatory center?
  • Did the network need PCP coverage in certain locations? 
  • Was there a specific operating unit need, such as the need to support a service line in a particular community hospital?
  • How easy would it be to start up a new PCP practice (e.g., change referral patterns) in the market? 
  • What is the cost of the strategy? For example, is rent high in the area? And how long would it take to implement that particular initiative?

Emory Matrix to Determine Phasing

Answers to these questions helped Emory’s market development team assign each location to a particular rollout phase on the system’s PCP alignment timetable (June-August 2013, September 2013-February 2014, or March-August 2014).

Develop pro forma assumptions. Belt worked with Emory’s business development team to identify the ideal mix of providers at each new start-up site. They determined that in five years, they wanted to have three physicians and two advanced practice providers at each site. They also worked with Emory’s operational and facilities experts to estimate rent and capital requirements at new practices. 

During the pro forma discussions, several key issues arose. For example, would each PCP site need to breakeven? Historically, practices at Emory had to generate a bottom line. “But we had to ask if that made sense for primary care—that was a new concept for Emory,” Belt says.

The market development team also had to determine which of Emory’s hospitals would be responsible for funding initial losses. “We didn’t want losses funded at the corporate level because there needed to be some accountability, but there was some geographic overlap among system hospitals,” Belt says. 

Another issue was downstream revenue to the hospitals—should it be considered in evaluating the internal rate of return? “In the end, we were conservative and didn’t include downstream revenue in the internal rate of return, but we did disclose an estimate of the downstream revenue so people would understand the potential,” she says. Belt believes this conservative approach helped senior leaders feel confident about the pro formas, which made it easier to gain the capital and FTEs needed to support the initiative.

After doing this analysis, Emory estimated the total capital investment of the PCP strategy at $20 million over five years, from 2014 to 2018. This included the addition of eight new FTEs, including physician liaisons and a physician recruiter, to help roll out the strategy. 

Lessons Learned 

McLelland and Belt offer this advice for developing a PCP alignment strategy:

Enlist the CEO to lobby key board members. Emory’s system CEO met with the board at the start of the process to ensure they understood the rationale for the PCP alignment strategy and would be prepared to approve the capital investment required.

Interview stakeholders early on. At the start of the project, Belt and McLelland met with market development team members individually and asked them for their views on the following questions:

  • Did distinct geographic areas need distinct strategies?
  • What is the role of the private-practice PCP versus the employed PCP?
  • Are there any “no fly” zones where they should not put an Emory practice?
  • Other than poor quality, are there any other non-starters (such as solo practices)?
  • Should Emory defensively acquire practices to prevent competitor acquisitions?

They presented the results of the interviews at the first market development team meeting, which helped all the members to understand the diverse opinions on the team.

Realize it’s OK to say “no” to some opportunities. This might include saying “no” to a specialist seeking employment if saying “yes” takes the focus away from the primary care strategy. The same is true of primary care practices seeking employment that are located in low-priority areas.

Give yourself at least three to six months to roll out a physician alignment strategy. “You not only need time for the data pull and analysis, but you also need time for buy in and getting everyone on the same page,” says McLelland.


Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill.

Interviewed for this article: Judy Belt, corporate director, strategic planning office, Woodruff Health Sciences Center, Atlanta; Lori McLelland, executive director, market development, Emory Healthcare, Atlanta.

This article is based on interviews and a presentation at the Society for Healthcare Strategy and Market Development (SHSMD) conference in September 2013.