Financial Leadership

Next Steps for Physician Leaders

March 21, 2017 2:52 pm

Physician leaders bear the primary responsibility for shaping the next generation of healthcare delivery. And it’s up to managerial and finance leaders to help them do it.

Experiments continue with models of healthcare delivery—clinically integrated networks, value-based payments, bundled payments, reference pricing, high-deductible health plans, MACRA, and more. At the same time, significant gains are being made in quality metrics and patient satisfaction. And for a select few cases, costs are being reduced. But overall cost reductions have been hard to come by.

Gains also have been elusive in physician satisfaction. Physician leaders have been vocal in identifying the challenges they face. Here are some examples of comments we have heard:

  • “We need still more engagement with patients—including more awareness and approaches that recognize psychological issues.”
  • “Most of us—especially those of us who are deeply engaged in process improvement—know we still have much more work ahead.”
  • “We are not leveraging big data and IT enough—especially at the patient/physician level.”

The challenge is taking its toll: Physicians are burning out faster—finding it harder to stay motivated and to innovate. And although some organizations have effective physician leadership, many do not. All too often, physician leaders have “a seat at the table” but limited real influence on health system budgets and direction. And physician engagement in value-based approaches often is limited to leaders at the highest level, while lack of engagement persists among physicians further down in the organization.

Many organizations also lack alignment between physician incentives and overall organizational incentives, and this alignment issue is growing as the number of physicians in independent practices declines. Meanwhile, some physician organizations are too small or too strapped for funds to implement needed changes.

Part of the problem may be an over-emphasis on experiments and an under-emphasis on how to make them work. Many prescriptions for improvement will require highly effective physician leaders, plus funds and other forms of support. It therefore should be a priority for healthcare organizations to identify and cultivate the right physician leaders.

What Leaders Really Do

Harvard Business School professor John Kotter wrote a highly influential article in 2001 in which he makes a strong distinction between the complementary and equally important roles of a leader and a manager. For example, a leader sets overall direction, builds coalitions, inspires, and aligns incentives, while a manager plans and budgets, organizes functions, and solves problems. A leader, Kotter says, looks for the right fit between people and the vision (to believe in an alternative vision and then to take initiative based on that shared vision).

Kotter suggests we are “over-managed and under-led.” In his book
Leading Change, Kotter recommends eight steps strong leaders should take for implementing change:

  • Create urgency
  • Form a powerful coalition
  • Create a vision for change
  • Communicate the vision
  • Remove obstacles
  • Create short-term wins
  • Build on the change
  • Anchor the changes in corporate culture

Impelling change is perhaps the most important ongoing task of a leader. A 2005 study of physician leadership goes further, saying transactional leadership approaches alone (i.e., relying on financial or other external rewards or penalties) are less effective than transformational approaches (i.e., seeking to gain buy-in), and the two methods together are most effective.

What Physician Leaders Need to Do Now

Where does today’s physician leader go next? Questions physician leaders should address include whether they are leading, as opposed to only managing, and whether they are envisioning the right next steps.

Another key question for physicians: Do we need to redefine or reinforce our coalition? For example, how strong is our link with our key physicians and with our sponsors, such as health system leaders? Now that physicians increasingly are leading groups that are subsidiaries of health systems, we see physician leaders who are too far removed from their organization’s CEOs or CFOs to be in a good position to build strong coalitions. Before they can do so, they must become strong leaders in their own right. Often physician leaders must convince others that there is a problem, or a need, before they can build their coalitions.

Physician leaders also need to develop their next vision. Obviously, this vision will vary, but for many, it will involve:

  • Motivating physicians and staff more deeply within the organization
  • Building momentum by obtaining additional outside resources and achieving new small wins
  • Involving patients and their psychological and emotional needs in a different way
  • Addressing burnout

What CEOs, CFOs, and Others Can Do to Help

For finance leaders and others within a healthcare organization, the challenges of physician leadership raise many additional questions:

  • Can we inspire and align our physicians, staff, and other managers?
  • Can we get others on board?
  • Do we have the right physicians in the right roles to accomplish the vision? (Many of the most successful physician leaders already were highly respected when they took on their leadership roles.)
  • What kinds of help do we need to support our physician leaders?

As one non-physician CEO recently told us, “Once the right physicians were taking the lead in a good direction, the rest of us needed to step back and give them room.” Interestingly, physician CEOs say something very similar.

The growing number of physician leaders who are part of a health system need backing from health system CEOs and CFOs. Providing the financial backing of taking the next step in physician leadership will amount to small dollars and a substantial ROI for most health systems.

The Bottom Line

Most physician leaders are highly committed, and they deserve great appreciation for the job they are doing. But many are managing more than they are leading. It’s important that others, including CEOs and CFOs, give them the space and support to take the next steps in leadership.

Keith D. Moore, MCP, is CEO, McManis Consulting, Denver, and a member of HFMA’s Colorado Chapter.

Dean C. Coddington is a senior consultant, McManis Consulting, Denver.


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