As they grow through mergers and acquisitions, academic health systems often struggle to unite academic and community physician groups. To learn more about how they are addressing this challenge, the Association of American Medical Colleges (AAMC) partnered with ECG Management Consultants to conduct a survey and study to identify trends. Greg Silva, a partner at ECG, spoke with Healthcare Innovation about what is involved in achieving alignment among the different physician cohorts.

Healthcare Innovation: The white paper that AAMC partnered with ECG on was based on a survey about how to unite academic and community physician groups. Could start by summarizing the trend of how much more common it is for academic and community physicians to wind up under the same umbrella — and what some of the ramifications are?

Silva: Maybe 25 to 30 years ago, the traditional academic medical center [AMC] model was a primary teaching hospital, tightly affiliated with a medical school, and the faculty of that medical school were either a closed medical staff or they were the majority of the medical staff practicing at that hospital, so it was more of a one-to-one relationship and a pretty homogenous group of physicians. 

Over the last several decades, many of those AMCs have expanded and become much larger academic health systems with 5, 10, or 20 hospitals as part of that system, through mergers, acquisitions, and other partnership structures. They’re vertically integrated. They're providing acute and post-acute care. They may have an insurance plan, and then their physician enterprise has become a lot larger and more complex, A lot of the hospitals that have now become part of their system may have their own employed physician group. They may be academic in nature or they might not.  So you've got employed physicians across the system, some of whom are faculty, some are not. So it's this really broad, complex group of physicians, sometimes across large geographies, treating very different patients and doing different things in terms of clinical versus academic responsibilities. 

HCI: The white paper notes that many of the academic health systems have been content so far to function as holding companies with limited organizational, financial or operational alignment among the different physician cohorts. So what are some of the dangers or limitations of taking that approach?

Silva: Different health systems are at different places in this journey. Some that really grew into a health system 10 to 15 years ago are probably farther along. We're working with clients that have made acquisitions and become a five-hospital system in the last three to five years. 

The promise of being a health system is we'd have access to a broader patient base. We'll be able to engage in value-based care. We'll be able to provide care in the community, but then send the tertiary, quaternary stuff to the primary teaching hospital. We will have a broader scale and access to capital. I think those are all the reasons that you integrate, but then executing on that and having those things come to fruition is much more difficult because it involves changing how people have done things. 

You may have been in a physician group associated with the hospital. Now you're part of a broader system, and someone says, "Hey, we should really be aligned on how we schedule patients or we should have some alignment on compensation across the system." In concept, everyone agrees to that. But then if you're the group that’s told you need to do something differently, there's a lot of pushback. It's just really hard work to develop that type of integration.

HCI: If this integration is essential, is the real question how to manage that change structurally, and are there several options  being tried as you look out across the landscape? 

Silva: Absolutely. We oversimplify it, but to get some sense of where organizations are, we tried to group it into three archetypes, and there's a lot of gray area in between these. We asked, how is your organization structured today, between your academic and community physicians? Are you totally separate where you have an academic group and a community group in separate companies? Are you what we call a hybrid physician organization, where it's a single organization, but you have essentially an academic division and a community division? Or are you in a hybrid department model, where you have the more traditional academic department structure, and the community physicians are hired into that department? We found a relative split across those. 

HCI: Do you mean evenly split between those three models?

Silva: Not quite evenly split. The most prominent was separate physician organizations, and then about equal between the hybrid department and the hybrid physician organization.

Part of what we found was there were two categories of separate physician organizations — one where it's a separate community group, and they were thoughtful about why it's a separate group. They still coordinate between the two, but the majority of those groups fell into the camp of “We just haven't done the that hard work yet.” So of the groups that were separate organizations, the majority of those anticipated changing that model within the next five years. When we pressed on it, they're moving to more of a hybrid model, where everyone would be in a single physician entity, but maintain some autonomy between the academic and community division. 

One of the organizations that we highlighted in the paper was UNC Health, which has the construct on the other end of the spectrum, where the community physicians have been hired into the academic departments. That seems to work well, and there are some organizations that are effectively implementing that. But at some point, when the number of community physicians reaches a critical threshold, it becomes really difficult to maintain that typical academic structure. So about half of those organizations are also anticipating some change in their model. We heard, for example, of a case where the number of community physicians now outnumber the faculty, so they too are thinking of moving to more of a hybrid physician organization model. The organizations that are in that hybrid model seemed relatively content with where they are for now. It's not like that's the silver bullet or an answer for all organizations, but what it allows you to do is have coordination and align accountability and responsibility, but still recognize these are different cohorts of physicians and not everything is going to be the same across all of them. 

HCI: The white paper distills five themes about things that are critical for more effective integration. I was wondering if we can just walk through some of those briefly and perhaps you can comment on each. The first is that size matters but function matters more. So maybe something that works well when the organization is smaller doesn’t as it expands? 

Silva: That's exactly right. The organizations that had that hybrid department model, on average, tended to have a much smaller percentage of community physicians. As that cohort of community physicians grows, they tend to migrate towards a hybrid physician organization model. 

This may bleed into another one of the points, too — the ability to establish trust between those two physician groups, and regardless of what structure you're in, having a very clear understanding of who's responsible for making decisions, who's responsible for executing. You can start by asking: How do these decisions get made today — and then what would be the ideal state?  That forces a lot of hard decisions. Do we recruit someone? Do we do that at a system level, by geography, based on where we are focusing our service lines? Or is each physician group sort of in a silo saying, we have a need here, and we're going to go recruit cardiologists? How does that fit with our academic strategy, and how does that fit with our broader system strategy?

HCI: So that leads probably to the next theme — that a single, empowered physician executive is essential now. From the survey, is this very commonly the case now? What’s the risk when that doesn’t happen? That they're unclear about how they're going to make decisions?

Silva: I think that's exactly right. I think this person plays an incredibly important role in building that culture, building that trust. They have to be someone who can be credible with the faculty, the academic physicians, and the community physicians. When we asked the question, do you have this today, or do you plan to have that role in the next five years, 75% said yes. We tried to stay away from saying this is a must-have best practice. Every organization is unique, but, I would say that is really becoming the standard. 

HCI: What title does that person usually have?

Silva: There’s a lot of variability. And to add complexity, they may have dual titles. In their health system role, it is most commonly chief clinical officer or chief physician executive, and then a lot of variations on that. They will often have a role like president of the physician organization and then also a title in the College of Medicine, like a vice dean of clinical affairs or something like that. They're really not just focused on clinical, not just focused on academic, but have a balance and are seen as a leader across the components of the health system.

HCI: The next theme relates to the department chair's role. Are there traditional functions that the department chairs have had in academic settings that this integration with community physicians has upended?

Silva: In many ways it can elevate the role of the department chair, but it is complicated. We would say it's a best practice for the department chair to concurrently serve as the clinical service chief in the hospital, so that they have responsibility for both, right? Having your department chair oversee those things is important. This gets challenging in two ways. One, as health systems are moving to more of a service line structure, that doesn't always correlate to your traditional academic department structure. So a neuroscience service line has a Department of Neurology, Department of Neurosurgery and other departments involved. So who's the leader of that? There are often turf battles. 

As these health systems get bigger geographically, if we're trying to develop a system-wide neuroscience or cardiovascular service line, who's the individual responsible for that, and how do they interact with the department chair? In the survey we asked that question, and it's pretty split in terms of the role of the department chair overseeing the community physicians. It's about half and half.

HCI: The next topic involves focusing on what matters to physicians — offering multiple employment models and things like shared infrastructure and compensation philosophies. Could you talk about the shared infrastructure? We interview academic health system execs who are creating clinically integrated networks with community or independent physicians, and often they're not on a shared EHR infrastructure, which can make working on population health or value-based care more challenging. Is it important to get people on a shared infrastructure to make this work?

Silva: A lot of times I think that's critical. It's sort of becoming table stakes. It's somewhat less sensitive than getting into compensation planning or corporate structure, or who's leading the group. But being able to say we're on a shared EMR and a single revenue cycle function, a single payer contracting function, and each of these groups is not duplicating that effort is absolutely critical. 

When we asked do you now have or do you plan to move to a shared practice management infrastructure in the next five years, 100% said yes. When you get into things like compensation philosophy, that's a little bit more mixed. And a phrase we heard a lot is "equitable, but not equal." So if you're an academic physician who does patient care, teaching and research, vs. someone who spends 100% of their time treating patients, it doesn't make any sense to say you're going to have the exact same compensation model. But just looking at your clinical time, in some cases, you have these physicians working shoulder to shoulder, and you want there to be parity where it's possible, but recognizing that they're doing different things. 

HCI: The last point the white paper makes is that there's no perfect model, and that what matters most is not structural uniformity, but cultural integration, role, clarity and a phased, pragmatic approach to change. So what are some are there some keys to cultural integration and some steps that your firm recommends in a phased approach?

Silva: It requires just a ton of buy-in and communication, and in some cases having difficult conversations. That's where the idea of an empowered physician executive who can build trust and credibility with faculty, with the community, is important.

You can have the classic town versus gown situation, where the community physicians say, "Oh, the faculty members take every Friday off; they're not as busy as we are," whereas the faculty are saying, "Oh, you're just churning through patients, and you're not as interested in research and teaching." Obviously neither is true, but those are long-held beliefs. So there is a softer change management aspect to building culture.

How do we develop consensus around these ideas? One thing that's incredibly helpful is starting with the patient in mind. We’re not doing this just for the sake of doing it. It is important because we want patients — wherever they enter in our system — to have the same level of quality, to have a consistent experience, to be able to get care close to home, with access to tertiary and quaternary care when they need it, to do hand-offs between our physicians. It is important to give the patient a consistent experience within the health system. I think aligning to that North Star helps to make those difficult conversations a little easier. 

HCI: Are there other trends coming down the pike that will impact the pace of this integration work, such as payment trends from CMS?

Silva: There are a couple of market-specific trends that we heard about, and we see in our work day to day. Different markets are in different places in terms of how much of their revenue comes from value-based at-risk contracts versus traditional fee for service. That is certainly pushing the need for this integration to occur, because if you're going to go at risk for a patient population, functioning as a coordinated physician enterprise becomes more important.

The other one is that the prevalence of private equity varies a lot across the organizations that we were talking to. So in some markets, private equity is coming in and really putting pressure on the physician organizations or becoming an acquirer of specialist groups. That’s escalating the desire for health systems to either acquire physicians groups or be really tightly aligned with them as an alternative to private equity.