Is Your Strategy Suffering From Not Having A Physician Compact?

Thursday, December 22, 2016 | Larry Sobal

 

It’s strategic planning season for many organizations, and that is why my recent blog posts have offered insights into strategic thinking and strategy creation:

• Tools for More Effective Strategy Development and Execution
• A Proven Strategy In Uncertain Times
• Using Clinical Co-Management to Turbocharge Your Service Line
• Solving the Clinical Service Line Struggle

Today’s post will address a critical component of effective physician practice or health system strategy: the Physician Compact.

The idea of a Physician Compact is simple, it’s a process that defines and documents the expectations physicians have regarding what they will receive from an organization and what the organization expects in return. In other words, it articulates what physicians and the organization understand each will need to offer the other to achieve “interdependency.”

If you acknowledge the role that culture plays in impacting behaviors, and that behaviors are a critical part of strategy execution, you can accept how the success of your organizational strategy is impacted by the barriers and challenges rooted in organizational culture. When a culture and strategy are not aligned, your chances of engaging physicians and achieving breakthrough performance are likely to be severely compromised. 

The following diagram illustrates how I see a compact complementing the other aspects of your organizational change process. This suggests that your Strategic Plan, Governance, and Physician Compact are all critical contributors to the understanding and attainment of an interdependent vision.

 

What I typically see in organizations that keeps them from achieving a truly interdependent vision and breakthrough performance is that they can never quite get the physicians engaged in the vision and strategy. When I probe into why strategy has stalled, I usually learn they have never peeled back the surface layers of their culture to expose the underlying values, attitudes and beliefs to understand the dynamic between physicians and administration. That’s where a Physician Compact can be a critical element in the overall strategy process. A Physician Compact addresses the cultural dynamics and fleshes out the mutual expectations.

Whether it is realized or not, organizations do have Physician Compacts in place; though they are usually not written down or formally acknowledged, both physicians and administrators have expectations of each other. Traditionally, physicians have had a certain degree of expectation of autonomy to care for patients without interference and protection from changes brought on by payment reform or market changes. Likewise, administration has had a certain degree of expectation of physician engagement in leadership and improvement work along with compliance with organization policies and agreements.

Unfortunately, the dynamics of this unspoken compact don’t necessarily help an organization respond to challenges or make improvements quickly. In some cases, the implicit compact is an impediment to change altogether. To benefit from the level of interdependency required to be successful in health care today, an organization must formally clarify the “gives and the gets” between physicians and administration in order for adaptive and transformational change to occur.

Taking the time to produce a compact has the potential to transform disappointment, resistance and struggle into hope, willingness and alignment.

So how do you create a Physician Compact? It starts with physicians and administration having the crucial conversations to express their respective expectations and articulate those commitments in the form of a written compact. The end result can be one page or multiple pages, with more of the value being created in the course of the conversations rather than the final written product. In most cases, the compact consists of two columns, one listing the Organization’s Responsibilities to Physicians and the other listing the Physician’s Responsibilities to the Organization. The “organization” can be a physician practice, a hospital, a health system, an ACO or any type of organization that would benefit from having a more clearly defined set of mutual expectations. A compact is not a legal document, nor is it something that you would likely change every year.

I can tell you this: if you take the time to have the multiple conversations necessary to develop a compact, it becomes the glue that binds an organization together by creating a shared and mutual commitment to the overall success of the organization. Taking the time to produce a compact has the potential to transform disappointment, resistance and struggle into hope, willingness and alignment. Once understood and in place, a compact allows everyone to bring together their intellects, creativity and energies to improve health care and build the level of value that will differentiate winning and losing organizations.

For those of you who were just chosen by CMS for one of the cardiac bundles, if your implicit compact doesn’t already have a level of cooperation and trust with the physicians who will determine your success, you should strongly consider spending the time now to strengthen your relationships with a formal compact.  As we have seen numerous times, creating economic incentives alone doesn’t always lead to the desired results.

If you would like to learn more about Physician Compacts, and how to develop one in concert with your organizational strategy and governance, please contact me.

 

Illustration: Lee Sauer

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Larry Sobal is the Executive Vice President of MedAxiom. He has a 35-year background as a senior executive in medical group leadership, hospital leadership and health insurance. Larry consults, writes and presents on topics relevant to transforming physician practices and health systems. 

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