Making Physician Practice Acquisition a Long-Term Success

Tuesday, April 30, 2013 | Joel Sauer

Taking time to creat a value-oriented culture

In most cases the goal behind physician practice acquisitions is the creation of an integrated delivery system (IDS), a model designed to more effectively manage care and improve quality.  While this is certainly a laudable goal, it by no means happens organically simply because the logo on a paycheck has changed.  Significant effort will need to be expended to create an effective IDS.  Somewhat paradoxically “culture” will happen to the merged entity without any effort whatsoever.  Given the size of these investments, both up front and ongoing, it behooves hospital leaders to make sure this critical element – culture – isn’t left to chance.

A Big Lever

The World English Dictionary defines culture this way:  “the total range of activities and ideas of a group of people with shared traditions, which are transmitted and reinforced by members of the group”.   As the definition states, culture is “transmitted and reinforced”.  Thus, size matters.   Given that hospitals are almost always significantly larger than the practice being acquired, absent any energy to the contrary, it is the hospital’s “traditions” that will be taken on by the IDS.  While this may all be well and good, it may not.

Since so much of building a successful IDS is predicated on creating value, by aligning the pieces to both improve quality and lower costs, there has to be an aura of trust. Without it, the data transfer simply won’t happen.  It’s critical that at every level employees feel comfortable sharing information – even when it’s not good news.  Does this describe your hospital’s culture?  It’s important to rely not on what you would like or think your culture is, but on what truly exists.  This can rather easily be found by interviewing a few employees at each level of the organization. Randi Bussi, a personal branding specialist, suggests these questions:

1. What three words or phrases would you use to describe the company culture?
2. Does the company have a stated set of cultural values?
3. Can you describe the environment here?
4. What is the company's attitude toward educational and professional development?
5. What type of employee achievements are recognized by the company?

In addition to employees inside the organization, it would be wise to hear how key constituents on the outside perceive your culture.  The same questions above can be administered to a sample of incoming physicians and group employees.  Since perception is reality, it’s important to get a baseline on the attitudes now joining your IDS.

There’s a saying that goes, “Culture eats strategy for lunch”.  No matter how sound your strategies, if your culture isn’t in sync, or worse is actually contrary to the plan, your chances of success are minimal.  Thus, it’s critical that leadership – right up to the CEO – create a culture of trust and openness. This will take some money and effort, but to ignore it will have far great costs long term.  Acquiring a physician practice is a significant investment and has the potential to pay huge dividends under the right circumstances.  Given this, it’s worth spending real time and effort on culture.

As noted earlier it will happen regardless.  You just might not like where it takes you.

 

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