Developing Strategic Practice Cultures Through Analytics

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Doug Smith, Managing Partner, IMP Strategic Positioning & Consulting

Medical practices that once focused almost solely on the quality of care are increasingly including profitability and long-term viability in their strategic plans. The cultural changes that necessarily must accompany these conversations can be unsettling, at best, and devastating, at worst—unless steps are taken to make the cultural-transformation process as seamless as possible.

Key to smooth cultural change is effective, meaningful communication throughout the organization, according to Doug Smith, managing partner of strategic positioning and consulting solutions for Integrated Medical Partners (IMP). Partners, physician associates, nurse practitioners, medical assistants, physician assistants, practice managers/executives, staff, and even patients must understand the practice’s mission and core strategic imperatives. Physicians and staff alike must live those, every day, with their customers (hospital leaders, referring physicians, third-party payors, and patients).

This communication can and should be supported through the sharing of meaningful and differentiating information derived from sophisticated business intelligence, analytics, and informatics tools, Smith says. Business intelligence works to drive and reinforce cultural change because of its pure objectivity: The information is not polluted by considerations such as personal agendas, factional conflicts, or misinterpretation of raw data.

Evolution of Medical Groups

Smith’s consulting experience has exposed him to many practice environments in which cultural change could have been facilitated by the use of well considered and supportable business-intelligence tools. “The pressures in patient care have increased dramatically over the past decade, and more senior physicians are quitting due to the increasingly complex business demands on the practice of medicine, increasing regulatory changes, or proliferation of defensive medicine,” he notes.

“When we speak about adaptive practice cultures that have evolved, though, we must also take into consideration the effects of consolidation and integration, including a continuous trend of physician-practice mergers and other affiliation constructs,” he explains. “As a result, more complex organizations are evolving to meet the demands of modern practice, and such organizations require a leadership culture that includes the infrastructure demands of governance and management, on top of their serious clinical responsibilities. Physician leaders need to get their arms around understanding the differences and demands of these more diverse and complex organizations operating in a more complex and fast-paced environment as quickly as possible.”

Smith observes that in today’s complex health-care environment, holding on too closely to past patterns of decision making and leadership can be extremely detrimental to the health of a practice. “Today, the speed with which decisions are made is crucial,” he says. “Practices can no longer afford to have 20 or 30 people sitting around a table, making decisions as a group. They need to make crisp, well-informed decisions. Delegation of authority, for certain decisions, by the partner group to a more streamlined body is essential in today’s universe.”

In the practices with which he works, Smith has seen indications that medical groups are evolving in this direction. “What we are seeing is a progression where groups will eventually be in a position to make decisions swiftly and confidently,” he says. “More and more, they will be constructing an executive committee and other management teams and delegating certain authority and accountability to them.”

Role of Business Intelligence

Today’s medical practices are increasingly reliant on the use of business intelligence to support both short- and long-term decision making. Smith notes that incorporating measurement into decision making represents a cultural change for many physicians and practice managers, who might previously have been more focused on the clinical side of the business.

“Metrics are a decision-support tool for business, and they are required to help make crisp decisions in this fast-moving environment,” Smith says. “The new culture for medical groups should be one that emphasizes the importance of good patient care, but equally recognizes the need for people who understand the financial health of the practice and understand what it is going to take to adopt new strategies to survive and thrive.”

Developing these measures requires an investment in the technology necessary to derive actionable data from a group’s disparate information systems—an investment that practices should be making right now, Smith advises. “The groups that are positioning themselves well for the emerging health-care environment are those that have made the right investments in transforming their data into actionable and differentiating information,” he says. “That will empower them to make decisions for the future health of the practice, as well as to separate their practices from all others in a highly competitive environment.”

Asking the Right Questions

Smith emphasizes the importance of asking the right questions in developing an analytics strategy. “Practice leaders should be asking themselves, ‘What are those points of data that will help differentiate us from the competition?’ They need to have data, transformed into actionable information, to look at the variances between their progress and their goals, which will allow them to plan for the future,” he says.

Equally important is positioning these data appropriately within the practice’s decision-making infrastructure, Smith says. While data might once have been used solely to look at referral patterns or the effectiveness of marketing liaisons, today, they are finding their way into the boardrooms of successful medical enterprises. Discussion of analytics should become a matter of routine among the practice’s key stakeholders—including physicians, he says.

“The administrative-support function of the physician group should be providing physicians with analytics and interpretation,” Smith advises. “The executive committee needs to be able to take a summarized version of the health of the practice from those metrics, and it should be able to realize quickly what needs to be addressed. That’s where dashboards and scorecards come into play. Analytics and informatics not only must display retrospective trends (and the reasons for them), but also must be predictive in nature, pointing to future performance and results.”

He continues, “The key analytics and predictive informatics provided to the executive committee should be summarized and shared at a monthly meeting with the board, so that all shareholders and stakeholders are adequately informed. Here, frequency and regularity are important. The worst thing that can happen to a group practice is getting caught in a decision loop where no action is ultimately taken. That kind of stagnation is detrimental and is no longer a viable culture.”

As proof of the importance of this new positioning, Smith offers the most powerful question that results from careful attention to analytics on the part of practice leaders. “When practices are able to leverage predictive analytics, they see, with great accuracy, where they are going to be next week, next month, three months from now, and so on,” he says. “This helps them ask the really critical question: ‘How will we develop long-term differentiating strategies, given our specific performance metrics, as revealed by our data?’”