AAMC Group on Faculty Practice
Annual Symposium
November 4, 2011
Mark A. Kelley, M.D.
CEO, Henry Ford Medical Group
Profile of HFHS
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95 y.o. hospital-based health system with
― 6 hospitals - flagship (HFH) in downtown
Detroit
― Health Alliance Plan - 500,000 HMO
members
― Employed physician practice (HFMG) 1200 physicians in 30 locations
― $4B net revenue
What Is HFMG?
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A 40-specialty academic Medical Group practicing in 30
HFMG Medical Centers
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Employing 1,300 Senior Staff Physicians & Researchers
along with 3,100 non-physician providers and support staff
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HFMG generates $750M in net revenue, which represents
about 33% of total HFHS provider revenues
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70% of the business in traditional fee-for-service, with the
other 30% being global capitated (120,000 HMO members)
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Physicians generate 2.1M clinic visits annually
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HFMG Medical Center
HFMG MC & UC
MC & 24 Hour ER
Hospital & ER
Macomb UC
Wyandotte MC & ED
HFMG Facts
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HFMG is the third largest academic group
practice in the nation ($1.5B GPR) only behind
Mayo and Cleveland Clinics
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HFMG generates 10,000 clinic visits per
business day
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The Group trains over 700 residents and fellows
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One-third of all physicians in the state of
Michigan have been trained by HFMG
HFMG Structure
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Organized as blend of group and academic
practice
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NOT a separate corporation but considered a
separate business
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Led by HFMG CEO, COO, Chairs, Center
Directors
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Elected Board of Governors
Henry Ford Medical Group and Medical Staff Governance Structure
CEO
HFMG
Board of Governors
Bylaws &
Governance
Research
Credentials
Institutional
Animal Care &
Use Committee
Education
Physician
Health &
Effectiveness
Salary
Appeal
Institutional
Review Board
Professional
Standards &
Conduct
Practice
Support
Committee
Finance
Human
Resources
Salary
Management
Hospital
Clinical Practice
Committee
(formerly ka HMEC)
Continuing
Medical
Education
Graduate
Medical
Education
Undergraduate
Medical Educ.
5/4/2011
Biomedical Ethics
Cancer Coordinating
Executive Committee,
Institutional Critical
Care
CPR
Infection Control
Inpatient Pharmacy and
Therapeutics
Medical Records
Operating Room
Executive
Operating Room
Quality Assurance
Organ Procurement
Radiation Safety
Safety
Disaster
Environmental
Tech. Assessment
Transfusion Medicine
Trauma Care
Utilization Management
Ambulatory Nurse Council
Complimentary & Integrative
Medicine Advisory Council
Pharmacy
Quality
Council
Henry Ford Medical Group
2010 Payor Mix by Gross Revenue
5.4%
0.3%
2.1%
3.7%
Medicare
23.7%
Medicare HMO
Medicaid
Medicaid HMO
20.0%
Blue Cross
HAP Capitated
Other Managed Care
Commercial
Workers Comp
17.8%
16.3%
6.6%
3.9%
Self Pay
Annual Compensation
Process
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Governed by the SMC and Board of Governors
•
National and local market indicators used to
assess HFMG competitiveness
•
SMC also reviews interdepartmental
compensation equity vis-à-vis prevailing market
conditions
•
Final compensation pool value is determined by
CEO of HFMG, in collaboration with System
Trustees
Total Cash Compensation (TCC)
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$170M Senior Staff Payroll
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85% of TCC is base salary; 15% incentive
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TCC includes Base, Incentive and Moonlighting
pay
•
We use several types of wRVU-based incentive
plans
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Incentive Plans have been in place since April
1998
The Elements of Every Practice
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Governance
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Economics
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Trustees (if any)
Broad of Governors (peers)
Administrative Structure (operations)
Revenue, expense, growth
Compensation
Funds flow in and out of the practice
Academic Responsibilities (if any)
External Forces : economic, regulatory
Why Does the Practice Exist?
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Make $$ for:
― Shareholders
of the Practice
― Hospital/Corporation
― Medical School/University
― Research
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Provide Education
Conduct Research
Serve the Community
What are Your Priorities ?
HFMG’S Priorities (in Order)
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Take Great Care of Patients in Every Dimension
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Recruit and Retain the Best
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Create the Future of Medicine through
Innovation and Medical Education
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Use Society’s Resources Wisely
How You See Your Medical Staff
How Others May See Your Staff
Worry #1 : Recruiting/Retaining
Talent
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Establishing and Maintaining High Standards
Compensation
Leadership Development/Succession Planning
Generational issues – pro and con
Primary Care as Endangered Species
Advantages in academic practice
― Steady
stream of new talent
― The workhorse assistant professor
Who is in Charge?
Dean, Hospital CEO, Other?
Department Chair?
Worry #2 –Governance and
Leadership
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Chairs – team captains …or “autocratic
Dukes” ?
Administrators –Partners …or “Suits”
― Practice/department
managers
― Finance
team
― Facility managers
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Board of Governors
― Role
--Operational vs. Strategic
― Helpful for Peer review
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Tip : Trustees usually think like patients
…I can destroy You with…..
…FUNDS FLOW !
Worry #3 – Funds Flow
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No practice can live off professional revenue
alone
Downstream revenue counts the most
A consolidated bottom line and collaboration,
make funds flow irrelevant (like Mayo/Cleveland
Clinics)
Separate and competing bottom lines foster
internal warfare
Those distracted by internal politics are conquered
by those committed to growth
Run a Tight Ship
(Minus the Mutiny)
Worry #4—Practice Discipline (just
like Taking Care of Patients)
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Achievable/Understandable Goals
Accurate Data -- “What is the truth”?
Problems are made to be solved
Performance Expectations
― Transparent
dashboards and consistent metrics
― “Making Rounds” on the Practice with quarterly
reviews
― Intelligent decisions at the unit level
Tip: no end runs; no upward delegation; no special
deals that cannot be universally applied
Does Everyone Know the Plays and
How We Keep Score ?
Worry #5 --Economics
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Top Line
― Who
negotiates your contracts, determines payer
mix, does your billing/collection?
― Fee for Service vs. Bundled Payments –ready or
not?
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Expenses
― Internal,
what you control in your practice
― External— e.g. allocations/overhead, taxes
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How do you manage?
― What
do your docs understand?
― What benchmarks do you use?
Worry #6 –Fostering Quality
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Outpatient Practice
― “Consumerism” –Access, Press-Ganey
― HEDIS and other Pay for Performance
― “Appropriateness”
Inpatient Performance
― Readmissions
― Harm events
― HCAPs/Core Measures
Yoda’s Rule: There is no “Try” –
Only “Do, or Not Do”
Worry #7 –Competing Priorities
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Typical Tensions
― Faculty time --Teaching and/or research vs.
practice
― Profit at the expense of academics
― Academic core in the midst of a nonacademic enterprise
Stay focused on your mission and make it part of
every message
Tip: Not everything is equally important, avoid
institutional A.D.D.
Feel Like an Island in an Archipelago
?
Worry #8 –Islands Inhibit
Progress
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Islands Within the Practice
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Departments, divisions, inpatient vs. ambulatory
Docs vs. administrators
Researchers, educators, clinicians
Islands in the Organization
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Hospital vs. practice
School vs. hospital
Practice vs. everyone else
Archipelagos Survive Only
When the Islands are United
( e.g. Japan, Great Britain)
Ready for Health Reform?
Defend Your Mission…
But Embrace Change