Reference no: EM132272464

Midtown Neurology was started by a single physician who had been practicing in the community for nearly 20 years. As the practice grew, it evolved from a “mom-n-pop” operation to a more complex model. The founding physician recruited four new neurologists to join and continue to help build the practice. Subsequently, however, the new doctors took over and forced him out of the practice.

The large urban hospital with which Midtown was affiliated achieved Level 1 trauma status, providing additional new opportunities for the practice. The neurologists took on the many responsibilities, including one of stroke team for the hospital. Contractual rural outreach was practiced utilizing telemedicine throughout the state and provided a robust revenue stream.

While still a small physician group, it required a difficult call schedule. Tracking call and distributing it equitably became a challenge. The main reason for this was the founding physician had written a proprietary program exclusively for this purpose. Now the practice was beholden to the very person they had forced out of the practice for a vital part of communication with the other practices regarding the call schedule. This was very unusual, as physicians don’t typically write proprietary software for a practice. In addition, the entire platform including the billing program, which he also developed, used MS-DOS.

The practice employed a practice manager who had started with the founding physician. As the practice grew, the manager did not keep up with the basics of managing a practice. Her information relating to billing, reimbursement, and changes to current CPT and ICD-9 issues was out of date. She was also ignorant of the contracts the practice had, but more importantly the impact of those contracts on the practice and how to carry them out appropriately.

While the physicians were very productive, several significant management problems became apparent as the practice grew. In particular, the infrastructure suffered and there was no governance. Infrastructure for a private practice is different from that of a corporate model. For example, in a corporate model individual departments exist with defined responsibilities to support the needs of the corporation and other areas of the entity, such as an IT department. Conversely, in a private practice when IT systems need repair, the responsibility falls to the administrator or manager, and this individual must know how to address and fix the problem. In this instance, the IT department and the owner of the practice were one and the same. Because of the proprietary nature of the software, outsourcing was not an option. The practice essentially was backed into a corner because of the lack of necessary infrastructure upgrades, such as in the case of IT. This dynamic created tension and frustration for the manager of the practice and the employees. The situation did not allow management to function normally in some instances.

The governance structure of the group required change after the solo physician hired the new neurologists. The new physicians had a more contemporary view of what a practice should look like and how it should function. This concern was the basis of many governance and trust problems. The IT and billing systems were grossly outdated, but the founding physician had taken great pride in his proprietary abilities and had not allowed changes. This attitude was prevalent in nearly every decision made, from what referring physicians the group would associate with to choices of staff. When decisions needed to be made, there was not a single voice for the practice, and this created confusion for the hospital and other referring colleagues. The group was resistant to appointing anyone as president and this habit had continued after the founding physician was forced out.

The physicians did not particularly like or trust each other. No one wanted anyone to become the practice leader or be the voice of the practice when building relationships with referring physicians. Each physician wanted to have his or her own individual PC and to run different revenue streams through the practice. All were secretive about their side deals. Employment contracts were never created and thus potential partner arrangements or what constituted partnership did not exist. Policies, procedures, and basic business documents, such as an employment manual for the staff, were never written or implemented.

Having access to neurological consultations on a 24/7 basis is a huge benefit for a Level 1 trauma hospital. The group was able to fulfill the need for the hospital; however, the outpatient piece of the practice suffered. Therefore, the hospital recruited three other physicians for the group to take over the out-patient portion of the practice. Due to the unstable relationship of the current physicians in the group, all three of these physicians subsequently left the practice, leaving the responsibility of finding replacements with the remaining physicians.

A requirement for smooth governance is the ability of the physicians, staff, and managers to trust each other. As the relatively new administrator of the practice you have come to realize that one of your first challenges is to bring the importance of governance to the attention of these physicians. You will also need to educate the physicians on the consequences of “going off on their own” and making arrangements on the side.

Discussion Questions

1. What are three organizational issues going on in this case? Which organizational theories do you think apply best to this situation?

2. Make a list of things you need to do as the new administrator and prioritize them. Provide a rationale for your list and priorities.

3. How would you gain the trust of the individual physicians in light of the fact they do not trust anyone on the staff?

4. What specific management strategies would you work to put in place?

5. How would you engage the staff to help the infrastructure gain strength?

6. What processes and dynamics need to be in place before starting the process of recruiting new physicians to work in the practice?

7. What objectives for success could you use in determining if governance was going in a better direction?

8. Can you see consequences to patient care with a fractured group? Explain why.