Tuesday, September 19, 2006
Learning from adversity: diary of a medical manager
University Mednet is a 120-physician, multispecialty group practice located in the northeastern part of the Greater Cleveland area. In 1966, when I joined the clinic as a general and vascular surgeon, there were 25 physicians and dentists. The governance consisted of a board of trustees with an internally elected president who practiced medicine full-time and who was not involved in day-to-day management. The administrator was not a physician. The physicians practiced under the same roof, utilized the same billing services, and covered each other on nights off and vacations.
During the ensuing years the clinic grew and prospered, as did my career. I gradually became interested in participating in the governance of the clinic and, in 1971, succeeded in getting elected to the board. I served in that capacity for 14 years. Although relations between clinic and nonclinic physicians at our local hospital were never very good, particularly after we started our HMO, I managed to get myself elected chief of surgery and eventually chief of staff, the first clinic physician to serve in that capacity.
Two events were pivotal in shaping the clinic prior to the 1980s. The first was our decision to build a clinic facility in Mentor, a community 20 miles from the main clinic building. Subsequent growth has confirmed the correctness of that decision. The second major event was the formation of our HMO, which occurred in 1978 as a joint venture with the local Blue Cross/Blue Shield organization. This also was a fortuitous move, and, on more than one occasion, it saved the day for the clinic financially.
In the early 1980s, the clinic was run by an administrator who did not have the abilities of the prior one. He could not deal well with physicians, his management abilities were questioned, and he failed to develop the trust of both his staff and physicians. The CEO and president of the board was a physician who had been elected to the board in the late `60s. Initially, he practiced medicine full-time, but, as time went on, he gradually worked part-time in medicine and part-time in administration. He had no real experience or formal training in administration but learned on the job, as the rest of us did, with help from various ACPE courses that we all took.
During this time, the clinic seemed to be doing fairly well, in spite of a lack of capable administration. The executive director finally left and, for one-and-one-half years, we had no executive director. Yet we dramatically improved our pension plan, instituted profit-sharing plans, started a car and gasoline allowance, and instituted better insurance plans. Our auditors were beginning to tell us that. we needed to make significant improvements in the way that we ran the business, but in the face of healthy profits, we saw no need to make any drastic changes. However, we did hire a new executive director in 1984.
Starting in 1983, we began to show operating losses. In spite of these losses, we continued to give physicians increases in their pay. Finally, in the summer of 1985, we recognized that we were in trouble. Many were not happy with our executive director, and many were not happy with the job that the CEO was doing. A physician pay cut was looming on the horizon and our bankers were telling us that we were tapped out.
In June 1985, an off-campus meeting was held by the board, without the CEO or administration present, and it was decided we should meet with the CEO and inform him of our concern with the way things were going. We had doubts about the capabilities of the executive director, were troubled about the financial position of the clinic, and sensed a lack of confidence in the leadership of the CEO.
Another off-campus meeting was held with the CEO present, and he was informed of our concerns. We agreed to his request for full-time status in administration, with the understanding that he would become more involved in the day-to-day running of the clinic. We gave him a one-year contract to do just that. Unfortunately, a few months later he developed some cardiac difficulties requiring hospitalization and some time off. Upon his return, things did not improve, and we felt that he was no longer an effective administrator. He had been CEO for many years and had accomplished a lot during that time, but we felt that a change was in order. We were not sure about the executive director, but we felt that change had to start at the top.
A third off campus-meeting was held in early December at which we decided to dismiss the CEO. After volunteering, I was elected to fill that position. We met, once again off-campus, with the CEO present, and he was relieved of his duties. I read a prepared statement to him, explaining why we thought a change was necessary and telling him I was taking his place. He asked if there shouldn't be a transition period, but we felt the change should occur immediately.
I think that, when such events occur in physician organizations, the initial reaction is to have an internal person assume the position. That person is a known quantity, is a physician (in this case), and is one of us. If the person also seems to have some leadership ability and, most important, the respect of physicians, it would seem logical to have him step up and take charge. Of course, that person must want to do the job.
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