Over the years, I have witnessed some minor disasters that could have been averted with a little better communication and planning. Some of these nightmares were of my doing. Some were by other overconfident leaders who could not find the time nor self-discipline to engage in the fierce conversations that were needed to avert them. But bad things can happen when you fail to communicate consistently.
One of the more common traps I've seen involves the contract termination of a well established hospital-based group. This most often occurs with emergency medicine, hospitalist, anesthesia or radiology groups. Either the group is unhappy with its old contract, or hospital executives are dissatisfied with the group's performance. The CEO, COO or CFO, following months or years of frustration, declares in a closed senior executive meeting, “we need to look for a new group!”
These failed transitions cause chaos in the involved patient care arenas, unhappy medical staff and delays in care. Several conditions exist that lead to this political nightmare for the CEO and board.
Here are some of the factors that contribute to these breakdowns:
- Entrenched physicians who believe they are “untouchable” due to longstanding contracts;
- Physician leaders who do not understand basic planning and contract management concepts, running their groups like a small practice rather than the multimillion dollar enterprise that it is;
- Executives who have failed to have candid conversations with contracted groups about what they expect and the consequences of not meeting their needs;
- Hospital executives making decisions based primarily on financial considerations without fully exploring the political, community and public relations impact of their decisions;
- Hospital leaders who use the excuse that contract issues are confidential and not sharing performance concerns with medical staff leadership and other physician leaders; and,
- Both sides failing to participate in regular, ongoing meetings to share data and discuss concerns.
When You Fail to Communicate
The crux of the issue often comes down to communication – ongoing, regular, authentic, sometimes difficult, communication.
This scenario is now playing out in Akron, Ohio at the Summa Health System. It is a clear example of what happens when planning and communication break down.
The story erupted in late December, 2016. It suddenly became apparent that the professional services contract between Summa Health Systems and Summa Emergency Associates, which had provided ER coverage for multiple Summa hospitals for decades, was ending on December 31. Without an extension in place, the CEO, Thomas Malone, MD, arranged for immediate staffing of the ERs by another contracted group, US Acute Care Solutions.
This story hit the news in late December, 2016. My short synopsis is based on the following articles:
- Summa CEO says he is hurt by no confidence votes
- Examining the two year tenure of Dr. Thomas Malone
- Parties in Summa dispute agree on little
- Summa CEO pledges to improve relations…
Most of the medical staff at the hospital was apparently not aware of the impending change. There was ensuing confusion, delays in patient care and upset hospital staff and physicians. There were allegations on both sides that the other party was not working in good faith and not making reasonable concessions needed to reach a new contract.
Medical Staff Fallout
In the midst of the chaos, a no-confidence vote was taken by some of the medical staff. Included was a request to the board to replace Malone as CEO.
The board supported Dr. Malone. It also published a statement that listed several steps that would be taken to improve relations with the physicians and contracting processes in the future. The changes adopted by the board are described in Summa announces changes after ER transition concerns.
This is the kind of event that can be career-ending for a CEO. Without knowing what exactly led to the kerfuffle, I can't blame Thomas Malone for the poor transition. But this is the kind of problem that effective leaders tend to avoid. With effective planning and communication you can avoid them too.
Here are a couple of steps you can take to avoid last-minute contract issues:
- Send a written letter acknowledging that the contract is ending in 6 months, and schedule monthly meetings to prepare for the transition, or for signing a new agreement.
- Involve your board, your colleagues, the medical staff and your employed physicians in the discussions about impending contract negotiations, early and often.
I suggest you review the events in Akron in order to understand what happens when we fail to communicate consistently and candidly with our partners and don't take impending deadlines seriously.
Then tell me in the Comments what you may have done differently to avoid this fiasco at your hospital.
For more of my thoughts on healthcare and leadership Subscribe here.
Please help me out by taking a short survey: Survey Page
Feel free to email me directly at firstname.lastname@example.org with any questions about anything. I am here to help you excel as a physician leader.
If you like this post, please share on your social media using the SHARE buttons below.
Thanks so much and see you in the next post!