Bringing Physicians & Business Decision Makers Together
A Q&A with Chief Executive Officer Eric Passon & Chief Medical Officer Josh Honaker
The secret to Ancore’s success has always been curiosity. We ask questions, we discuss, and we seek clarity through healthy debate. This philosophy allows us to think differently
Our operations manager, Casey Donnelly, hosted a Q&A with founder and CEO Eric Passon and Chief Medical Officer Josh Honaker. Dive in with us.
Casey: Explain the pros and cons of strong relationships between physicians and business decision-makers.
Josh: For each of the entities, it depends on their history and culture. For example, if the entity has always employed physicians, there maybe a different mindset than those new to that model. The relationship may be strictly transactional. It serves the purpose of growth and protecting market share from encroaching competitors. I think it also greatly depends on the view leadership has from their personal experiences working with physicians. Those who worked hand-in-hand with physicians early in their career tend to be more relationship-centric. If they’ve been largely removed from such a working relationship, I believe it’s less collaborative. In a nutshell, the biggest pro is that these can be powerful relationships if fostered through trust, patient-centricity, transparency of metrics, and shared decision-making. The con is that the relationship can be frustrating and rife with friction if there’s an opposite approach.
Eric: Health systems win on mission and purpose. However, their compensation plans are typically disconnected from these core values. That invariably creates misalignment with strategic and financial goals.
Physicians tend to enjoy independent medical groups because they believe in their purpose and do business within their means. The issue is more related to cash-on-hand for investment in new technology and diversified revenue opportunities while under investing in strategy and analytics.
Corporate entities are often under pressure to grow and compromise on principle then, paradoxically, struggle to scale the business. With that said, they are open to outside-the-box relationships and want physicians to have an equity stake in the larger organization, which can create stickiness.
Casey: What can leaders do to seek alternatives to the traditional wRVU compensation plan?
Eric: Our philosophy is that physician compensation should be aligned with the mission, strategy, and financial goals of the organization. Otherwise, you are living a lie.
The first step is bringing physicians back to the business table. Give the front-line physicians and administration airtime to discuss perception versus reality in an open and productive environment. Then, build a compensation plan that is market competitive, financially sustainable, and rewards achievement of strategic goals. In fact, we recently helped one health system’s primary care group shift from wRVUs to panel size, and they’ve seen remarkable engagement from physicians.
Josh: Leaders must first ask the question: what do you want to accomplish with your compensation model? Eric often says, “you get from your comp plan exactly what it was designed to generate.” What is important to the organization? What model does leadership value?
There is always the hybrid approach where leadership can align with quality and patient experience. This would provide a base salary that sets expectations for all physicians, along with tiered metric-based bonuses and productivity. Productivity can be measured in a few different ways: wRVUs via billings, patient visits, and probably even better panel size. The latter is all the more desirable for managing physician workload, ensuring quality of care, and achieving value metrics if dollars are tied to risk.
Casey: How can you reduce variability in performance and find financial opportunities?
Eric: This is easier than most people think… you can reduce variability by unblinding performance data and sharing consumable performance reporting with physicians and practice managers. CELEBRATE good performance and promote shared learning from those practices and physicians who have figured it out. If you are using reporting to identify poor performance and those are the only conversations you’re having with physicians and practice managers, it will become increasingly challenging to retain and recruit quality front-line staff. This is every bit of a morale issue as it is a financial opportunity.
Josh: I agree that transparency of unblinded data can remove some of the variability and is key to accountability and improved performance. Centralized, standardized operational support that ensures physicians have what they need to function at the top of their license is key. Also, recruiting physicians who best fit your culture and having dyad physician leaders who can assist with accountability and collaboration to get shared, predictable outcomes for patients and the parent organization are critical.
Casey: What does the growth focus change - moving to grow loyal lives mean for medical groups?
Josh: I think it means a lot of things: change in culture, mindset, management style, physician approach to work, etc. It means the future for most medical groups and will be key when patients, employers, and insurance payers are on the same page expecting results and value for the money they’re spending on healthcare.They don’t want to keep paying for the volume of work vs the volume of value. Loyal lives will come from easier access, great service, and quality. Physicians also thrive in groups where they are valued and at the table as partners in the business decisions.
Eric: Growth in the traditional sense has always been viewed in terms of service line growth or specialty volumes or IP/HOPD volume growth in a market. But switching to growing lives suggests that medical groups must start paying attention to the lives managed, regardless of if you are in a VBC program or not. If you are focused on wRVUs instead of risk-adjusted panels for all lives you are managing, you may wake up and realize your payer mix is eroding, and you’re slowly getting cut out of certain networks. Also, focusing on the growth of lives is more aligned with the mission statement on your website. From my experience, I have also seen this be a morale booster with primary care physicians.
Casey: You’ve said patient access is a multi-faceted issue. Can you expand?
Eric: Investing in patient access is good in a FFS and VBC revenue model. So why, like physician compensation, is it a struggle for many organizations?
To get patient access right, you must have full buy-in across the organization:
• Physician buy-in on scheduling templates
• Proper delegation of patient questions, adequate physician staffing
• Incorporating tele-health standard workflows
• Use of AI/LLM to predict no-shows and cancellations
• Appropriate data capture of referrals
Just to name a few. The purpose of your patient access department should be clear.Its success depends on all the parts and pieces within the organization being aligned with its purpose.
Josh: Patient access is one of the top two challenges we hear from every group. It’s complex, and I believe struggles or thrives are based on the following variables:
• A patient-centric culture
• Adequate resources—technology, operational support, and enough clinicians to meet the need
• A clean, actionable playbook
Healthcare systems and medical groups are on varying points of the spectrum, from naive to mature. Most are somewhere in the middle, trying to fly the plane while building it. We believe in a few tried-and-true guiding principles and strategies. Ironically, the greatest challenge for a high-quality clinician, medical group, or healthcare system is that patients want to go to “the best,” so it doesn’t take long to fill up capacity. When this occurs, the only way to manage such a good problem is paradoxical to how business leaders and healthcare administrators tend to think, which is to limit growth and to say no more. To optimize access, quality care, patient and clinician experience, we have to limit access to new patients and take care of the panel we’ve been entrusted with. This was probably the first big lesson I learned when I started my first private practice. Great practices and great physicians were losing patients to me because they had no access and I had plenty.
Casey: How do provider organizations balance purpose and profit?
Josh: As much as I know this is a challenge, I also think it’s quite easy. The Management Lessons from the Mayo Clinic is probably the most impactful healthcare business book I ever read. Why is the brand so great, and how do they balance purpose and profit? To me, there’s only one answer when it comes to healthcare: patient-centric care and supporting those who care for the patients. If you do this, the money will follow. The administration team has to be sound fiscal stewards and strong operators, but the overall purpose and profit are balanced from the boardroom to the exam room.
Eric: Given the importance of engaged physicians in terms of the business of the practice, we believe physicians should be in tune with the meaning of “what is financial sustainability for my organization.” If you are preaching the mission statement on the website, but the physicians are in the dark about the strategy and what financial sustainability means, it sets the organization up for missed expectations and difficult conversations when times are tough. I can’t think of a time in my career where being transparent with physicians about what financial sustainability means for the organization wasn’t a galvanizing experience for the organization. In every situation, most physicians, especially physician leaders, want to do the right thing and often have solutions to the problems facing the organization. But void of reliable data, everyone creates their own reality.
Our Medical Group Diagnostic paves a clear path towards financial sustainability.
Interested in learning more? Contact us now.