Governance Structure Optimization
Many health systems that have spent years building a critical mass of providers now find themselves in a reactive position to physician’s needs. The result may be that the physicians are not adequately integrated into the organization, lacking a unified voice. The system may need a robust governance structure to organize the physicians into a cohesive group.
Other physician enterprises, including formed medical groups and private practices, may require an outside perspective on an established governance structure to ensure effectiveness and consider different vantage points.
Governance tenets are guardrails for a decision-making process. That course of action is critical to the success of the physician enterprise as both a mechanism to set policy and as a significant component of physician engagement.
Governance and management are different competencies. Though they are commonly thought of together, they serve vastly different needs. Governance is the “25,000+ foot view” and is used to govern physician activities through reserve powers. Additionally, governance is used to hold final authority over strategic initiatives, compensation planning, and budgeting needs. Management is the “25,000 (and under) foot view” that provides advisory input into governance bodies and deals with day-to-day operational issues, such as physician communications, accountability meetings, and other matters that arise during daily activity.
Both governance and management serve critical functions in the physician enterprise, but governance sets policy that provides the vision for the management team to enact, and a shared vision is the cornerstone of aligned priorities. Once established, strategic planning, operational tactics, and aligned incentives can be addressed, which are all necessary to unify physicians and engender success.
State regulations, tax structure, and local nuance are among the various factors to consider when thinking through the legal requirements for appropriate governance structures. Often a Medical Group/Physician Enterprise Board will constitute the governance structure that reports to the Health System Board, but the entity’s size and legal characteristics will ultimately influence the guardrails for different scenarios.
Our team of advisors is equipped to help evaluate current governance structures, assess their effectiveness, and implement the changes necessary for optimization. Whether a review calls for a span-of-control analysis, subcommittee formation, or physician engagement, our experts have spent years serving in compliance, physician enterprise, and hospital leadership positions that are necessary to lead the charge. We’ve lived the journey that is the pursuit of the high-performing medical group and can help your organization achieve this success.