MGO’s Exploration of establishing a new Multi-Specialty Medical Group (MSMG)

Outline

1. Background
   1. Strategic Planning by MGO’s Board
   2. Task Force Appointed
   3. Task force Observations
      1. National Trends for Physicians
      2. The Delivery System Matters
2. Goals, Principles and Vision for Formation of a new Multi-Specialty Medical Group
   1. Goals
      1. For Patients
      2. For Employers and Community
      3. For Physicians
   2. Guiding Principles
   3. Medical Excellence through Physician Integration
   4. Vision
3. Implementation
   1. Implementation Plan
   2. Current Progress

Background

Strategic Planning by MGO’s Board

• Dramatic changes continue to occur throughout healthcare
• A significant component of the change occurring in healthcare is the continuing consolidation and modernization occurring in most segments of the health system
• Most physicians continue to operate as craft persons in a cottage industry
• Physicians are struggling with increasing business and economic challenges
• Purchasers and consumers are increasingly demanding high value for the price they are paying for healthcare
• There are increasing demands on physicians to demonstrate value and quality

Task Force Appointed

Task Force Observations

National Trends for Physicians

• Expectations that care provided by physicians be clearly evidence-based
• The growing expectation that physicians make use of information systems to improve care delivery and to provide more detailed and timely information about quality of care
• “Value based contracting” and “pay for performance” strategies that include financial incentives based on quality indicators
• The development of preferred provider networks based on both cost and quality indicators
• Increasing costs for physicians in operating their practices
• Declining numbers of physicians practicing in solo or very small groups
• Expectations on the part of new physicians for more manageable work schedules and increased quality of life
• An increasing number of procedures done by physicians outside the traditional hospital “workshop”
• An increasing reliance, particularly by primary care physicians on “ancillary” revenue to bolster operating margins

The Delivery System Matters

• Better coordination of care for patients – patient centered care
• The ability to make more effective use of advances in information technology (IT)
• Increased access to IT across the spectrum of care, from ambulatory to inpatient settings
• A structure which allows physicians to more effectively take part in “value-based contracting” and quality improvement
• Increased use of teams to make use of performance and outcome measurement for quality improvement
• Reduced administrative burden and hassle

Goals, Principles and Vision for the Formation of a new Multi-Specialty Medical Group (MSMG)

Goals for the Multi-Specialty Medical Group

For Patients

• Continuity and coordination of care across multiple conditions, services, and settings over time.
• Care coordination among medical specialties and non-physician care givers
• Patient centered care – patients as active, informed participants in their own care
• Evidence based care processes
• Development of effective teams for delivering care
• Shared physician and patient responsibility and accountability for patient care
• Accessibility and “one-stop” convenience
• Establishment of a “Medical Home”

For Employers and the Community

• The ability to demonstrate value and to measure quality
• The ability to control costs and increase efficiencies
• Ease of access for employees
• Support for prevention and wellness
• Disease and chronic condition specific resources
• Coordination with employer-driven health and wellness programs

For Physicians

• Independence of clinical decision-making that is evidence-based
• Benchmarking, best practices, and peer review
• Recruitment and retention of high quality physicians
• Self-governance
• Financial security
• Reduce administrative burden and hassle factor
• A work environment which results in personal and professional satisfaction
• Market based physician compensation
• Leadership development—a practice environment supportive of and seeking to enhance skills, knowledge and experience of physicians’ clinical and management abilities
• An infrastructure which supports patient safety, reduces medication errors, cuts costs, and improves communications
• Affiliation with, and ready access to, a group of physicians recognized for providing medical excellence
• Access to capital or support of their practice including availability of the appropriate medical equipment and technology
• Easy access to comprehensive integrated ancillary network

Guiding Principles for the formation of a Multi-Specialty Medical Group

• The development of a multi-specialty medical group (MSMG) will be based on the belief that the most important relationship in healthcare is the relationship between the patient and the physician . This relationship must be supported through a structure and systems that create the best possible environment for both the patient and the physician
• MSMG will be physician led
• MSMG will be built around a core of primary care physicians
• The primary care core will be supported by specific specialty and sub-specialty physicians appropriate to the population cared for by MSMG
• MSMG will provide a Medical Home for all of its patients
• MSMG will be developed in a way that encourages the development of a group culture , characterized by the ease of information sharing, cooperative and collaborative problem solving, a focus on providing continuity of care for patients; a learning environment which encourages sharing of best practices, and a collegial atmosphere which promotes personal and professional satisfaction among the physicians
• MSMG will have a single identity (brand) in the market
• MSMG will maintain fiscal integrity
• There will be physician developed and uniformly implemented standards of practice and consistent systems of care
• There will be a focus on having the very best information systems and technology to support high quality care

Medical Excellence through Physician Integration

Clinical integration includes the consistent delivery of high quality care at all sites, from outpatient ambulatory care through acute inpatient care, as well as consistent communication and cooperation among physicians and between physicians and all the members of the health care team. True medical excellence is achieved through all providers, in all settings, working together, sharing information, and ensuring that the right care is provided in the right setting by the right provider at the right time.

The model for the multi-specialty medical group includes and expands on these same characteristics of clinical integration and further enhances them by achieving an even higher level of financial and business integration. Financial and business integration is the integration of systems, business practices, policies, and infrastructure to act as one entity (a single tax ID), particularly in developing relationships and new partnerships in the business community.

The multi-specialty medical group will be integrated in its business structure so patients and the community experience it as a consistent provider of health services throughout greater Columbus region. The end result of successful financial and business integration is that patients and communities throughout the market perceive the multi-specialty medical group participants sharing the brand as a “seamless” provider of health services.

The Vision

The purpose of MSMG is to create the optimal practice model for patient care and care coordination, while providing the physician with a practice environment which provides professional satisfaction and financial security.

The development of the group will be incremental and evolutionary, beginning with a core of primary care physicians. However, the vision for MSMG is to be a multi-specialty group practice. In order to be true to the vision, there will need to be incremental progress toward practice settings befitting a multi-specialty group practice.

The model will need to be both distributed and centralized. Primary care and specialty care appropriate to the population need to be easily accessible to the community. Other specialists and sub-specialty physicians and equipment and resource intense health services may need to be increasingly centralized. The optimal office setting is considered to be small groups of physicians (4 to 8), working as a team and sharing resources. However there may be multiple teams at any one site, particularly for high intensity specialty and subspecialty services. The group may also make use of itinerant specialists who visit multiple sites over the course of a week or month in order to make specialty services more accessible.

IMPLEMENTATION

Implementation Plan Outline

Step II – Physician Interest and Due Diligence

• Discussions with Interested Physicians
• Execution of Letters of Interest
• Due Diligence Processes
• Prepare Pro Formas

• Establish Infrastructure/Management Capability (MSO)
• Secure Financing / Working Capital
• Preparation of Stock Offering/Legal and Accounting

• Execute Physician Transactions
• Form Governing Boards (Medical Group and MSO)
• Operationalize MSO Services
• Operationalize Medical Group

Step II is in progress. MGO’s management team is conducting meetings with a variety of primary care practices to educate them about the opportunity and to see what portion of them may be interested in participating in forming the group. As noted above, PCPs are being approached first to develop a core, a base around which to build the other specialties. After a significant portion of the primary care physicians have been educated about the opportunity and a number of them are ready to move from the conceptual framework, letters of interest, due diligence and financial pro formas will be completed.

Steps III and IV will follow the successful completion of Step II.

Additional information will be added as the process continues. If you have questions or desire additional information, please contact MGO.