PCC recently hosted the second annual Supergroup and H/R Conference. Pediatricians from all over the country gathered in Chicago for 3 days of educational sessions and networking opportunities. Participants varied from those testing the waters to see if the Supergroup model would be a fit for their practice, to those who already involved with Supergroups for many years.
When you prepare to join or form a Supergroup, there are many questions to answer and steps to take. One of our experts, Susanne Madden, MBA and CEO of The Verden Group, discussed the logistics of how to form a Supergroup.
Get an overview of the Who, What, When, Where and Why of how to get started with the following highlights from that presentation.
Find others with a shared vision. The first thing you need to do is decide who to include in your Supergroup. Strive toward finding a group of people or practices who share an overall chemistry. A group of people with vastly different ideas around practice management, or wildly divergent philosophies around how to practice medicine may not be the best mix of individuals to include in a Supergroup. It is important to determine if you are fundamentally aligned while still in the early stages of planning so that you don’t waste time further down the road. For example, maybe some people want to add an asthma management program or nutrition services to the practice but others don’t. Have these conversations early on, so that you don’t dive deep into planning only to realize you are not in alignment.
Look for commitment. It’s important to identify whether or not there are commitment gaps among potential members. Is someone wanting to retire sooner than later? Does someone else want to start a family soon and work less? Don’t make assumptions about where people are at. Talk about it, and see how it can or can’t work.
Alignment is more important than numbers. Should the practices who want to join together all be the same size? Not necessarily. The more important thing is to ensure that you are philosophically aligned, and that every member has an equal voice in the process, despite how large or small their practice is.
Once you’ve decided who will join, then you can talk about what to do and how to make it happen. It’s important to determine what will be the same between all the practices in your Supergroup, and what will remain unique to individual practices. For example, H/R policies should be standardized across all practices, but individual practices could determine whether or not to charge for forms. Patients typically stay with the same practice location, so if one practice in the Supergroup charges and another doesn’t, it wouldn’t be an apparent policy difference.
Do your due diligence from a financial and clinical perspective. Before you form your Supergroup, do your research. Get informed. Know the facts of what you are getting into and who you are getting into it with. In essence, when you are forming a Supergroup, you are forming a member-based organization and you need to know everything you can about those members. Is a practice struggling to meet payroll? Are they routinely late paying their bills? Is there too much debt? Some debt is expected and okay, but you need to find out the backstory. Does anyone have malpractice suits pending? This can impact your rates as a group. Does anyone have missing data from their files that would create problems in the event of an audit? These are the kinds of questions you need to be asking, not to deem anyone wrong or to judge them, but to protect yourself. A malpractice suit is not necessarily a dealbreaker for inclusion in the Supergroup, but you need to know what you are getting into. Along the same lines, debt in and of itself is not necessarily a problem, and you may be able to work with that practice by suggesting strategies to lower the debt load. For example, maybe they have been overpaying for vaccines, and instead they could join a buying group to get better rates. Once you have the facts you can decide if you are still willing to move forward.
Make sure to understand the differences in pay structures between your practices while you are still in the beginning stages. One practice may be salary-based, while another is productivity-based. There is no right or wrong way to proceed. You may choose to keep the different structures in place in each location, or you may choose to centralize and have everyone work under the same umbrella. What is important is to discuss ahead of time and have a plan.
As you move deeper into the planning process as it relates to clinical integration, there are 5 key categories to consider:
1. Legal Formation
When you are ready to “marry” your practices together, you will want a good lawyer who has done this kind of thing before and is well-versed in the Supergroup model. It’s not that typical or common yet, and there is a lot of nuance that the right lawyer will know about and be comfortable navigating. They will be able to highlight the things to pay attention to, and facilitate a group discussion about them. It’s also a good idea to hire one lawyer to work with the all the practices rather than having each practice hire one separately. Choose someone with a nationally stellar reputation who is neutral, and not someone who has worked with one of the practices previously and may have a bias.
2. Governance Structure
The way you will govern your new organization will be up to you. It may feel like you are becoming more corporate and less independent by joining the ranks of a Supergroup, but you must remember that you are still an independent organization, and as such, you are driving the bus and can set it up in any way you see fit. That said, inform yourselves with as much knowledge as possible so that you can do it well.
3. Payer Contracts
Supergroups often have greater negotiating power than individual practices. You may be able to negotiate better payer contracts right off the bat, or you may be able to do it down the road, after you have been established as a Supergroup for a longer amount of time. Some Supergroups negotiate contracts on their own, and some use a third party to do it on their behalf.
4. Technology Platforms
When you form a Supergroup you will be bringing practices together that may be used to running on different technology platforms. Although each practice could technically keep their own separate EHR, it will greatly benefit you to streamline operations by agreeing on one EHR for everyone to use. This will create consistency and get everyone on the same page. This is especially good if you have providers who will work at more than one location. Learning one EHR to use in every location is much easier than needing to switch between different ones depending on which office you are in.
5. Plan B Options
Better to have a plan you will never need, than to need one and not have it. Developing a worst-case scenario plan to use in the event of something not working out is the smart thing to do. Everyone may go into the planning process feeling inspired and trusting that everything will go well, only to have it all unravel very quickly if there are unmet expectations or road blocks. What happens if the president of the Supergroup suddenly falls ill or has an accident? What if the office gets flooded or otherwise destroyed? What if your group is the victim of a cyberattack? What if there is dissension among staff? The process of creating a plan B will help you identify what is most important to the individual members of your group. What are people worried about? What are their fears? Run various scenarios to see how you would handle them as a group. This can help you offset problems before they escalate into a situation where you would need your backup plan.
Once your group gives the green light to move forward, you need to establish a target Go-Live date. Most Supergroups take 12-18 months to form. It is technically possible to form more quickly, but you run the risk of losing money due to not taking the necessary time to fully prepare and cover all your bases.
As you start the process, it can be helpful to:
- Develop an implementation plan for the timeframe you are working within
- Itemize work to be done by category
- Set goals or project milestones to help you stay on track
- Create committees (e.g., Financial Committee, H/R Committee, etc.)
When it comes to location, there is no cookie-cutter answer as to where you should situate your Supergroup. There are many iterations of how to do it. Some Supergroups are under one roof, and some are spread across multiple locations in one city. Some can even be in separate cities. However, there are some questions you can ask when deciding on location:
- Are you in a neighborhood where patients are aging out and young families are not moving in?
- If your Supergroup has multiple locations, do you want your billers and H/R staff divided between locations, or do you want them in a centralized facility?
- Are you in an area that patients can easily access? Do you have parking, are you close to places where your patients might already be spending time, such as schools?
As with any big change, it’s important to know why you are doing it before you take the plunge. One of the things that can be attractive about forming a Supergroup is the ability to maintain some autonomy within the context of a group, as opposed to the lack of individuality that can be a byproduct of working for a large (non-Supergroup) organization.
Don’t set out on a mission to form a Supergroup if your main intention is to get better rates from payers. The worst reason in the world to form a supergroup is better rates. Fee-for-service (FFS) is dying and value-based care (VBC) is on the rise. Payers want to pay for quality care. That said, there has to be a value proposition in order to get that payment, and that can take time to build. You won’t form a Supergroup and immediately begin to receive better rates, so you need reasons beyond that as your main motivation to form a Supergroup.
So, if not to get better payment rates, then why do it?
- Strength in numbers. A larger group will have more weight when doing things like negotiating for better rates from payers.
- Shared resources. Necessities such as supplies, equipment, and even office space can be shared. Think about centralizing your business functions to include H/R, payroll, billing, marketing, etc. all under one roof.
- Lowered expenses. Overhead goes down when spread out across the Supergroup.
- Increased clinical quality. With a larger group, you can provide many additional services that will increase the quality of care for your patients. Services to consider adding include:
- after-hours appointments
- lactation services
- nutrition services
- behavioral health services
But at the top of the list for everyone involved should be preservation of independence. Lower costs are great, but those should be regarded as perks. Maintaining independence should be the prime directive.
In conclusion, there is a lot to tackle at the front end of Supergroup formation. But once the ball is rolling, most Supergroup members will tell you that the benefits are greater than they originally imagined, and the opportunity to stay independent is well worth it.
For more information on PCC’s Supergroup and H/R Conference, visit www.pediatricsupergroups.com
To learn more about how PCC can be a partner to your Supergroup, contact firstname.lastname@example.org.