By Dennis J. KainFACHE, Tyler & Company President with Adam L. Myers, MD, FACHE, former Senior Vice President and CMO, Methodist Health System, Dallas, Texas

As healthcare reform ensues, we see a transformation in the role of the Chief Medical Officer (CMO). Today’s physician executive is much more of a strategist, someone who influences physicians and health system leaders to create working relationships  that benefit everyone. These physician leaders now are involved in designing and implementing the strategic goals of the organization, as well as addressing daily operational issues. CMOs are creating alignment and successfully achieving superior clinical, strategic and operational results for their organizations. 

Tyler & Company is committed to advancing the careers of physician leaders, and we believe that more of these executives will become CEOs as hospitals and healthcare systems continue to value their practical clinical experience along with their business and leadership acumen. 

Kain: What have been the historic roles of a Medical Director, VP of Medical Affairs or CMO?

Myers: In my view, traditional physician leadership roles were predominantly elected terms as either department heads/medical staff presidents, or in many cases, that of administrative figureheads. Most of these were relatively limited in depth by several factors. Rarely equipped with leadership training, elected medical staff leaders’ primary focus often was their personal practice; their elected term limited their period of positional influence.

Appointed figureheads usually were not given significant strategic or operational responsibility. Their scope of influence was at times relegated to palliating the medical staff to administrative policies by having “one of us” on the administrative team. Oftentimes, they were respected clinicians nearing retirement and looking for a graceful exit from professional life. However, they lacked the skills and motivation to make a substantive difference.

Over time, forward-thinking organizations learned from those physician-led (or founded) organizations. Namely, that clinicians could develop significant business and leadership acumen to complement their clinical credibility. Now the norm is for physician executives to have operational responsibility for multiple departments, including quality, case management and health information management. In my opinion, the new world of tighter margins and longitudinal population management necessitates robust leadership by physicians who exhibit comfort equally in the boardroom and the bedside.

Kain: Why is it important for physician leaders to maintain clinical involvement?

Myers: The C-suite already has an astute business team. But there’s a void in leadership augmented by clinical experience and credibility. Maintaining clinical credibility sets physician executives apart from their nonclinical colleagues and positions them to lead into the future.

Kain: How would you define the different audiences you’ve worked with?

Myers: On any given day, I interacted with patients, doctors, nurses, pharmacists, in-house legal counsel, vendors, students/residents, nonclinical staff from a variety of disciplines, board members, administrators, the media, potential donors and external regulatory representatives.   

Kain: Given the breadth of audiences you describe, would you explain how you bridged the gap between the medical staff and your C-suite colleagues?

Myers: To be successful, CMOs can only lead other physicians by influence, not position. Doctors tend to be very independent, and employment does not necessarily change that dynamic. Therefore, the role of CMO is very relational. It takes great time and effort to influence doctors to make significant changes in practice. You’ll burn your ability to bridge the gap if you default to leading by position. 

Many (but certainly not all) C-suite executives tend to be transactional. Hire this FTE ... check. Renew that vendor contract … check. Change that HR policy … check. The difference in orientation can be quite real and a strain for CMOs. We are wise to be proactive in pointing to the relational nature and the value of our work.
 
Medical staffs and administrators will not always see eye to eye. The physician executive stands precariously with one foot firmly planted on each side of the fence. The delicate nature of this position can lead to splinters in some sensitive areas. We find ourselves translating for groups that at times figuratively speak different languages. Comfort with the uncertainty of this constant push/pull balance is key to satisfaction as a CMO.

Kain: How does disease management differ from population health? Will it be possible for providers to be paid based on a specific reduction of a given disease in a population?

Myers: Disease management focuses on the individual patient. Population health focuses on improving outcomes for groups of people. Not only will it be possible for providers to be paid in a new way, it already is a reality via shared savings models permitted by the Affordable Care Act.

Kain: Do you anticipate the government’s payment system will compensate for cost reduction?

Myers: Yes. Methodist launched a Center for Medicare & Medicaid Innovation Accountable Care Organization (ACO) pilot program that emphasized improved quality outcomes and shared savings for the entire population assigned, not just the individual patient.

Kain: Once Methodist was approved as an ACO, what were your initial areas of focus? 

Myers: After drilling into claims data for assigned patients, it was discovered that the majority of high-dollar claims, comorbidities and excessive utilization were linked to a discreet set of diagnoses. The proactive longitudinal management of these disease states in these patients was what was necessary to improve their quality of life and begin to bend the cost curve of medical expenditures. Also, while hospital management already was lean compared to national and regional norms, post-acute costs for this region were significantly above national norms; that quickly became an initial focus.

Kain: What does the future hold for a CMO?

Myers: It’s a great time to be a physician executive! The challenges of longitudinal population health and the subsequent need for tight physician alignment ensure opportunities for skilled physician executives. The challenge is meeting the demand in an era of pending physician shortage.  

We entered medicine to make a difference in the lives of those entrusted to us. I feel blessed to face the new challenges of healthcare in a prime position to make that difference for not only patients and communities, but also providers.   

Reach Dennis J. Kain, FACHE, President, at  +1 610 558 6100 or dkain@tylerandco.com.