How to Navigate Change Through Leadership and Governance

By Chuck Falci

A wise man once said, “change is the only constant.” Nowhere is this more evident than the world of healthcare, especially when considering the trend of group consolidations, the ever-present reimbursement challenges from payors, and the CMS quality initiatives riding the crest of the most recent wave. These external changes often make groups reactive, and with no ability to predict or prepare for them. But, there is a more predictable and significant change occurring within physician groups over the next five years. This change will challenge the status quo. It will prompt a cultural change in radiology group practices. And, there is no avoiding it.

Does anyone Like Change?

With change, the future becomes less certain. People are forced to realize that their sense of control was mostly an illusion. Well-known author Gustavo Razzetti best described it when he said, “we fear the unknown because we can’t anticipate the outcome.” Often people prefer predictability because, at a minimum, change makes them uncomfortable. When things change, it’s hard to predict what will happen next…which means leadership must rise to the challenge. Brent Gleeson, a Navy SEAL and bestselling author, believes that “it is up to leadership to drive the change,” especially when dealing with culture change. If the external factors of group consolidations, payor negotiations, and CMS regulations seem challenging to a group’s leadership team, then it will truly be tested – and must step up – when the waves of culture change ripple through the practice.

A Generational Shift

The aforementioned “culture change”refers to a generational shift that began a few years ago. Many of today’s practices are comprised of three different generations working side by side and possessing different ideas, approaches, and work ethics: 1) Baby boomers, 2) Generation Xers, and 3) Millennials.

  • oThe Baby boomers, born between 1946 and 1964, are the oldest and most seasoned colleagues in a group, comprising about 43% of groups on average, according to data from Zotec Partners, the leading radiology revenue cycle and practice management provider in the U.S. Baby boomers are aging and retiring from the US workforce at a rate of 10,000 per day. This group continues to hold leadership roles in today’s practices despite their advanced ages. They are hard-working and career centric, and likely built the practice with the previous generation, the Traditionalists.
  • oIn many cases though, today’s radiology practices are also led by Gen Xers, the smaller generation born between 1965 and 1980 and comprising 44% of today’s practices on average. Gen Xers bring entirely different ideas to the table when it comes to core issues like communication, leadership, and work ethic. Because this generation has lived through recessions and tough job markets, studies have shown that they are not loyal to one organization over long periods of time. Instead, they seek a work-life balance and do not require as much interaction with their peers as other generations, preferring text messages and emails to in-person communication.
  • oThe much maligned and often misunderstood Millennials comprise 13% of radiology practices on average. Born between 1980 and 2000, Millennials are the biggest generation in US history, bringing equally “big” ideas with careers fulfilling one compartment of their multi-faceted lives. This generation is eager to contribute to the work environment and hungry for constant feedback. And while they only make up a small percentage of today’s radiology practices, it is predicted that in just five years they will replace Baby boomers as the generational majority.

So, what does this shift mean for radiology practices? It likely means that different ideas about issues at the core of the practice, such as scheduling, work ethic, communication, and decision making will change. Because Millennials have motivators, priorities, and goals that are different from previous generations, the way the practice currently thinks and operates will shift, resulting in a culture change that will transform the radiology groups of tomorrow.

Leadership is the Answer

Answering the question behind the uncertainty is leadership, which is essential to navigating the waters of change. Practice leaders who understand the values, motivators and ideas that are ingrained among the different generations can create a cohesive group of highly effective radiologists. It starts with understanding why each generation thinks and behaves the way they do, based on historical and societal differences. Steven Covey summed up this ideal nicely in “The Seven Habits of Highly Effective People” when he said, “seek first to understand, then to be understood.”

Understanding what makes each generation “tick” is a study in and of itself, and once a group’s radiologists begin to understand one another, they can more effectively hone in on each other’s unique and individual talents. For instance, Baby Boomers and Gen X’ers may discover that Millennials are adept in all forms of communication, in addition to their familiarity with technology, or that they may need and desire more coaching and feedback about from Baby Boomers who possess a vast wealth of medical experience. Millennials, on the other hand, may find ways to contribute to the practice that haven’t been discovered previously. These differences can be leveraged to strengthen the group instead of fracture it.

Governance Guides Change

If leadership is needed to navigate change, then governance is the compass used to guide it. By the simplest definition governance is the collection of corporate documents that was established to preserve the life of the entity while also protecting the rights of its owners, including the “Shareholders Agreement” and the “Company By-Laws.” These are the foundational documents that dictate how the practice will be run.

Many groups may be unfamiliar with these documents, only unearthing and cracking open the dusty pages when there is a disagreement amongst the shareholders or dissension in the ranks. Like a fire extinguisher, these documents are to be used “in case of emergency – break glass!” Often, these documents are unchanged from the time of the organization’s founding.

A Good Foundation

Practices cannot overestimate the value of having current, relevant and effective corporate documents as the foundation of the group and its culture. Remember, over the next five years the Baby Boomers will all but vanish from the workforce, and with them goes the “corporate memory” of what transpired in the practice when the original corporate documents were written. Before a tenet is dismissed as outdated, it’s a good idea to understand why it was included in the first place. Other compelling reasons to review and revise the corporate documents include:

  • Relevance to the state of the current practice (for instance, there may not be an office because the practice now outsources its billing)
  • Changes in local and federal laws that require updates
  • Changes to the manner which a shareholder enters the practice (such as diminishing a cash buy-in)
  • Changes to the locations your group services or owns
  • Updates for practices that have proven detrimental to the group (such as paying for tail based solely on tenure and not the cause for termination)

If practices consider the possibility that the documents could be more than 25-years old, then the need to review them is understood.

Voting Concerns

Another strong argument for taking the time to review and update by-laws in particular, is to see if voting rules need to be amended. The group’s opinion on which issues require a simple majority vote versus a super majority vote may need to be revisited. Consider the following decisions that will be dictated by the contents of the documents:

  • Vote required to change the compensation of the shareholders
  • Vote required to confirm the election of an officer
  • Vote required to take on new business
  • Vote required to approve an offer of employment
  • Vote required to terminate (both for cause and without cause)
  • Vote required to make an employee a shareholder
  • Vote required to determine whether a shareholder can move to a part-time status
  • Length of notice required for a shareholder to tender a resignation

Leadership should also consider whether on-line voting is valid or if a meeting is required, and whether each shareholder can designate a proxy who may vote on their behalf in their absence. Just to name a few.

The process of reviewing corporate documents is both tedious and time consuming. Practice managers and administrators are ideally suited to go through the pages and separate the key elements from the legal boilerplate, placing key elements and issues on the agenda, to be discussed and debated over the course of several meetings. Having full group participation and consensus is also essential to achieving the best outcome. Often too, a reference guide that details all the issues to be decided and the vote required to approve a course of action can be very helpful for moving things along.

Critical to this process and worth the investment, is retaining an attorney who is well versed in medical practices and their Governance. A sound legal team can counsel a practice about what is advisable, what is enforceable, and what is to be avoided. In some cases, practice managers can serve as liaison between the attorney and the group to control costs. In other instances, the group may want to hear directly from the attorney on matters of more importance. Whatever the case, groups should keep in mind that there is no one more adept than the author if the need to legally enforce the tenets of a document should come about. Finally, new physicians should be given access to the documents so they can better understand how things are done, and ways that the documents could be improved upon in years to come.

Again, these changes can only begin with current leaders, who have the power to transform the radiology groups of tomorrow, today.

Chuck Falci is a senior practice manager with Zotec Partners, the leader in radiology revenue cycle and practice management nationwide.

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