Organizational synergy in medical groups - Health Care Organizational Structure

Physician Executive, May-June, 2000 by Bernhoff A. Dahl

SINCE THE DAWN OF time, the basic form of human interaction and endeavor has been one of hierarchy, with power and control focused on a central figure, be it a chieftain, king, or a religious, political, or military leader. Historically, in the practice of medicine and the healing arts, however, the most common pattern was the solo practitioner. In the mid-1800s, due to the expanding knowledge base of medicine, physicians started to aggregate into groups focused around university and religious hospitals. These medical groups also followed a classical hierarchy that has characterized academic, religious, political, and military organizations.

A hierarchy (from the Greek hierarchia, the power or rule of a hierarch) .s defined as an organizational design wherein a group of individuals is arranged in order of rank, grade, or class, and is led by a hierarch. In turn, a hierarch (from the Greek heirarches, a steward or keeper of sacred things; hieros, sacred, archos, a ruler, from archein, to rule, lead) is the leader.

Hierarchy tends to support the needs and desires of both leaders and followers. Leaders seek power and control, followers want stability and order. Hierarchies can survive through generations and even span centuries through the development of monarchies and dynasties.

During the 20th Century, however, in business and professional organizations, there has been a trend towards "flattening" the multiple levels of hierarchies, as well as empowering selected workers and groups. These modifications, best seen in the concept of self-directed teams, have sewed to release energy and creativity, rationalized productivity, and improved morale. (1)

An organization is a coordinated entity of more than one individual that can pursue tasks that cannot be successfully completed by one person working alone. (2) Synergy is the close coordination of the efforts and resources of individuals working together so that the performance of the whole is greater than the sum of the parts. Although the term originated with the ancient Greeks (from synergein, to work together), its modem use has focused around medicine, wherein synergy is defined as "the combined or cooperative action or force, as in the combined or correlated action of different organs or parts of the body, as in performing complex movements or the combined, correlated action of two or more drugs." (3)

The benefits of synergy

In 1971, just out of residency training and government service, the author became an associate pathologist at a 350-bed tertiary care medical center and was, unexpectedly, appointed Chief of Pathology. The primary challenge of this "higher" position of power and opportunity was to design and develop a group large enough to provide expertise in all the facets of the practice. The group contracted for services with multiple competing hospitals in a region lacking networks, alliances, and cooperative efforts at that time, The organizational design chosen at the outset was synergy--in its purist, simplest, and, perhaps, most extreme form. The concept of equals working together with clearly defined goals, objectives, and mission was the foundation. "Equalite, liberte, et fraternite," borrowed from the French Revolution, was the motto. This version of synergy addressed the two major threats to the success and survival of all start-up organizations--the allocation of power and money.

Additionally, synergy was to be the basis for all of the group's management systems, policies, guidelines, and procedures. Group decisions regarding power or control over such issues as resource allocation, service assignments, and strategic planning initiatives were to be made only after unanimous agreement. Each stockholder/pathologist would receive the same salary, bonuses, and benefits, regardless of age or the number of years with the group. Taking advantage of the newly offered professional association laws, the group was created as a "P.A." and the pathologists joined as equals in ownership.

Over the next 25 years the group grew to 12 pathologists, serving 18 hospitals and three reference laboratories. The group also became more complex, by developing a statewide, same-day courier service, a non-profit research laboratory for flow cytometry, a centralized cytology/histology service, and a lease-arrangement laboratory in a hospital. All of these risk-prone ventures were developed separately, so as not to jeopardize the PA. Associates were encouraged to invest at the inception of each venture or later when offered on an annual basis.

The benefits of synergy were realized almost immediately. The energy, cooperation, trust, and enthusiasm levels were high. Pathologists were added to the group according to a formal "division of labor" plan or skill matrix, in order to fill leadership roles in surgical pathology, microbiology, and hematology, etc. Shared leadership and governance, as well as shared economic benefits, attracted and retained highly-qualified pathologists. The group's management systems, policies, and procedures were simple and minimal, with scheduling being the most challenging task.