MD evaluations let practices see below surface of group problems

Physician Compensation Report, June, 2003

PCR interviewed Elizabeth Woodcock, FACMPE, a practice consultant and the director of knowledge management at PhysiciansPractice.com, and Seth Garber, M.D., a medical management consultant for Mercer Human Resources and a representative to employers, brokers and health coverage consultants for Kaiser Permanente of the Northwest, about evaluation processes for physicians in medical groups. We asked Woodcock about relatively small groups and Garber about larger ones.

Smaller Groups (Woodcock)

How do you evaluate the doctors who own a group with 10 or fewer physicians? Because of the close, normally supportive and informal relationship among the doctors in a group in that size range, evaluations have to be two things--on a regular time frame, and with a somewhat formal process--to get below a surface, congratulatory level. They do not have to be executed by a single person if the group has no medical director or no full-time one, but physicians have to know, "This is how it will work." As for the questions to ask about each doctor, PhysiciansPractice.com has developed a simple form with about 15 issues--such as quality of care; financial contribution and workload; and participation in group activities--that are rated on a one-to-five scale. Both the doctor and evaluator sign the form at the end. (Visit www.PhysiciansPractice.com, click on Human Resources, scroll down to Tools and click on Physician Evaluation Form.) In preparing the evaluation, it's important in smaller groups to get input from each physician on what to probe. One doctor in a five-member practice is 20% of the group.

Why bother with evaluations? First and foremost, to address problems before they become crises. Evaluations can and should be a proactive way of addressing problems, and should be part of the culture. A partnership is really a marriage--doctors spend more waking hours there than at home--and they need a way of regularly and frankly reviewing how the practice is doing, whether there are two physicians or 40. I tell many doctors, "You need to be happy." You want to be more personally and professionally satisfied, and nine out of 10 times, that means more efficient as well. Another reason for evaluations is to make sure steps are taken to avoid malpractice and compliance problems.

How do you recognize or reward good performance? Should there be financial incentives? The question is, "Do we want to reward good performance, or is that actually an expectation?" I think most groups would decide the latter. Financial rewards would definitely be a bad idea if you are just starting to evaluate physicians, because you must iron out kinks in the process first. Evaluations should never be the main determinant of pay levels, and should be used only if you can quantify performance. You may want to reward group citizenship, and some groups may wish to add further incentives.

What do you do about a physician who's a below-average performer for several years running, but whose patient care is OK? You have to look below the surface to see what the individual's problems really are. Maybe the physician is inefficient; maybe he or she has personal problems or crises; maybe the problem is communication. Whatever the problem is, you shouldn't ignore it. Uncommunicative, lower-quality physicians lead to dissatisfied patients, and the latter are more likely to leave the practice or sue. You may want to look for external resources such as the Bayer Institute for Physician Communication. It's easier for the physician to change if the prodding to do so comes from an external source rather than from the colleague next door.

What about a physician who's a poor cooperator or is disliked by many other physicians and by staff? Because of the large amount of time that physicians spend at work, they have to decide, "Do I want to be married to this kind of personality?" To younger, GenX physicians, personality problems are becoming a bigger deal, and I respect that. Doctors with this type of problem can be counseled.

What about poor clinical performance or poor documentation? The other physicians in the practice must ask, "Are we putting our patients and ourselves at risk by letting the physician in question continue to practice?" Often on poor clinical performance, the evaluation simply formalizes what everyone already knows. Such performance also raises the question, "Is this who we want to practice with?" Again, GenX doctors believe life's too short to tolerate such performance for long. As for documentation, it's part of the care process. It's almost as important in avoiding malpractice liability as good care itself. Poor documentation also tends to depress group revenues. Hospitals are penalizing doctors for failure to document. You mustn't cover up these problems. You must address them promptly and forcefully.

Larger Groups (Garber)

What should a large practice's goals be in evaluating physicians? That's the key question for each group to ask, and it varies a lot. If you're really trying to improve practice patterns for care and efficiency, then you need real-time feedback that is obtainable only through electronic medical records integrated with disease, pharmacy and care management systems, rather than formal evaluation reviews at annual or other intervals. Studies show that the best way to change physician practice patterns is through instantaneous feedback, which implies continuous evaluation. Kaiser Permanente of the Northwest uses such systems, and Kaiser's other regions will implement them over the next several years. On the other hand, if your purpose in evaluating doctors is for public report cards, image or market share, or to comply with payer requirements, or just because you think you should, then annual evaluations using a very formal process and audited data are fine. Some groups closely track patterns of utilization to meet health plan guidelines, but that often is a futile exercise because the outlier physicians change considerably from year to year, and outlier performance depends a lot on patient variability. The stumbling block for many of my clients with physician evaluation is that they don't know why they're doing it.