Building a framework to develop a new generation of physician leaders

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MGMA Stat

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6/5/2024

Physician leaders play a crucial role in healthcare organizations, and their evolving roles require a combination of of clinical expertise, leadership skills and mentorship programs. But not all medical groups have robust physician leadership programs or a clear framework for the attributes sought in prospective physician leaders.

A June 4, 2024, MGMA Stat poll found that 23% of medial group leaders said their organizations have a formal physician leadership development program, while 75% do not and another 2% reported they were unsure. The poll had 448 applicable responses.

The absence of formal programs does not signal that most practice leaders undervalue or lack the effort for the development of physician leaders. In fact, most respondents who said “no” to formal programs told MGMA they have some form of informal mentorship and/or coaching for new physicians and physician leadership candidates. One respondent told MGMA that adding mentorship to develop future physician leaders is a key to “increase physician understanding, voice and engagement in clinical and operational” matters.

Some medical group leaders acknowledged that established physicians are reluctant to take time away from the practice to train and encourage younger physicians, especially due to financial pressures from rising costs putting pressure on independent practices — as one practice leader told MGMA, “survivability is the only priority” for some physician-owners. In other cases, formal efforts have not been prioritized due to the varying levels of stress and burnout experienced by physicians who would lead the initiatives.

In limited instances, the staffing disruption across the healthcare industry was seen as a temporary obstacle to moving ahead with leadership development efforts. “Our CMO was mentoring current and potentially future medical directors, but we are in between people in that role, so it has ceased,” one respondent told MGMA, who noted the organization’s chief operating officer stepped in to help lead efforts.

However, most respondents to this latest poll point to the availability of resources to give physicians opportunities to learn and grow, such as continuing education allowances and tuition assistance for further studies. Many medical group leaders also highlighted more informal efforts for coaching.

Additional MGMA resources

“The importance of physician leadership education” (MGMA Connection magazine)
“What Docs Don’t Get Taught in Medical School: Physician Business Training” (Online course)
“Developing physician leaders as agents for positive change” (Podcast)
“Coaching and mentoring: Methods leaders can use to develop talent” (MGMA Connection magazine)
“Examining the emotionally intelligent physician leader” (Podcast)

Leadership development for CMOs

As detailed by Tom Rossi, vice president of executive search at Jackson Physician Search, and Mark Dotson, director of physician executive search at Jackson Physician Search, at the 2024 MGMA Focus | Operations Conference, developing and supporting physician leaders is essential to address the growing physician shortage, and a comprehensive approach that includes training, mentorship, and collaboration is necessary to cultivate effective leaders. One of the most important physician leadership roles across healthcare is the chief medical officer (CMO), with the traditional responsibilities of:

Medical staff management
Clinical oversight (including quality and safety compliance)
Management of organizational response to technological advancements.

This role often has limited involvement in strategic decisions regarding the medical group, as the CMO balances management responsibilities and patient care. However, shifts in the industry and the needs of provider organizations necessitate a change in the CMO role, as Rossi and Dotson noted. Those new responsibilities include:

Leader of clinical strategy and navigating regulatory changes
A focus on physician performance, satisfaction, engagement and retention
Prioritization of access to care and integration of care across multisite locations
Leader on health equity, population health and value-based care initiatives.

That’s a lot to handle for a new physician leader who will tend to gravitate to the practice element they are most familiar with, says Dotson, who noted that it might take nine months to a year for that leader to build the connections to truly thrive in the role. However, leaders are often pressured to show positive outcomes within just six months. “That’s a short period of time in healthcare, but if they’re integrated and able to network well” across different elements of the organization, Dotson added, “it’s incredibly helpful to them.”

It's also crucial for new physician leaders to firmly grasp the key performance indicators (KPIs) in medical groups, including those related to finance, operational efficiency and patient satisfaction.

As Dotson related, a recent meeting of the American Association of Physician Leadership (AAPL) provided even more areas of practice transformation that physician leaders — especially CMOs — would need to explore, including:

Creating change to reimagine the workplace and establish a culture of well-being
Launching virtual service lines and defining physicians’ roles with AI
Establishing ROI of improving patient flow
Building better peer-to-peer conversations
Communicating the benefits of a multidisciplinary approach to care.

A framework to define your needs

Rossi noted that defining what the organization is looking for in a physician leader candidate must be part of the foundational work to select a successful CMO, emphasizing that those charged with building the framework need to understand the differences between good management and strong leadership (see table below).

Source: Reynolds KA. “MGMA 2022: Leadership vs. management.” Medical Economics. Oct. 10, 2022. Available from: https://www.medicaleconomics.com/view/mgma-2022-the-difference-between-a-leader-and-a-manager .

“When you think of a great physician leader, they are known for their clinical expertise, they're very good at what they do with their patients, but their communication skills are really excellent,” Rossi emphasized. “They can change their communications depending on the audience … and it requires emotional intelligence to be able to do that.”

That emotional intelligence and the ability to communicate will differentiate successful physician leaders in the many relationships to be built and leveraged to achieve success on tough issues across multiple sites such as patient access or population health management.

As recent MGMA polling has shown, many medical groups have opted to offer CEU allowances or tuition help for physicians in support of their leadership development, whether that’s through a full-fledged MBA or MHA program or other learning opportunities or certification programs such as AAPL’s Certified Physician Executive (CPE). Rossi noted that many of these physician leadership development programs have one thing in common: a focus on mentorship. Some organizations may instead opt to invest in executive coaching to prepare potential leaders for taking the next step in their careers.

No matter how an organization ultimately crafts a framework for what they want from a physician leader, there are three key advantages of providing formal study and development programs for CMO candidates:

It allows a physician to define his or her role as CMO more clearly.
It develops effective networks for that leader to consult and collaborate with others.
A physician acquires the skills to ask the right questions and address complex organizational challenges.¹

However, many medical groups may recognize the strategic imperative of leadership development but fail to invest in it. Five common barriers to these investments include:

The lack of financial and staff resources stands out as a primary deterrent, preventing many organizations from committing to leadership development. Concerns about expenses and resource limitations hinder the creation of the necessary infrastructure for these programs.
Short-term focus emerges as another roadblock, as organizations prioritize immediate results over long-term development. The pressure to meet financial targets often overshadows the importance of building a strong leadership team capable of navigating future challenges. This short-sighted approach may hamper growth and hinder organizations from achieving their full potential.
A lack of understanding also plagues some organizations, as they fail to grasp the critical nature of developing leaders. Perceiving it as an unnecessary expense rather than a vital investment, they overlook the long-term benefits such development programs offer.
Resistance to change further exacerbates the situation, with leaders hesitant to invest in developing new leaders who may challenge their authority and disrupt the status quo.
Lack of time to develop their leaders. Building effective leaders is a time-consuming process that demands careful attention and investment. However, the reluctance to commit these resources hampers the growth and potential of leaders and the organization.²

Laying the groundwork for success

Healthcare organizations have several avenues to consider for successfully preparing a physician for a senior leadership role (see figure above) in conjunction with assessing candidates for the requisite skills.

As Dotson noted, clear alignment on clinical expertise and the care setting is vital. “You have physician leaders who [say], ‘Hey, I want to be a CMO,’” yet they have primarily outpatient experience and less understanding of the inpatient realm.

Physician leadership academies are increasingly popular to develop multiple physicians, but Dotson stressed that not all of them operate well in multiple settings. Amid the COVID-19 lockdowns, some academies shifted to virtual gatherings and resulted in dissatisfaction among many physician attendees, who preferred the dynamics of in-person structured learning.

Go with who you know?

A physician leader will have considerable influence on the overall culture of the organization, so the decision to favor internal or external candidates is a crucial part of the process, Rossi and Dotson said.

In some organizations, there is a tendency to quickly identify an internal candidate to be “voluntold” their new leadership duties, but that may not always help that individual be successful in growing the organization.

Internal candidates have certain advantages in stepping into a new leadership role, including familiarity with the organizational culture and dynamics, as well as built-in relationships. However, some organizations may require the fresh and objective perspective of an external candidate, especially an individual who possesses broader industry insights than the incumbent physicians.

Important reminders

The key roles played by physician leaders in improving clinical performance, patient outcomes, staff satisfaction and organizational culture is clear across the industry, and they also play a key role in generating revenue while leading multidisciplinary teams and managing administrative tasks.

Where many organizations stumble in their physician leadership development efforts comes down to overlooking the importance of involving these physician leaderships in the strategic decision-making process. As Rossi and Dotson noted, physician leaders possess clinical astuteness that’s needed to implement meaningful change that does not lose sight of key needs such as patient safety and quality improvement.

As the healthcare industry continues to evolve and shift more toward models that involve virtual care, having these physician leaders involved in strategic decision-making processes is likely to foster innovation in care delivery that might not otherwise occur without their expertise.