About Sean Hartzell

Since joining ECG in 2007, Sean has focused on strategic and financial planning, service line development, and hospital/physician alignment with a particular interest in hospital/physician employment transactions. He is a contributing member of the firm’s transaction advisory service line, which focuses on developing and disseminating the firm’s thought leadership in the areas of transaction planning, facilitation, and implementation, and he has published thought leadership pieces and spoken nationally on these topics. In addition to transaction advisory services, Sean has extensive experience in hospital strategic planning, orthopedic service line development, physician compensation plan design and implementation, and physician compensation fair market value analysis. Previously, Sean held business development and finance positions at Inova Health System. He received a master of business administration degree from the Darden Graduate School of Business at the University of Virginia and a bachelor of science degree in operations research and industrial engineering from Cornell University.

Healthcare Acquisitions: A Continuing Conversation

This post features a conversation between Senior Managers Sean Hartzell and Matt Sturm.

On January 14, 2016, I had the pleasure of moderating an ECG Management Consultants webinar titled “Healthcare Acquisitions: The Key to Integrated Care in a Value-Based Environment.” Presenters Matt Sturm, a Senior Manager at ECG, and Laura Hennum, Chief Strategy Officer with Dignity Health Nevada Service Area, explored the evolving healthcare landscape, in which the formation of integrated provider networks will be vital to organizations’ ability to successfully deliver value-based care.

The webinar audience, composed of numerous CEOs, CFOs, and business development leaders, shared valuable insight into the way they’re managing their organizations in this climate of ongoing change. In response to a polling question during the session, more than 70% of the audience indicated their belief that within the next 36 months, their markets will experience a fundamental shift from fee-for-service reimbursement. Furthermore, over 55% of respondents are currently focused on acquiring or affiliating with primary care/retail medicine providers.

Laura and Matt explained that they are seeing similar focus areas across the country, and they agree that primary care remains a crucial way of bringing patients into a network of care and retaining them.

Webinar attendees had a number of additional questions, several of which I posed to Matt in this follow-up conversation. Continue reading

Beyond the Benchmarks – Lifestyle Considerations

Call coverage arrangements enable healthcare systems to provide vital services effectively to the communities they serve.  But offering adequate coverage means having an appropriate number of physicians willing to provide their services. Determining the right arrangement for a system requires a reliance on more than just median payments or national surveys and should account for a variety of factors.

What factors should be considered in calculating call coverage payments? Continue reading

Beyond the Benchmarks – Choose your Methodology Wisely

In our last post, we discussed the legal importance of creating data-specific call agreements.  This post will take a critical look at national benchmarks and median values.

Can we use the national median payment for a given specialty and consider it fair market value (FMV)? Continue reading

Physician Integration – Physician Partnership Priorities: Delegation, Communication, and Negotiation

Virtually all hospital integration initiatives include physicians in administrative capacities (e.g., medical director) and the formation of a physician advisory committee to ensure doctors are included in at least some of the decision-making processes.  While necessary and important, these limited roles must evolve over time into a true partnership, with physicians being embedded in all financial, clinical, operational, and strategic aspects of the integrated network.  Creating an integrated system means combining two types of businesses into a single healthcare enterprise.  Establishing the physician partnership is the fourth and final phase of physician integration and involves sharing control and changing the historical culture for both hospitals and physicians.

This is more difficult than it appears, because hospitals and doctors frequently have very different goals and ways of operating prior to an affiliation.  Although this challenge is not specific to those organizations moving from Phase 3 into Phase 4, it is important that administrative and medical leaders recognize the motivational differences in order to effectively align and move forward.

Major differences in traditional hospitals and physician organizations include:

4Phases_Table1
While the table above may be oversimplified, the point is Continue reading

Physician Integration – Operational Excellence Priorities: Practice Management, IT, and Compensation

After the initial rush to employ physicians, attention invariably turns to how to efficiently manage the employed practices.  This frequently happens when the financial drain of the practices reaches a level that the hospital or system deems unsustainable.  While the physicians are now employees of the system, it is often the case that the practices are not well organized or aligned within the system.  In some cases, large guaranteed compensation agreements are in place and physician practice management capabilities have not been built.  It is not surprising that in these situations the practices are not financially viable, nor is the physician network able to achieve its strategic goals (if goals have been identified).

The most expeditious way to overcome this hurdle is to transition as quickly as possible into optimizing operations, the second phase of physician employment.  In this phase, the physician enterprise develops its administrative core and builds skills around managing the practices, while continuing to grow the base of employed practices.  Continue reading