Peter R. Bartling, MBA

The industry is facing a call to arms for radiologists to prepare themselves for the changes that are coming. We must adapt to the changes already present and prepare for those still to come. In this series, we are discussing how to transform a radiology group to create and drive a new culture of activism.

In our first article, we explored some of the 

 and the importance of a strong culture binding a radiology group. In the second segment, we discussed how a 

 is the most valuable change-agent to ensure success now, and the future. In this installment, we begin discussing the specifics of our transformative model, AICI.

In evaluating how organizations successfully react and adapt to their environment, we have proposed a model using cultural dynamics as a change-agent for both tactical and strategic organizational policy initiatives. Our model is defined by four elements - AICI:

• Awareness
• Involvement
• Commitment
• Incentives

. Within the AICI model, awareness has two main components. First, the leadership of the radiology group needs to evaluate the total environment in which the group practices. Second, the culture of AICI requires collaboration and consensus, not command and control. To create a setting of collaboration and consensus, the group leadership needs to engage all the stakeholders in an understanding of that environment.

Environment and the concept of becoming aware of an organization's environment are the basic business building blocks for success. Environment is more than just the organization's setting. An organization has two business environments, internal and external. We’ll discuss the internal environment in future articles.

The external or business environment includes all those factors which are typically beyond its direct control. Business environments are constantly changing, modifying and adapting to new problems and opportunities as they arise. These changes will have a significant impact on organizations operating within the environment; and organizations, reacting to these changes, will in turn, have an impact on the overall environment. To be successful, an awareness of these interacting dynamics is of absolute necessity.

, Theodore Levitt first discussed the concept of "

," the idea that with time, a business's growth stalls or fails due to a failure by the leadership to maintain a broad view of the niche their companies fill, opting instead for a narrow, constricted view of product rather than service. A 

, developed over time by the leadership, ceases to evaluate cues in the environment that lead to improved client satisfaction by addressing their concerns and requirements, favoring instead a more introspective or insular view of growth through increased production and efficiency within the organization.

A myopic culture within radiology focuses on increasing technology and efficiency. Clinician, administration and patient needs and issues take a back seat.

To avoid this trap, radiology leaders must take the broad view of the service radiology provides and the role of imaging in patient care. To do this, we must accurately evaluate and understand the business environment in which radiology and radiology groups function. From the point of view of a radiology group, the business environment includes:

• Hospital administration, both local and system wide.
• Health plans and local, regional and national third party payers.
• Referring clinicians in both cooperating and competing medical groups.
• Patients.
• Local and regional cooperating and competing radiology groups.
• Local, regional and national medical-political issues.
• Local, state and national governmental and legal issues.

To begin an assessment of the group’s environment, it is easiest to begin with the microenvironment, that which is encountered every day. Radiology is a service industry and that service is judged solely on how well it fits into the care of the patient from the standpoint of the clinician.

The clinicians you encounter every day are an excellent place to start your evaluation. While there are a number of ways to gauge how your service stacks up, direct interaction with your clinician colleagues is the best, most direct and inexpensive way to begin. It also has the secondary benefit of beginning a dialogue with your most important clients, the clinicians who use and value you most.

From a business sense, a radiologist not only has medical colleagues but also business colleagues. In a hospital, those business colleagues are the supervisors, directors, hospital administrators and executives of the hospital and/or hospital system. Too many times we look at these people not as colleagues working towards a common goal, but as adversaries and obstructions to the way we want to practice medicine. Unfortunately, thinking of them this way tends to make them exactly what we anticipate. Opening a dialogue with these business colleagues is as important as opening a dialogue with your medical colleagues. Working with your administrative resources, as team members, will significantly improve the outcomes of any projects you jointly enter.

Next, your group needs to understand the competition. Look at those medical groups in competition for turf. We believe that radiological turf includes any radiological CPT code. If you are unfamiliar with CPT codes, now is a great time to become familiar with them.

We also believe radiology and radiologists should never give up diagnostic or interventional radiology segments to any competing nonradiological group. Saying that is the easy part. However, enforcing it is much more difficult. Holding onto what you have during a turf-battle will require significant interaction and trust with both your business and clinical colleagues. A myopic fortress mentality, all too often seen in radiology, only leads to we/they and win/lose types of scenarios. Alienating your colleagues and supporters only promotes ceding the battleground to your opponents.

A final and crucial area of the microenvironment you need to evaluate is the group itself. This includes all members of the group regardless of station or status. Becoming aware of what the radiologists within the group think and what they need is important as a concept of mission for the group takes shape. For example, are there areas where additional training is needed or where new radiologists will be required to complete the stated mission or obtain agreed upon goals?

Similarly, the opinions, feelings and outlook of the employees of the group should be considered. These are the individuals who will be integral to changing the culture, obtaining goals or executing any strategy. Direct interaction from the leadership with everyone in the organization is imperative. Employee surveys with open-ended questions are an important tool and promote further direct interaction and communication.

Next, evaluate local, regional and state radiology groups that may be in competition with your own local contract(s) and/or may soon be in competition with more statewide or regional contracts. Look at them as if your group were going to consider merging. This was discussed in our 

• Evaluate the concept of mission within each group,
• Evaluate the adaptability or level of aversion to risk/entrepreneurial activity,
• Evaluate the involvement of physicians and team members in the organization as well as within the environment in which they practice,
• Evaluate the consistency within the organization, which includes the ability to follow through on a course of action.

Evaluating each of these areas will help determine whether these groups have the ability, resources and entrepreneurial spirit required to carry through with plans for expansion and to potentially become adversary. Alternatively, it will help to determine which groups may become good partners as your group begins plans for the future.

As with your clinical and business colleagues, getting to know the radiologists in other local and regional groups is important. This can be done at or through state radiological society meetings. Dinners, presentation of research or other conferences are also great ways of beginning relationships that can defuse potential problems before they occur. Working with other local and regional groups towards a common goal may prove beneficial from the standpoint of joint operations or full mergers.

Finally, from the perspective of the regional, state and national macroenvironments, it’s important to get involved in industry organizations important including the Radiology Business Management Association, state radiological societies, the Radiological Society of North America and the American College of Radiology. These organizations are frequently looking for volunteers, and opportunities to get involved are easy to find. Becoming involved pays huge dividends and provides access to academic, business and governmental leaders on a regional and national level that would otherwise not be readily available.

The second step of awareness requires the leadership of the group to bring all of the information found back to every level of the organization. As we have previously noted, all stakeholders - not just the leaders and managers - need to be "read in" to the issues and opportunities the group is facing. This cannot be done in one setting and should be planned with several different presentations concentrating on specific areas over several different meetings.

The money used to bring everyone together will be well spent if everyone in the organization works as a team. Input from team members is only relevant if each team member understands not only the big picture but also the nuances of potential problems or opportunities. Working on a solution to a problem that does not exist or developing an opportunity or goal that is not reachable or not in the mission plan only wastes time and resources and is frequently the result of an inadequate information base.

Once team members are apprised of the micro- and macroenvironmental realities, the next step is developing reachable goals for capitalizing on opportunities and devising workable solutions to existing and upcoming problems. The team can create creative, entrepreneurial and out-of-the-box plans and goals . They can then generate logical, stepwise and focused operational plans using collaboration and consensus. Creating matrices are an excellent management tool that can be used to help the team better envision opportunities/issues, assess requirements and develop appropriate specific tactical and strategic strategies.

Throughout this process, the role of the leadership is as steward and guide, stepping in directly only when absolutely necessary. Hands-on direction or micromanagement frequently stifles the process and leads to unimaginative and potentially myopic outcomes.

Leadership, like governing, is by the consent of those being lead. Being the "boss," in whatever form that may take, does not make you a leader. A well run, aggressive, focused and thriving organization needs leaders. "Leaders lead," is a well-worn catch phrase, however many leaders forget the critical importance of their followers. Simply put, a leader is someone others want to follow. Every discussion and every meeting where information is relayed from team leaders to the team is an opportunity to demonstrate the importance of each individual to the organization. And, it is at these meetings leaders demonstrate their leadership not by sermonizing or lecturing, but by involving the entire team in the process.

Awareness is the critical first step in the AICI process. Understanding the environment in which the group practices is a key essential before planning, staging or executing any operational plan. Awareness of the microenvironment in which the group practices and the macroenvironment in which the specialty of radiology is only a part, needs to be considered when creating an objective.

Bringing all of this information together gives the group leadership an opportunity to demonstrate its leadership to the organization by discussing issues, challenges and opportunities with the group and beginning the process of empowering every individual. The leadership needs to consider managing from the street level, not the rooftop i.e. management from the bottom up, not the top down. Finally, generating collaboration and consensus will create the greatest opportunity for the success of the group in any undertaking.

Articles

Understanding the radiology group practice environment is essential before planning or executing any operational plan. Here’s how to build that awareness.

Building Awareness of the Changing Radiology Landscape

The industry is facing a call to arms for radiologists to prepare themselves for the changes that are coming. What we have seen so far 

, and we are now entering a different phase in the process of change. We must adapt to the changes already present and prepare for those still to come.

In this series of columns, we will be describing specifics on how to transform a radiology group to create and drive a new culture of activism. 

we explored some of the issues facing radiologists

 and the importance of a strong culture binding a radiology group. 

Here we will describe how a new, energetic culture is the most valuable change-agent to ensure success now, and the future.

Culture trumps strategy - each and every time. 

In short, culture is the heart and mind of the organization. Regardless of the time, effort and energy put into developing a new strategy, without readying the culture to accept and embrace the new strategy, there will be no buy-in. So, how do we, in essence, change the culture to maximize desired performance behavior?

We have developed a transformational model for evaluating and integrating cultural dynamics in order to use culture as a change-agent for both tactical and strategic policy initiatives. Our model breaks the critical components of cultural changes into four elements - AICI:

Awareness is defined as a comprehensive understanding of the needs and requirements of the organization. All members of the organization - all stakeholders, not just the leaders and managers - need to be "read in" to the issues. If revenues need to expand to remain viable as a business unit, this fact needs to be communicated to all members of the group, not just a select few. If costs have to be reduced, the same process applies. The culture of AICI requires collaboration and consensus, not command and control.

Involvement is defined as engagement in the issues, challenges, problems and/or opportunities that face or will face the new organization. This means involves empowering each member of the organization. If someone sees something happen that requires action, they take it upon themselves to generate that action, either individually or collectively, with the help of others to fix the problem, or recommend a solution.

Brad Hewitt, President and CEO of Thrivent Financial

 stated, “Both individual and community (in this case company) responsibility is required in a civil society. This is not an ‘either/or’ proposition.” In essence, everything is up to everyone at every level. There is no they; we are all collectively responsible for the outcomes either positive or negative.

Commitment indicates and requires each individual member of the new organization be on board and proactive with respect to their responsibilities and requirements within the organization. All successful organizations develop a must-win attitude amongst its individual members. It is a prerequisite for success not only for the merger and the cultural changes; it is an absolute requirement for the success of the new organization.

The order of the day is lead no matter what your level or position. Do not follow when leadership is required. Initiate rather than respond. Be part of the solution, rather than part of the problem. This kind of commitment requires a proactive culture that emphasizes and reinforces performance over politics, and results over good intentions.

Incentives are a just reward when goals are reached. Whether we are seeking major change on a large scale, or alternatives at the margin, there need to be incentives - both tangible and intangible - at the end of the long, hard road. Without incentives, good actions and good intentions will falter and, in the end, fail. All members of the group must be made to understand not only their roles and obligations within the new organization but also that they will reap their just benefits from the changes they are helping to enact.

And they need to know what those benefits are. Specific roadmaps with attainable goals need to be established. Everyone needs to know where they are on the roadmap and when, without favoritism, incentives for reaching those goals can be expected. Properly aligned goals and incentives ensure each member can participate not only in the hard work of creating and running a successful business, but they will also share in the returns derived from their efforts.

Whether we like it or not, change has been thrust upon us. The question is not whether to respond, but how to respond. As we react and develop our response, two things should be kept in mind: First, as Hemingway said, “Never confuse movement with action.”

Second, when an astronaut was asked what he would you do if he had only 10 seconds of oxygen left, the astronaut replied, “I'd think for nine seconds and then act.” It is not the rapidity of our response that will determine our future, but the stability. When we have a lot of at risk, the surest way forward is most frequently found by slowing down, understanding the issues and problems and then laying the proper groundwork for success. If yours is the group that keeps its head amongst the turmoil surrounding health care, your group will likely survive and thrive in the new paradigm.

In the accompanying articles that will follow, we will explore the process for this groundwork and the keys to success.

Radiology Mergers and Acquisitions: Remain Independent or Join Together?

The Radiologists’ Primer: Partnerships, Mergers & Acquisitions


Diagnostic Radiology and Oncology Services: 

Historical Review of Mergers and Acquisitions in Diagnostic Imaging

 [PDF]
Adkins, B. and Caldwell, D. (2004). "Firms or subgroup culture: Where does fitting in matter most?" Journal of Organizational Behavior, 25(8) pp. 969-978
Hofstede, Geert (1980) Culture's Consequences: International Differences in Work Related Values, Beverly Hills, CA, Sage Publications, reprinted 1984
Hofstede, Geert; Hofstede, Gert Jan (2005). 

Cultures and organizations: software of the mind

(Revised and expanded 2nd ed.). New York: McGraw-Hill. ISBN 978-0-07-143959-6. OCLC 57069196.

Does your radiology group have a strong culture? Here’s why a new, energetic culture is the most valuable change-agent to ensure success now, and the future.

How to Transform Radiology Group Culture to Embrace Change

For the past few years, nearly every writer and every organization in radiology have been issuing a call to arms for radiologists to prepare themselves for the changes that are coming. In a recent article, 

ACA and Radiology: The End of the Beginning

, we described what we have seen so far as the beginning. 

This is not to say we have seen the end of the changes. We believe we are now entering a different phase in the process of change. This case includes adapting to the changes already present and preparing for additional changes that are sure to come.

The real questions for groups who intend to be around for the end-game should be: What changes should we consider? How do we begin the process of making those changes, and how can we ensure those changes will help us be successful now and in the future? 

In this series of columns, we will be describing specifics on how to transform a radiology group to create and drive a new culture of activism. This new culture will lead each member of the group to increased awareness of the issues facing the group, improved involvement in creating solutions, enhanced commitment to drive those solutions to a successful completion, and an understanding of how to create positive incentives to ensure each member of the group remains focused for the long term.

Part 1 - Introduction to a transformational model integrating cultural dynamics and changing health care forces to create the radiology groups of tomorrow

Over the past several years, due to the general economic turmoil, there has been more upheaval in business than most of us have ever witnessed. Health care has been particularly hard hit with changes and uncertainty. A significant transformation in the way health care is provided is already underway with the passage of the Affordable Care Act (ACA), and its recent validation by the Supreme Court.

There are now, and will continue to be, greater pressures to decrease reimbursement, decrease overall costs and generate ”appropriate” (read reduced) utilization. All of this is happening at a time of drastically increased utilization of resources by an aging population and a potential tidal wave of new participants in health care brought in through the ACA.

New models for the delivery of health care, including the accountable care organization (ACO) and its variations, are being tried in order to decrease utilization and costs while improving the quality of patient care. Mergers and acquisitions among health care providers have increased to improve efficiencies and decrease costs. Consider, for example, the information released by 

Irving Levin Associates on hospital mergers and acquisitions

Radiology has not escaped these pressures. 

, 21.5 percent of the radiologists responding stated they were considering an acquisition by or partnering with a teleradiology or third party company. Nearly 8 percent said they were in negotiations.

In general, the survey demonstrated radiologists were moderately concerned (2.82/5) about mergers or buyouts with a hospital or other private practices. Mergers or buyouts with a teleradiology company were of only slightly less concern overall.

Issues of expanding coverage and greater pressures on "turf" protection, coupled with changes in reimbursement, force small to midsize radiology groups to consider merging with other local or regional groups. Larger groups, seeking more volume to decrease excess capacity, expand their reach by acquiring hospital contracts with or without the radiologists. From the open microphone sessions at the 

American College of Radiology's May 2011, AMCLC meeting,

 slightly over 16 percent of radiologists present stated they had been a part of a practice that had lost its hospital contract.

All of these pressures to merge or die provide exactly the wrong atmosphere for a successful relationship. Under the best of circumstances, when all parties are interested and positive about the anticipated partnership, the process of joining two groups of radiologists can be difficult. And when the incentives to merge are driven primarily by fear, when that fear has passed, the partnership frequently fails due to those misaligned incentives, among other things.

When these partnerships are contemplated, the consequences for both groups must be anticipated before the final deal is consummated. If they are not, negative outcomes will be the order of the day. Assuming the reasons for merger are sound, a key component of successful partnership is the culture of the newly formed and soon to be integrated organization. Consider the words of 

: “To make a deal work, it really is about integrating cultures. Although you have to get the best and brightest of both systems, you also have to let your culture evolve as well.”

What is culture and why is it important? 

Culture, whether in society or an organization, is the sum of the values, vision, beliefs, habits and accepted norms of behavior of the individuals within the group. Culture will determine whether a group is visionary and entrepreneurial, or fortress-like, or collegial and open. Whether featured in a mission statement or unspoken, this culture will govern the way the group interacts with its own members and its environment.

With a radiology group as an example, the environment is not only the hospital. The environment includes the clinicians and clinician groups with which it interacts, the hospital administration and other local or regional radiology groups.

What drives a culture depends on the issues the group is facing. These can be short or long term issues. Right now, the culture of most radiology groups is driven by "uncertainty avoidance," which is derived from a lack of tolerance to risk and relative intolerance to entrepreneurial activities and/or change. In the current atmosphere of significant change, the majority of groups are just trying to hold on to what they have had in the past. They attempt to create a vision of the future based on an idealized version of the past.

When creating a new organization, the change process can be daunting. Assessing each culture requires hard work and honesty on the part of all members. Four specific areas need to be evaluated:

• The concept of mission within each group,
• Adaptability or level of aversion to risk/entrepreneurial activity,
• Involvement of physicians and team members in the organization as well as within the environment in which they practice,
• Consistency within the organization, which includes the ability to follow through on a course of action.

Based on these reviews, the ability for each group to adapt to a new paradigm following the merger can be determined with some reasonable certainty.

Changing the culture, while exceedingly complex and prone to failure for any of a number of reasons, is basically a two-part process. First, there must be a recognition and evaluation of differences between the cultures and acceptance of the existence of the differences. Second, there needs to be a reconciling of the differences between the cultures with no focus on or attempt to justify any component of either old culture. The focus should be on the new culture and what will work best for the future success of the combined organization.

Developing the new culture will require a new integrated mission and vision. The new mission and vision needs to be understood by everyone in the group, with the recognition that the new culture will be stronger and more advantageous for the groups collectively and for the individuals. Next, there will be a need to establish and affirm the new culture within the organization. This requires clearly describing and explaining the differences from the old culture and the change to the new, and where necessary, plainly and honestly giving the reasons for the changes. A new mission or vision statement for the combined organizations should be written and distributed to the members.

In the second part of this series, we will describe how a new, energetic culture is the most valuable change-agent to ensure success now, and the future.

In this first part of a series on the changes facing radiology, we describe how to transform a radiology group to create and drive a new culture of activism.

Facing Change in Radiology - But How?

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
- Winston Churchill

And so with a stroke of the pen - or many pens and many pages of paper in this case along with a bit of the Washington two-step - ends the debate regarding the Patient Protection and Affordable Care Act (PPACA). The Supreme Court in essence upheld the PPACA essentially in its entirety. Immediately, proponents and opponents of the PPACA were wildly spinning their points of view on the decision.

Insurance companies seem to be reasonably happy with the trade-off of being required to provide coverage to patients with pre-existing health conditions in return for the requirement that most people buy insurance or pay a tax penalty if they fail to get coverage. Whether part of an ACO or acting independently, many companies will seek to improve - that is decrease - payments to both hospitals and physicians by increasing or developing incentives to promote outpatient care. This includes treating patients at the clinic or urgent care center levels rather than escalating them to the emergency room where there is an increased likelihood of admission.

It is not all about the patient, however, as companies try to cut administrative costs to meet the law's requirement that insurers in the individual/small group and large group markets spend 80 percent and 85 percent of premiums, respectively, on health care services.

Hospitals have a significant potential benefit with an additional 30 million or more people expected to obtain health insurance in 2014, adding to their bottom line by decreasing the numbers of uninsured patients showing up for emergent care or admission. Additionally, it is expected that patients will be treated in earlier stages of disease leading to decreases in numbers of late stage admissions and chronic care patients. Patients in at-risk or high-risk categories also may be treated earlier in the disease process leading to an overall improvement in patient care.

While physician groups were generally pleased with the court's ruling, the true feelings of physicians regarding the changes are less clear. When the AMA came out in favor of the PPACA initially, there was a concern that a decrease in its membership was related. One point was clear from both physicians and physician groups, however: any sustainable health care system needs to promote and incentivize care that focuses on measurable quality improvements, improvements in patient outcomes and a better clinician/patient experience that focuses on the goals of improved and more efficient diagnosis, prevention and management of chronic diseases and populations at risk.

For radiologists and imaging centers, the 75 percent equipment utilization assumption rate and 50 percent reduction for multiple procedures applied to the technical component remains in effect. While the American College of Radiology (ACR) said they will continue to monitor the implementation of the PPACA as well as any new legislation, it is likely the proposed additional reductions for radiology and radiologists are likely to move forward.

Radiologists and radiology groups who have been working toward changes that will moderate the effects of this and other changes, including additional reductions to reimbursement, will definitely be in a better position to absorb these changes. Those who have been hoping for repeal or significant changes are definitely in for a rough road as they try to catch up.

No, this is not the end of the changes we are going to see in radiology or health care. This does, however, mark the end of the beginning. In radiology, we will likely see an increase in the pace of the loss of radiology hospital contracts, mergers and acquisitions. Only radiology groups that are progressive and entrepreneurial with respect to improvements in measurable quality, increased collegial relationships with their clinicians and hospital administration, and improved experiences for the patient undergoing radiology procedures are likely to survive.

Timothy V. Myers, MD is a private practice radiologist with Peacefield Radiology. He's the former chief medical officer at NightHawk Radiology Services and director of professional services at vRad (Virtual Radiologic Corporation).

Peter R. Bartling, MBA, has 25 years of executive experience as CEO at Minnesota Oncology Hematology P.A. (MOHPA) and CEO at Consulting Radiologists, Ltd. (CRL).

The Supreme Court decision isn’t the end of changes we will see in radiology or health care. Only progressive and entrepreneurial radiology groups are likely to survive.