Spectrum Health, Grand Rapids, Mich., is on track to build its system-owned medical group from a current roster of about 90 physicians and midlevel providers to up to 700 by 2014.
The system is committed to spending more than $150 million for physician recruitment and support and up to $60 million on electronic health-record technology over five years, says James Tucci, M.D., president of Spectrum Health Medical Group.
The hiring spree supports three goals: to recruit faculty for the Michigan State University College of Human Medicine, which has a campus in Grand Rapids; to build medical research capacity for Spectrum Health; and to provide physicians to work with Spectrum Health's hospitals to transform the delivery of healthcare.
“Even if accountable care organizations and bundled payments don't happen in the near future, hospitals still have to figure out how to reduce expenses,” Tucci says. “And the answers require collaboration with insightful physicians.”
Spectrum Health's move comes amid one of the most powerful waves of physician-hospital consolidation in history. The Medical Group Management Association reports that more than 49% of medical practices that participated in its 2008 physician compensation survey were owned by a hospital or integrated delivery system, up from just 24% in 2002.
That translates into 18,861 physicians and midlevel providers—37% of all practitioners—working in practices that were owned by hospitals or health systems in 2008, the most recent year for which data are available.
Spectrum Health Medical Group was formed in late 2008 as a not-for-profit organization with its own physician board of directors. That gave the fledging medical group identical legal status to the Spectrum Health Hospital Group, with four hospitals and $1.5 billion in annual gross revenue.
“Because we are a 501(c)(3), the medical group is accountable only to the system board and to the community,” Tucci says.
Tucci's mission is to attract physicians who want to collaborate with one another, other types of care providers and hospital leaders to improve patient care and deliver it more efficiently. That cannot happen if hospital administration leaders alone call the shots, he says.
“There is a big difference between working collaboratively as a partner vs. ‘working for,' ” he says.
Spectrum Health Hospital Group must appreciate that fact. Its board of directors includes five physicians, and five of the 16 members of the executive team are physicians, up from just one in 2004.
Joseph Fifer, vice president of finance for the hospital group, says the three primary points of its strategic plan—access/coordinated care, health outcomes and partners—all depend on physicians.
“Executive-level focus on physician integration is hard-wired,” Fifer says.
At its inception in 2008, the medical group had only 43 physicians, 10 physician assistants and nurse practitioners, and an assignment to consolidate all existing employed physicians.
Since then:
New physicians have been recruited to bring employment to more than 90 physicians and about 15 midlevel practitioners, some of whom will join the group this summer.
Spectrum Health purchased the largest physician-owned multispecialty practice in western Michigan. Michigan Medical P.C.—known as MMPC—includes about 200 physicians and 110 midlevel practitioners, and will become a part of Spectrum Health Medical Group over the next five years.
About 75 pediatricians, including pediatric specialists and subspecialists, at Helen DeVos Children's Hospital, a Spectrum Health facility in Grand Rapids, are poised to join the medical group.
The MMPC hospitalists currently employed by the Spectrum Health Hospital Group will join the medical group as soon as logistically possible.
Recruitment is under way for primary practice physicians in Spectrum Health's service area and specialists needed to meet the needs of the medical school, provide comprehensive patient care and bolster Spectrum Health's reputation as a destination for certain service lines.
Tucci's recruitment strategy is to woo physicians by offering professional satisfaction rather than the highest possible total compensation package in the nation.
“Our desire is to attract physicians who want to work in a new way … and to derive their professional satisfaction from the knowledge that they are providing patients with the best care that is scientifically possible, and the best experience of care possible,” he says.
Although the compensation model has not been finalized, Tucci is generally recruiting new physicians by offering compensation just above the mean level reported on national specialty-specific surveys. For many specialties, offers are at or above the 75th percentile level.
“Once we have really built this extraordinary practice, we would hope to be able to always compensate people here at or above the 75th percentile,” he says.
Lola Butcher is a freelance writer based in Springfield, Mo. Contact her at lola@lolabutcher.com.
