HH: When you founded BCD Health in 2011 there weren’t too many models like this, and certainly not in Pediatrics. At a time when many of your colleagues weren’t ready to make that move, you were an innovator. What compelled you to move forward with a Super Group at that time?
JS: A bit of history — back in 2007 or 2008, one of my partners, who has since moved on, was very interested in starting a group in northern New Jersey. He got a bunch of Pediatricians together, probably about 40 of us. We met quarterly, hired a consultant to help us work through the different models. We did that for probably about a year and then it sort of fell apart. I think it fell apart because, for our group, we didn’t see a big upside. If these other groups integrated with us, they would get a nice upside but they’re wasn’t much in it for us.
We should have pursued it more at that time but I think there was an exhaustion factor at that point. As you can imagine, its very hard getting that many doctors together at one time, much less ongoing meetings like that. So it sort of just died, for a while. And then one of my friends, Dr. Craig—who is now a partner in BCD— and I were at a conference in the spring of 2009 and she said, “I really think we need to revisit this.” She’s at least 10-15 years younger than me and she was thinking she was going to be in business for a long time and wanted to figure this out. She said she’d love for our group to be involved but either way she was going to explore the possibilities. So, I went back to my group and we talked. We decided that one of the mistakes we made initially was starting with too many physicians so we said, “This time let’s start small.” We decided to start with just 3 groups: my group, Dr. Craig’s group and Dr. Dan Schwartz’s group. We were all part of PCC, so we were all on the same software. It’s a certain type of Pediatrician who uses PCC and you sort of know that someone who uses that is someone who shares the same business sense that you have.
So we got these 3 groups together, got buy-in from all of the partners — 9 in the beginning — and the first thing we did was hire Susanne to help us. We’re all working full time in our practices and this was a huge endeavor. It wasn’t just that we didn’t know that much about putting a business together, we just didn’t have the time. It took about 18 months from those initial meetings to when we went live.
HH: With few pediatric groups-without-walls to emulate, how did you determine the best model to follow and who to partner up with to create the BCD Health organization?
JS: As far as models go, Susanne sat with us and talked to us about what our goals were and how we like to do business. From there we basically invented our own model. Our attorney knew of a large Obstetrics Group in New Jersey and he suggested we go talk to them. Their group was made up of about 100 OBs. We talked to them and then actually hired them as consultants because there were many things they did that we wanted to do. They shared their HR manuals and some financial reporting and we were able to bounce questions off them so that we could see how they did it. Then we took all of this advice and experience, tweaked it and came up with our own model.
We didn’t want to just copy what another group had done. One major cornerstone of BCD is financial transparency, which is very unusual in large groups. Usually when you join a large group, you pay a fee and then from that moment on you have no idea where the money flows. That’s not what we wanted at all. I think we made things more difficult for ourselves at first but we wanted anyone who joined us to know that the books are open. You can see it all, the company does not profit. Everything flows back to the care centers. We really created our own model based on our vision and our mission statement.
Now there are a few more than when we started. So there are examples out there and people you can talk to about it. I think, in the end, you just really have to do your due diligence. Find some people that you know and trust and spend some time talking to them. I find most people are willing to sit down and talk to you. You may pay a small fee or have to hire consultants but that’s how you figure our what is the best model for you.
HH: You’ve grown considerably in the 4 years since founding BCD. Has growth been on target with your early expectations?
JS: My goal was to double in size in two years and triple in five years. And we are pretty close to meeting that target. We are now 19 partners and 31 FTEs — we started with 9 partners and 14 FTEs. For the past year we haven’t grown and that’s because we’ve had some trouble finding the right management person to be at the top. That’s been our biggest challenge. We’ve intentionally slowed growth until we can fill that key position and by taking this time to re-organize a bit, we’re moving some of our key people into other positions and fine-tuning job descriptions. We’re at a bit of a crossroads now. The board and I don’t think we can afford to get much bigger until we either fill that position or decide to affiliate with another group. Once you get to the size we are, you have larger groups coming and saying, “You should be a part of us,” so we’ve been talking to some of those other groups to see if and how those models could work.
HH: Now that you’ve reached your initial goals, can you speak to your methods for recruitment? How did you go about successfully gathering the members you wanted?
JS: Mostly word of mouth. New Jersey is a small state but there are a lot of Pediatricians. It didn’t hurt that, at the time, I was chairing the Section on Administration Practice Management for the American Academy of Pediatrics so my name was out there and I had met a lot of people. Honestly, we didn’t have to recruit. We had people calling us. We definitely don’t take all comers. Our two main tenets are financial transparency and quality medical care so we only take the best groups and really, recruiting was just not an issue. I still have a bunch of messages in my inbox from people and groups who have contacted us and want to talk but for now, those are just sitting there.
HH: You must have a very stringent vetting process to decide who gets in.
JS: We certainly do financially. The clinical stuff is very hard to vet. How do you know who is a good doctor? Much of it is word of mouth and going for a day and tagging along and seeing how their office works. That can be very helpful. You can get a good feel for how things are working, but I still think this is the hardest part to measure. The rest of it, we pretty much have down to a science. There are certain productivity and financial metrics that we need to look at and then we also look at the operating expense. Are they lean? Are they not lean? Those kinds of things. We need to make sure that financially it’s going to make sense for them.
HH: You mentioned there are now more integrated groups doing this. How has the landscape changed since 2011? Do you think it is easier or harder for integrated groups to be formed now than it was in 2011?
JS: I think it is easier. Just because there are others doing it. You have more people to bounce things off of.
HH: ‘Value-based’ healthcare is the new environment in which healthcare services are now provided. All of BCD Health’s practices are either NCQA Level 3 Medical Homes, or working towards that goal. Did this strategy to incorporate quality from the ground up help your organization?
JS: Definitely. The biggest one is in dealing with the Payers in terms of contract negotiations. Right off the bat, several Payers have enhancements if you have that Level 3 NCQA. The other thing that has helped us is that one of the largest payers, Horizon Blue Cross Blue Shield of NJ started their own Pediatric Patient Centered Medical Home quality initiative and I was asked to sit on the advisory board from the very beginning. That was great. They knew me and the group, so being involved in the inception and formation of that program has been great because we could tell the insurers what’s do-able, what’s not do-able. We could say things like, “Yes that’s a HEDIS measure but it doesn’t reflect quality at all,” that kind of thing. We were able to tweak things. So, our group was part of the initial roll out of that and it’s been very successful — both for the Payer and for BCD. They don’t care that you have NCQA level 3 but they’ve created their own metrics to evaluate quality. They’re assuming that good quality care also has to be cost efficient and that’s what you have to try to show them.
HH: Were there any challenges with any of your members, getting them to make that transition to NCQA Level 3, or were they all already of that mindset and heading in that direction?
JS: I would say that to a large extent they were. There were some technical issues with the EHR, but for the vast majority they were all onboard with it. I think that’s part of the vetting process. For example, if one of your measures is proper use of antibiotics for children with upper respiratory infections, you want to make sure that one of your practices isn’t prescribing antibiotics for every kid who walks in with a runny nose. It’s all part of knowing what you’re dealing with. I don’t think we’ve really had a lot of issues within our group. One of our metrics is keeping children out of emergency rooms so we encourage extended hours, such as evenings and weekends, but not all the groups are doing that. We advise them to increase their hours — because it’s good for them financially and good for their patients — but we don’t force anything like that. We really emphasize practice care center autonomy so we’re never going to tell someone that have to open but we suggest that it might be a good idea. Not all practices are going to want to do it, but I can tell you that it was definitely one of the best things we did at my practice. When I became managing partner I said, “We have to do this, we have to be open at least 4 evenings a week.” There were groans and protests at first but that eventually went away and now it’s just great. It’s just the way it is now.
HH: Speaking of staffing, how did you go about filling the key roles in this newly formed Super Group?
JS: When you create a group without walls you usually have a central office that all the groups use. Because we started small, we brought our best admin people from each practice — mostly billing people — into the central offices. We offered them new positions, and believe me, there was some hesitancy there at first. Some of my people have been working with the practice for 25 to 30 years. But for us, transitioning key staff into the central office was very critical for making things work. There was no down time. They knew how things worked and we were starting with very experienced billing staff. And of course the other hires you make are important. We were able to hire two amazing people; one who is now our Operations Manager and the other who is our Finance Director. Sometimes that’s just luck, you find someone great. Then you have to treat your employees well. You offer them continuing education and you find someone who wants to grow into another position. Key staff are really important.
HH: It really is all about encouragement and empowerment isn’t it?
JS: Absolutely. There’s no magic bullet in terms of how you find them but when you do find somebody good, pay them enough and encourage them to move up if that’s what they want to do. That approach has been very helpful for us.
HH: What’s ahead for BCD Health in the next 5 years?
JS: Well, you caught me at an interesting time. We have lots of options and were exploring all of those. It may make sense to affiliate with another large group, or maybe look at growth on a regional basis, as opposed to just within the state of New Jersey.
HH: So, you’re deciding whether you go up or sideways?
JS: Yes, that’s exactly right. We brought our last group on this past summer and we’re talking to another group now. We’re definitely going to grow, but you put it exactly right, it’s either going to be up or sideways. Right now we’re just going through that investigative process.
HH: We’ll be watching . . .