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Corporate Culture in Health Care

Accountabilities of Governing Boards

By Daniel K. Zismer, Ph.D.

or many community hospitals and health systems employed physicians now drive the lion’s share of clinical care, and by extension the economics and financial performance of the organization. For some, physician services organizations actually define the brand and the strategic differentiation of the organization.

Physician services organizations can take a number of forms. Regardless of corporate structure, they are composed of employed physicians, other licensed healthcare providers and support staff serving a range of required functions; all operating under the health system’s governing board. The physician services organization is, by definition, an extension of a  community health system’s mission and strategy, and is the legal responsibility of the governing board.

The physician services organization provides a level of mission and business complexity that can challenge and perplex health system boards. Why? In part it’s because the physician organization often has no defined and articulated purpose in the organization. In fact for some organizations growth and development of the physician organization has been kept sub-rosa. It’s there, but it may lack formal organization, a distinct brand identity, there is no formal leadership structure with physicians in leadership positions, and the physicians of the organization have no defined institutional standing. By extension, the physician organization has no defined mission, strategy, business plan or intentionally defined and led culture.

It is this last point that should give health system governing boards pause and reason to ask the question of health system senior leadership “what is the state and status of the culture of our employed physician organization and what role does it play in our mission, strategy and overall  success?” But why? There are very practical and sound mission and  business reasons for the question. The short answer is, “it matters”.  Culture in organizations of professionals is inextricably linked with the performance of the organization at all levels.

​Physicians are the economic, financial and clinical careflywheel of the organization.

Defining Corporate Culture

Before going deeper into the rationale for health system governing boards’ responsibility to understand and care for the culture of their physician organization in their health system, let’s start with a definition of culture.

 “Culture is the foundation of intrinsic beliefs that bind and inspire the behaviors of people in organizations to pursue a mission with unity and purpose.” The culture of an organization is made manifest in its performance; its clinical care performance, the quality of the patient experience, its approach to mission responsibilities, how it treats its employees and how it ranks in comparison with other, similar, community health services providers.

How does this definition apply to physician organizations in health systems, and why does it matter to governing boards? The effective practice of medicine, as a component of health care delivery, is a “team sport”.   The very practical rationale for why it should matter to governing boards is physicians are the economic, financial and clinical care flywheel of the organization. Their decisions, behaviors, and attitudes influence performance at multiple levels. They move freely through and across the organization daily. They interact with, direct, and influence the behaviors and attitudes of multiples of staff who provide and support patient care, and they are seen as formal and informal leaders of the organization. For many patients they are the face of the brand of the organization, and they exert considerable influence on the patient experience. Simply stated, the culture of the organization is affected and reflected by physicians employed by the health system.

A practical example may help illustrate the point and importance. During a speech to a group of physicians employed by a health system, a heart surgeon, who was into his first year of  employment, raised his hand to provide his perspective on the importance of culture. He shared; “When I came to join the physician group of the health system, I had visions of becoming a member of a unified, high-performing team.  What I discovered is I joined a loose confederation of physicians practicing independently together. We are not a cohesive group with a shared vision and mission. As such, I decided that if I stayed I had to become comfortable with being a cog in a big machine; show up, do my work and go home.”

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It is important for members of governing boards to understand that physician organizations in health systems are not composed solely of physicians. Depending upon the size and clinical specialty composition of the organization, the number of  non-physician employees, in the physician services organization will be multiples of the that of the employed physicians. The perspective for boards to internalize here is the  physician organization will touch and influence the performance of hundreds, and perhaps thousands, of people in the organization. The culture of the physician services organization will have profound implications for the culture of the whole, and that culture will affect the performance of the organization.

The Psychology of  Physician Service Organizations

Physicians make their way to the employ of health systems by multiple paths. Some come with the acquisition of a local medical practice. Local physicians may join as individuals, leaving a private practice for the employ of the health system. Physicians with years of experience are recruited to the health system from other external environments, domestic and foreign. Physicians fresh out of training programs, residencies and fellowships, will be recruited to the health system. Each shows up with varied histories, impressions, expectations and hopes related to the culture of the organization they’re joining.

Those who are local, and join as a group by a practice acquisition, will bring their own expectations of culture, said and unsaid, ranging from “we have our own culture, leave us alone” to “the principal reason we wanted to join is we have a dysfunctional culture and we need someone to fix it”. At times, the physicians of the practice acquired will endure varying levels of responses from their own independent practice colleagues, ranging from dismissiveness, benign neglect, or even disdain for colleagues who “sell out”. In certain instances the independent physicians will lobby members of governing boards for “equal treatment” ensuring that the employed physicians are not unduly advantaged. The point here is that given how physician organizations in health systems begin and evolve,  letting the culture “take care of itself “ is a leadership mistake. The first lesson of leading culture is every organization will have a culture, by design of default. The culture of the organization is the leaders’ choice.

​The culture of the organization is affected and reflected by physicians employed by the health system.

The need for understandings of culture goes to the level of the individual professional. Boards need to appreciate the employed physician as a highly trained, skilled and practiced  professional. Physicians are, at once, members of teams, and are expected to be the at the tip of the accountability spear. An illustration of this complexity is in order here. When facing professional liability exposures, the physician organizations with the under-developed cultures will run from their colleague facing the threat, those with the well-led and developed cultures will run to their colleague to provide support, counsel and the benefit of their own experience and advice.

The individual physician requires a culture that supports the value of the team, while according the physician sufficient freedoms to exercise their professional judgement, along with reasonable sufficiencies of personal control over how they craft and development their personal practice style, within guidelines established by leadership of the group. Likewise, the system of rewards must meet a set of complex needs, wants and expectancies. Here the meaning of “rewards” goes far beyond the mundane; e.g., money and time off, to rewards derivative of affiliation with a strong culture, including the pride that comes with being a member of a respected organization with high community standards and status.  In one study conducted by our team, the factor that most affected physicians’ evaluation of the state of the culture of the organization was “all physicians are held to the same quality standards”.

Governance and the Culture of the Physician Organization

Our research shows that the people of the organization believe the culture of the organization is what the leadership wants it to be; for better or worse.  While “leadership” may be defined variously, and for some it is an amorphous concept, there is no doubt that the governing board of a healthcare organization is defined legally and morally as the leadership body “in charge” of the organization, and while it may delegate the attending of culture to senior management, it is not in a position to abdicate responsibility or accountability for the culture of the organization and its component parts, including the physician services organization. Governing boards of healthcare organizations “own” the culture of the organizations they lead. The physicians will look to the board as the designated body that holds the responsibility to ensure a stable, productive and mission-driven culture on behalf of all in the organization.

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With this in mind, what is the role of the health system board as it relates to the culture of the physician organization?  Boards should think of their role as the “ keepers of culture” within in a framework of:

Acceptance:  Governance holds the responsibility and accountable for the culture of the organization, including the physician services organization.

• Understanding:  Governance holds the responsibility and accountability to connect with the people of the organization to understand the state and status of the culture they lead, including direct engagement with employed physicians as participants in the process.
• Engagement and action:  Governance holds the responsibility and accountability to engage with senior leadership  and plan action required to ensure that culture development becomes integral to the job of senior leadership; as important as quality, operations and financial management.
• Ongoing oversight: Governance holds the responsibility and accountability for ensuring that ongoing evaluation and development of organizational culture becomes an essential

• component of leadership, management and performance evaluation of the senior leadership team.

In conclusion, members of governing boards cannot be expected to understand all there is to the leadership, operations and management of community health systems. They can be expected to fully engage with, and understand the cultures of the organizations they lead, including the cultural complexities of the embedded physician services organizations. The mantle of governance requires it.

Daniel K. Zismer, Ph.D. is Co-Chair and CEO of Associated Eye Care Partners Stillwater, Minnesota. He is also  Co-founder of Castling Partners and a Professor Emeritus, Endowed Scholar and Chair School of Public Health, University of Minnesota.  

Some of this article derives from administrations of the “CulturePulse” a proprietary organizational culture evaluation tool developed by D.K Zismer and B.J. Utecht.