Heidi Hallett, Verden’s Director of Communications, had an opportunity to talk with Dr. Scott Schams, CEO of Allied Pediatricians of Texas, a new independent clinically integrated ‘super group’. Here he shares the reasons for, and inspiration behind, creating APT.
HH: Integrated groups-without-walls seem to be more and more popular. What do you think is driving the need for practices to band together like this nowadays?
SS: I see several reasons — for smaller practices it’s hard to get the services or prices that we need for supplies, benefits, and expertise. Being a small group is very expensive. Just getting health insurance is very expensive. By coming together in this way, we’re able to have economies of scale, which means we can get what were already getting at a better price. The other thing that I think is important—which is not probably spoken to as much as it should be — is it actually frees up time for owners and stakeholders. Time is probably the commodity that we all wish we had more of. By having several different practices come together you can commit just one or two people to this work and it frees up the rest to do other things which is really, really important. You’re also actually gaining new expertise. The more people you have working together, the more likely you are to have people who do things better than you do. You go to a different level, you’re sharpening one another. Professionally, if you bring the right people together, you can make a huge difference in quality as a practitioner but also as a business owner.
HH: So you’re not just pooling your resources, you’re also pooling your knowledge.
SS: Absolutely, we pool our expertise. You’re not alone anymore. You now have all these other people who have the same goals, same mission, and a similar vision. It helps everybody’s standards move up a little.
HH: In addition to sharing the same goals and passions, you also share the same challenges. One of the things we often hear about in small business is the loneliness factor. Sometimes you can feel like you’re out there on the ledge all alone so I would imagine that the group approach would be very supportive.
SS: Sure. Historically a lot of doctors have been considered the Lone Ranger and, to some degree, medical education was taught that way. Also as entrepreneurs, those of us who are owners have particular ways of doing things and you’re always going to run into people who don’t like doing things your way.
In a lot of ways that can be isolating. By all coming together you may see things in a different light and realize that you can give up a little of what you want in order to gain something better for the group.
HH: Allied Pediatricians of Texas is a powerful name — it suggests that the aim is to be statewide. How long will it take to achieve that goal and what do you think will attract more practices to APT’s model?
SS: We’re hoping to meet that target by end of 2016 or just into 2017. We’d like to have similar growth to what other group practices-without-walls have achieved — like Jill Stoller’s group in New Jersey and Allied Physicians in New York. We want to make sure that we bring on practices that are of the same mission and vision, that share our values. We want to do it in a way where we can add one to two groups every 6 months, depending on their size, and to be able to do it in the right way with minimal confusion. We don’t know yet exactly how big this can go but if we add 5 to 7 groups and we hit 30-35 pediatricians, we’ll actually be the largest independent pediatric practice in the state of Texas in a very short period of time. The largest single specialty practice in the state is Texas Childrens. They have 180 pediatricians, but they’re a not-for-profit so it’s a different model. It won’t take long for us to get to a size where we can have a big impact wherever we are.
HH: I’m glad you mentioned Jill Stoller. I’ll be speaking with her this afternoon about her work with BCD.
SS: Yeah, we thank Jill a lot. We haven’t had a lot of contact recently but she is very inspirational to our group. A lot of what they do, we’ve incorporated into our policies and procedures. That said, were a bit of a unique group because our members are not competitors. Geographically we’re hundreds of miles apart, whereas all the other groups were made up of competitors. Jill’s group BCD, Pedia First Chicago, Sandhills in North Carolina, and Allied were all competitors at one point. They had to overcome issues that we haven’t had to.
HH: This is all fairly new. You’re launching in January of 2016 but it must have taken some time and research to get to this point. How did you determine how to move forward?
SS: It’s kind of funny. This all started out of a conversation in Galveston, at a Texas Pediatric Society meeting about 3 years ago, with Chip Hart and several others. It quickly became apparent that my group and Seth’s group in Frisco were of the same mindset and ready to move forward but the other groups were anxious and reluctant to do it. So, for a number of reasons, it didn’t happen right away but then things really started to take shape for us about 18 months ago. We’ve been working actively on it — in terms of strategies and the nuts and bolts — for the last 12 months.
HH: What will be the most significant milestones for APT as a group over the next couple of years? What are you projecting?
SS: We want to make sure the process is done well. We’d like to double in size over the next 12 to 18 months. Revenue is not really a big part of that — obviously different groups have different case mixes — part of our goal is sharpening each other under the PCMH model. It’s important that we’re actually helping each other to put together good templates, good protocols, and to measure certain clinical outcomes.
One of our goals is to improve graduate medical education, specifically medical students and pediatric residents. We want to create some more funding and have some of our groups be part of that process. We want to be able to mentor and train the future groups for when we’re ready to retire. That’s a challenge — we need to prepare our future generations or we wont exist beyond our own. Those are some of our broader goals. In terms of profit margins and things like that, each of us wants to make sure we’re 1-2 per cent above inflation. That would be nice in terms of having a net increase in profits each year, but we don’t want to have too much expansion and over-extention. We don’t want to expand too much and have to retreat. There’s always a bit of a judgment call to make. We have to make sure we keep moving forward without letting fear hold us back. I’m reminded of one of the philosophies of my old partner, Bill Conklin, who started University Pediatrics in 1953. Bill used to say, “If you don’t grow, you die.” We hold that same philosophy.
HH: That sounds like a good philosophy to live and work by. You always have to be ready to adapt, and there is always room to grow.
SS: One of the metrics that I use is this: if you think you’ve arrived, you’re probably ready to die. You’ve got to remain humble. If all of sudden you think, “I’ve arrived. I’m the best I can be!” that’s not good. And it’s not true either.
HH: Continuing on the theme of change and improvement, the healthcare environment is radically different today than even a couple of years ago. What are some of the greatest challenges facing APT, from your perspective, as well as the greatest opportunities?
SS: There will always be change so we just need to put that on the table right away. I think the big thing, the number 1 thing is that there are always going to be regulatory pressures. The ACA has certainly brought a lot of opportunities but, in my opinion, it has also caused a lot of excessive regulation. Obviously cost pressures are an ongoing challenge, when it comes to our overhead. If we continue to have shortages in terms of qualified labor that’s going to cause some problems, particularly in terms of nursing, and it could also possibly be the case with physicians. Again, that’s one reason we want to have more involvement with graduate medical education, so we can actually grow from within, so to speak. We want to try to help take some of those pressures off — that’s an opportunity.
Another challenge is the education of the public. That’s a real problem in terms of how healthcare works. As it gets more complicated, it gets harder for the public to understand. We spend an awful lot of time trying to educate patients on their health plans and that sort of stuff. Legally, it’s actually the patients’ responsibility but if we don’t do it, we don’t get paid as well. That’s a reality. The medical literacy of the general public needs to improve and that’s a real obstacle. I think it’s reflective of the fact that maybe we could do a better job but also that our public education in general has done such a poor job of teaching our kids that when they become adults they maybe don’t try to educate themselves as well as they should. Health plans will continue to try to squeeze as many dollars as they can out of the premiums, and try to pay us as little as they have to. However, the opportunity is that if we measure ourselves in a way that Payers understand and that the public understands, and we demonstrate that we can improve care because of that, that gives us the opportunity to show our value and to be paid better. Value-added contracting for those groups who are on the leading edge will help a lot.
Another opportunity is that being a group-without-walls makes us a larger entity, which means that people can’t ignore us. Whether it’s the hospital, the community, insurance agents — having a bit more of a level standing means we can negotiate in a more even and ethical power stance. We can actually make sure that all parties win, rather than having one party always get the advantages.
I also think that this model could decrease competition. There’s an opportunity as we come together to get better prices on things, and better payment for services that you’re actually already doing. And of course there are opportunities to actually improve from a professional standpoint, to become a better physician. When you have lots of people behind you, you have a huge advantage.
HH: Let’s talk about leadership. What qualities do feel will be the most important for how you lead an organization like this?
SS: I think any leader has to start with the mentality of, “what is a leader?” Leaders are not just born — they’re made. I think leaders have to have a servant’s attitude. They can’t think, “its just about me” or they’ll never get beyond the first level of leadership. I think servanthood is the one thing that all good leaders have to have. Good listening skills, the ability to realize that every person you have as part of your team has a vital role to play. You need to know your people and what their strengths and weaknesses are. As a leader, you also have to know your own strengths and weaknesses. You also have to know when to delegate to those who can do certain things more effectively than you. You have to have a mission, a vision, and a philosophy, that’s going to carry you through the hard times. Those tough times are always going to come, and someone has to keep the morale up. It takes a very long-term perspective in order to maintain effective leadership.
The last thing — and this is something I have to face up to as I get older — is making sure I can find someone who can replace me. You have to try and identify leaders who will come from behind you to take over at some point. In terms of my organization, if there isn’t someone looking to replace me, then it’s my responsibility to try and develop someone from within the ranks.
HH: You’re clearly a forward-thinker when it comes to planning for the future but I get the sense you have a lot more you’d like to accomplish before you’ll be ready to think about retirement. If you could have one wish granted for meeting a goal or objective for APT, what would that one thing be?
SS: I need more time! (Dr. Schams laughed heartily). If I had to choose one goal, it would be to see APT as THE place to go for young pediatricians coming out of training in the next 5 years. I want us to be recognized as the place they want to work for, as the place to go if you want to be in private practice, whether you’re employed or as an owner, to be the go-to place in Texas. And I think we can. We just have to build it well.