Thirty years ago, I bought a stack of airline tickets and piled into a string of rental cars to see a part of American health care that I was convinced held some magic. I visited a dozen of America’s most respected health care organizations. They shared a common heritage — all had been built around a multispecialty group practice model.
Seven of the 12 institutions could be characterized as primarily serving rural populations. These were aberrations in the landscape of rural health care — large, comprehensive, highly specialized and drawing patients from broad regions. Marshfield Clinic Health System and Geisinger Health System are representative of those 12 group practice–based institutions. Marshfield employs more than 700 physicians, while Geisinger employs 1,600. Both have employed physicians in multispecialty group practices for more than a century.
It is obvious where large urban medical centers come from — the population and economic underpinnings are apparent — but what supported the growth of sprawling institutions like Marshfield Clinic and Geisinger Medical Center in towns with populations of 19,000 and 4,700 respectively? These aren’t exurban towns living off a nearby metropolitan area. The major cities closest to these towns — Marshfield, Wis., and Danville, Pa. — are more than 50 miles distant.
Danville was never really a farm town. It was a steel town. George Geisinger made a fortune in coal and iron. His widow, Abigail, inherited that fortune. After making several perilous attempts to get sick neighbors to distant hospitals in her Hupmobile, she decided to build Danville its own hospital. To make it the “best,” in 1913 she recruited a physician from the Mayo Clinic who brought its principles of care management with him, including its group practice model. About the same time, six physicians in Marshfield founded their clinic.
Why group practice endured
There is no question that rural America has faced tough challenges, including low and declining population density, eroding economics, geographic distance, limited infrastructure and constrained access to capital. What allowed group practice–based institutions like Marshfield and Geisinger to swim upstream, against such impediments?
They incorporated, from their founding, a fundamental philosophy — that group effort matters. This led to a focus on teamwork, collaboration, collegiality and proximity to enhance the value of care, including its coordination, cohesiveness and consistency.
Group practice was a radical and unpopular notion among much of the medical establishment of the time. America’s physicians were strongly committed to independence. Leaders of the American Medical Association described group practice as socialized medicine. It was actively resisted, particularly in urban areas where most physicians and large hospitals were concentrated. Medical education reinforced and perpetuated the commitment to independence. As a result, only those physicians inclined to teamwork ended up at medical centers built on a group practice model.
To a significant degree, the opposition of the medical establishment increased solidarity within and among the group practice–based institutions. Most notable of these was, of course, the Mayo Clinic, where William Worrall Mayo and his two sons, Will and Charlie, became ardent and articulate advocates for organized, team-based care. The growth, sustainability and reputations of these institutions reinforced their view that they had the right model for delivering quality care.
They reflected rural values. They drew their workforces from the small towns and farms they served. The leader of a big city hospital once lamented to me that Mayo and Marshfield had the considerable benefit of drawing on a workforce accustomed to workdays that started at 5 a.m. when the cows needed to be milked and ended only when the sun went down.
The view of agricultural life as a gentle, pastoral world filled with happy sheep and chickens was always a myth. Farming was hard and often dangerous work. Commercial fishing has been described as the most dangerous occupation, but farming ranks a close second. Farm equipment is powerful and unforgiving.
The farmer as a rugged individualist is also a myth. The uncertainties of farming and the always-present possibility of crop and livestock failures put a premium on cooperation. Work in a medical institution provided a degree of economic certainty that many rural residents had never experienced. Furthermore, it was safe, clean work that offered upward mobility. Although much of rural America has ceased to be solely an agricultural enterprise, its farm values persisted. If organizational culture matters, then, certainly, rural values have mattered.
Patients trusted them. Physicians comprising the medical staff of these institutions had strong credentials. They conducted research. They taught medical students. And they put the emphasis on patient care.
Academic medical centers emphasize as their birthright the tripartite mission of education, research and patient care, but the emphasis given to each corner of that triangle makes a difference that patients can and do distinguish. It was not uncommon for patients at large academic medical centers to feel lost in the size and complexity of the place, the vagaries and nuances of which they could barely fathom.
Things have changed: Some academic medical centers have undergone dramatic patient-focused transformations in the past decade. But the group practices that sprang up in the early 1900s put the emphasis on patient care from the outset. Patients felt they could trust their capabilities and competence. They also believed they would be treated with more sensitivity and responsiveness than they would likely find in a city. To this day, many rural people resist urban traffic, parking decks and valets.
Community physicians trusted them. As a rule, the group practice–based health systems developed relationships with referring physicians that were out of the ordinary in their responsiveness. Rapid and consistent communication about referred patients was common. Follow-up phone calls were often augmented by personal letters that updated the referring physician while also expressing appreciation for the referral. It was respectful behavior that combined good medicine with good business. Faculty at academic medical centers were often much less attentive to the needs of referring physicians.
It is the nature of large urban areas to be cloaked in anonymity. There are too many faces, and the crowd is too fluid. But the physicians of these more rural institutions came to know many of the doctors who referred to them. They knew the towns and circumstances referred patients came from. Furthermore, their staff often came from those towns. Familiarity bred trust.
They benefited early from unified leadership. Hospital administration as a profession came to much of health care slowly. Most hospitals were loosely run through the 1950s. As health care and hospitals became more complex and professional management demonstrated its value in other industries, a new class of administrative executives emerged and took its place in hospitals.
A lack of leadership in their formative years was not an issue at the group practice‑based institutions. It was common to hear them describe themselves as “physician led and professionally managed.” This described not only the marriage of medicine and management but also a relationship of mutual respect. There was little confusion over who was in charge and, because there was greater homogeneity of values and an accepted commitment to teamwork, conflict was much less likely to distract them from their intentions. They could fly in formation.
They actively managed the care they delivered. Unified leadership and shared values at these institutions made it possible to more effectively shape their services. They embraced the tenets of engineering and applied them to designing care. Notions like teamwork and management by objectives, as well as process and quality improvement, came quite naturally to them. In the 50 years or so before the arrival of professional administrators, during which other hospitals and health systems were being loosely led, the development of group practice–based institutions accelerated. They grew in size and stature.
It’s hard to innovate if you’re consumed with the need for survival or continuously engaged in operational firefighting. The maturity and effectiveness of their engineered operating systems gave these institutions the firm foundation and breathing room they needed to conduct research and invest in the infrastructure their futures required. As a group, they created strong reputations for innovation.
They achieved critical mass and comprehensiveness in capabilities and infrastructure. Not only were they “group-based,” they were “multispecialty group–based.” They succeeded at overcoming one of the most formidable challenges facing rural health care — attracting and retaining specialty and subspecialty physicians. Key to that was providing state-of-the-art facilities and technology.
But the group practice model provided something else — collegiality and camaraderie. Physicians who believed their best interests and those of their patients could most effectively be met through unified efforts found a comfortable home at places like Marshfield and Geisinger. They did so in numbers sufficient not only to constitute a comprehensive mix of specialists and subspecialists but also to support active research and teaching programs. As a result, these institutions became differentiated for the depth and breadth of their specialized capabilities. Today, those capabilities are enhanced by standardized patient data accumulated over more than a century.
They were located at the nexus of early transportation and communications networks. In their formative years, they had the advantage of building on existing infrastructure, most notably the railroads — Marshfield and Danville were byproducts of the nation’s great railroad revolution, which broke down barriers of distance to create regional and national marketplaces.
To subsidize railroads, the federal government granted them title to land along their railways. The railroads sold the land to settlers who then aggregated in towns at key points along the tracks — tracks that led to places like Marshfield and Danville. Once the railways were in place, it was easy to add the telegraph poles that eventually carried phone lines and power lines.
The railroads gave rise to a phenomenon that shapes modern society worldwide: the network. During their heyday, the railroads carved an ever-denser web of connections. But it was the characteristics of computer-based networks that led scientists to recognize that they operate in unique ways. Perhaps most notably they generate “network effects.”
A common way of describing this effect is to think of telephones. Each phone connects not just to one phone but a large network of phones. The more people who own telephones, the more valuable each individual telephone becomes. Economists who once described “diminishing returns” now suggest that networks produce “increasing returns.” While its applicability to computers and the internet is now obvious, in retrospect it’s clear that the network effect also applied to every new town connected to the thickening network of railways and phone lines. The group practice–based institutions were among the earliest adopters of information and telecommunications technologies, including the first significant applications of telemedicine.
They pioneered the delivery of outpatient care. It was common for their patients to arrive without appointments or referrals, having been drawn across considerable distances by institutions they regarded as uniquely competent and comprehensive.
Because these institutions grew from a group practice model, their first instinct was to treat patients in a practice setting rather than put them in a hospital bed. So from the beginning, they operated substantial outpatient clinic facilities. These facilities were specifically engineered for the delivery of outpatient care as were their admission, diagnostic and treatment processes.
Patient navigation and accommodations were also kept in mind. Knowing that many of their patients would be making long trips, provisions were made for extended stays, including overnight accommodations for family members. Over time, private hotels sprang up connected by shuttles and, in Mayo’s case, by skyways and tunnels. Because they became large over time, they recognized that helping patients navigate was also essential. Navigating facilities is one kind of navigation. Navigating processes is another. Clear, streamlined methods for moving from physician to physician and department to department were designed.
They grew in markets others ignored. Like Wal-Mart — as well as its predecessors, Sears and Montgomery Ward — these organizations managed to thrive in regions most demographers and marketers would have passed over when looking for business opportunities. Although many of the group practice–based institutions took root in rural soil, a few grew up and persisted in urban settings, most notably the Cleveland Clinic. But the Cleveland Clinic had to face a stronger concentration of competitors including academic medical centers with their own deep multispecialty and research capabilities. Although the Cleveland Clinic has proved itself a formidable competitor, other urban group practice–based systems in cities have been less influential than their rural counterparts.
Reinventing rural health care
Today, the opportunity exists to reinvent rural health care, but only if those best positioned to achieve such a transformation configure themselves as true systems of care. In a nonsystem, the focus is on the management of actions. In a system, the focus must be on the management of interactions so the whole is worth more than the sum of the parts.
Those interested in reinventing rural health care would be wise to consider the lessons of durable systemness exhibited by the group practice–based institutions described above. In many instances, rural community hospitals have been acquired by larger institutions, including the group practice–based ones. An acquisition partner ought to bring a lot more than money — it should bring depth and breadth of capability both from a clinical and management perspective. It should also bring systems and infrastructure, including network effects. And it should bring its brand — but only if the attributes that brand represents can be incorporated in the rural institution.
For its part, the rural community hospital should bring to the partnership a pragmatic openness to change, including a willingness to transition from inpatient to outpatient care. It should also bring a willingness to facilitate a spirit of teamwork among physicians and staff with an emphasis on demonstrating value. Also critical will be the installation of synergistic telecommunications and information systems that expand remote access to specialty and subspecialty capabilities.
Today, there are many more academic medical centers serving rural America than there are group practice–based institutions. Indeed, many academic medical centers serve rural populations statewide. In addition, there are many nonacademic tertiary hospitals delivering specialty and subspecialty care to rural populations. The lasting success of institutions like Marshfield and Geisinger offers many valuable insights for other rural providers.
Dan Beckham is the president of The Beckham Co., a strategic consulting firm based in Bluffton, S.C. He is also a regular contributor to H&HN Daily.