Blog Post September 3, 2019 The Intersection of Provider Financial Services, Academic Healthcare, and Children’s Healthcare: An Interview with Ken Roorda Authors Ken Roorda Matt Seiler Ken Roorda is a principal beginning his 20th year at ECG. Since joining ECG in 2000, he has worked with senior leaders across the healthcare provider spectrum on some of the most challenging strategic, financial, and business issues. For most of his career, Ken has specialized in physician-hospital relationships and the unique partnerships, affiliations, and financial arrangements that enable the seamless delivery of care. Matt: Please tell us about your career and how you got to ECG.Ken: When I joined ECG in 2000, I had a background in physician practice management and ambulatory care. I had worked for a health system, and I joined ECG for the same reasons I think people join ECG now: I saw it as a healthcare-focused consulting firm that had leading-edge thinkers and project work. It sounded appealing to me. Matt: What group were you a part of when you joined ECG?Ken: I joined the academic healthcare group and worked in that group for a long time. We’ve reorganized our divisions according to functional areas, and now I work in provider financial services. A certain amount of my practice continues to be related to academic healthcare, but it is provider financial services–oriented first. Matt: You have specialized in children’s healthcare for several years. How did you decide to specialize in that area?Ken: A small group within our academic division decided to focus more on children’s healthcare as an industry niche. As you probably know, the largest and maybe the most influential programs are all academic in nature or have academic affiliations. So, it was natural for us to build that focus into our academic division. That was probably close to 15 years ago now. At that time, we developed relationships within the industry and really focused a core group of people on providing a broad range of consulting services to that client type. An important step for us was the development of our Pediatric Subspecialty Physician Compensation Survey, which is now an industry leader in benchmark data. Today, we have a service line structure for children’s healthcare: in each area where we have expertise at ECG, we have individuals who also focus on children’s healthcare or pediatric clients. Matt: I would like to pivot now to talk about pediatrics in the context of provider financial services and the trends you observe in the market today. What are some of the key ways in which pediatric specialty compensation differs significantly from nonpediatric physician compensation?Ken: I think the key component of pediatric compensation is that the underlying financial relationships are fundamentally different. It’s a population that has a higher Medicaid payer mix than other areas within healthcare. It tends to be advocacy- and charity-oriented. The supply of some specialists, especially in key areas, is relatively low. So, compensation is always driven, to a degree, by supply and demand. Those are just some of the key factors that I think make pediatric compensation different. Having said that, many pediatric programs work within larger adult systems, so they incorporate concepts that adult systems apply to all of the physician compensation arrangements within their system. Matt: How has the growth of managed Medicaid plans impacted physician compensation for pediatric organizations?Ken: I don’t see it affecting compensation plans much at all for pediatric organizations. I believe that the compensation arrangement with an individual physician is driven, in principle, by supply and demand-so it’s a national marketplace. Physicians can seek better offers or improved work environments in many places around the country, and compensation is supplemented by AMCs or children’s hospitals. The exception may be in primary care, where you see more compensation plans that are tied more closely to professional fees. Matt: Some industry observers suggest that pediatric pay models and innovation lag their community and academic colleagues by 10 to 15 years. Do you agree with that assessment, and will compensation for pediatric specialties evolve to emulate other community models?Ken: I would probably agree that there are some innovations that won’t be tried in pediatrics because of the size of the population and its importance to payers, but I would disagree that pay models and innovation lag. Some movement and innovation could occur in adult models that will never touch pediatrics, for example, and it’s because of the unique attributes of the providers and the patient population. I think we all believe that there will be a greater emphasis on outcomes and value. Matt: What care models can pediatric-focused organizations use to optimize the supply of pediatric subspecialists in the market?Ken: That’s a great question. I think it underscores what we’ve seen in the industry, which is an ebb and flow in the supply of pediatric subspecialists. For many years, we saw shortages leading to long wait times at major pediatric centers. An example of the industry evolving ahead of the curve is that many or most of the largest programs have implemented advanced practice clinician models; the APCs act as gatekeepers and increase appointment availability so that patients can be seen quickly. The wait times to second and third next available appointments have gone down as a result. It’s allowing subspecialists to be more focused on the sickest patients, working at the top of their license. It has allowed better access for patients seeking appointments, and it has some effect on productivity levels, throughput of clinics, and other production metrics, as well. I think there is also a move in the industry toward larger centers becoming care hubs for super-specialized programs. Consequently, the care may become more standardized and accessible and result in better outcomes. Matt: Do you think improvements in communication technology are required for this kind of hub model to proliferate around the country? Or do you envision patients still typically going to care centers for in person visits?Ken: I believe that improvements in communication technology are required. Telemedicine is an area of opportunity. Any area where you have small patient populations spread across large geographies, there’s a technology solution, and better implementation of technology will help improve care and outcomes. Matt: We’ve discussed how you and your team do a lot in the provider financial services space, specializing in pediatrics but also working in the adult setting. Do you advise on other forms of physician-hospital arrangements such as professional services agreements or other nonemployment physician arrangements?Ken: Yes, that’s a very important part of what we do. It speaks to some of the uniqueness in the organizational structures within the practice of pediatric medicine. You have a variety of group organizational structures—from for-profits to wholly contained physician groups and multispecialty physician groups closely aligned with AMCs or health systems. Matt: Is there anything you’d like to mention about your work and your experience over the last 20 years that we haven’t talked about yet?Ken: It has been very interesting to witness and be a part of the innovation in the healthcare industry and among providers in particular—to see the differences between pediatric and adult medicine and to evaluate whether innovation in one area will touch the other. Pediatric medicine will naturally always contain some of its own uniquenesses, and the associated financing and financial arrangements will always be somewhat different. We have a lot of interesting things to look forward to in the near future, and we’re poised to help our clients work through many of those issues.