Leading Large in Michigan

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As practices merge to gain leverage and broad subspecialty expertise, they also encounter commensurate new leadership challenges in governing ever-larger groups of independent-minded members. Consider, then, the challenges inherent in leading one of the nation’s largest radiology private practices, Advanced Radiology Services (ARS), in Grand Rapids, Michigan. It now stands at 114 physicians, 19 physician extenders, and 93 employees in the management company, and is poised for further growth in the short term.

Konstantin Loewig, MD, and Marilyn Savidge, JD, MBA, share the Brobdingnagian task of leading ARS. On the business side, Savidge is CEO of STARS, the practice’s management LLC, and has been with ARS since 1995, when it had 14 radiologists and 14 staff members (and covered one hospital). Loewig, on the clinical side, arrived much later, in 2005, when ARS merged with his former group. He was elected president shortly after his arrival. Loewig has practiced radiology in western Michigan since 1978.

The colossal group had its start in 1996, with a merger between two large practices in Grand Rapids. After a subsequent merger in 2003 with a practice in Kalamazoo, 60 miles south, and the 2005 merger with Loewig’s group, ARS stood at 80 physicians. In 2006, the group made several paradigm changes in governance that have served it well, through to the present.

Because the group was geographically dispersed, and most physicians continued to practice out of their local hospitals, it became clear to Loewig and Savidge that changes needed to be made in governance to ensure that each new division of the group, no matter its size, felt properly represented, and that there were no failure points in communications. They looked no further than this nation’s founding fathers for inspiration.

Marilyn Savidge, JD, MBA, and Konstantin Loewig, MD.

“It is not unlike a state joining the union, whereby states join the union one by one; they retain their independent status, to some degree, as states, but at the same time, become part of the larger union,” Loewig says, in explaining the relationship among divisions. “ARS has become the size that it has by merging with smaller groups that approached it about joining, rather than by predatory actions.”

As president of the smallest division, Loewig had a personal perspective on the issue of equal representation. “I wanted to get away from any perception that the larger divisions would be making the decisions for the entire organization, and that the smaller divisions would be led without having much say,” he notes.

To that end, ARS initiated two new governance structures based on the two houses of Congress. The governance committee, like the Senate, reserves two seats for the president and vice president of each division, regardless of its size. All recommendations that deal with governance go through the governance committee before being voted on by the board. An additional seat on the governance committee is reserved for Savidge.

Representation on the board, as in the House of Representatives, is based proportionately on the size of the division: The largest division has the most representation, and the smallest division has the least. The board ultimately makes the final decision, but the governance committee, along with other similarly represented corporate committees, reviews the detailed information and makes recommendations to the corporate board.

“We have a fairly sophisticated structure, with nine different corporate committees,” Loewig states. “Each of the committees has representation from each division, so that when the committees do their research and make their recommendations to the board, those decisions and recommendations will be coming, we hope, from people who represent all of the divisions. Theoretically, all of the divisions have equal input into all of the recommendations made to the corporate board.”

A third vehicle was founded to ensure thorough communications between the management company and the physician side of the practice: The STARS board includes the officers of the management company, with physicians represented by all members of the ARS governance committee. “STARS is an LLC that is wholly owned by the shareholders of ARS,” Loewig notes. “As such, it operates as a separate company, with Savidge as the CEO. The STARS board meets once a month to allow a format for the managers in STARS to report to ARS leadership. That’s to heighten and maximize the