Medical Group Design and Strategic Planning

The Texas Heart Institute (THI), located within the Texas Medical Center in Houston and founded in 1962, is an independent, nonprofit organization that has been ranked among the top cardiovascular centers in the United States by U.S. News & World Report for more than 30 years. THI performed the first successful heart transplant and total artificial heart implant in the US. Furthermore, THI is considered to be a destination training ground, attracting 80% of the candidates applying for cardiology fellowships in the country. 

While a typical academic affiliation may be entered into between a medical school and health system, THI wanted to protect its identity and integrity as a freestanding institute while engaging in a strategically and financially aligned affiliation with BCM. 

ECG was engaged to:

• Design and operationalize THI’s clinical practice, Texas Heart Medical Group (THMG), and determine how it would relate to BCM and Baylor St. Luke’s Medical Center (BSLMC).
• Establish an academic affiliation agreement between THI and BCM. 
• Conduct a five-year strategic plan that would serve as an organizational touchstone to align THI missions and initiatives in pursuit of its vision.

Working closely with executive, clinical, and academic leaders as well as THI legal counsel, ECG facilitated an iterative process over the course of two years. 

In the first phase of work, ECG helped to develop THMG through a comprehensive design process focused on its organization and corporate structure, governance and leadership, and funds flow arrangements. We facilitated discussions with interested private practice groups and conducted financial due diligence; performed financial feasibility analyses to ascertain the required working capital and model a detailed projected income statement for THMG’s formation; and recommended key terms and strategies for a professional services agreement between THI and BSLMC. 

ECG subsequently reviewed THI and BCM’s research activity, medical education programs, and historical planning efforts through a series of stakeholder interviews and data analysis. We then facilitated a process to reach consensus for major terms of the academic affiliation that would provide a foundation for the shared advancement of both THI and BCM. 

Finally, ECG helped facilitate the development of a new strategic plan with the aim of integrating THI’s wide range of interconnected initiatives. Drawing upon a comprehensive evaluation of THI’s market position, internal capabilities, and stakeholder interview findings, a fact base was established to inform stakeholders and set a foundation for strategy development. Stakeholders were then engaged though collaborative forums to define clear goals, objectives, measurable outcomes, and timelines across THI’s missions. ECG then provided THI with a cohesive roadmap—including an implementation and communications plan— spanning all mission areas and initiatives of the institute in pursuit of its goal to become a destination.

ECG delivered a detailed organizational structure, a physician employment model with five-year growth estimates and associated financial modeling, a professional services agreement with BSLMC, and clearly defined funds flow arrangements that provided a framework for the financial commitment between THI, THMG, and its academic and clinical affiliates. As a result, THMG—a fully integrated clinical cardiovascular practice encompassing the areas of education, research, and direct patient care—was approved as a licensed medical group by the Texas Medical Board and officially launched as the first-ever clinical arm of THI.

In addition to the launch of THMG, ECG successfully facilitated a planning process to finalize terms outlining the two parties’ shared goals to elevate the level of collaboration and to further capitalize on their combined strengths and reputations with respect to medical education and research. The term sheet was critical to the development of a definitive agreement reflecting a new academic affiliation between THI and BCM.

To bring together a transformational chapter for THI, ECG developed a five-year strategic plan documenting THI’s ambitious goals and supporting strategies, tactics, and metrics. ECG also provided a detailed investment guide, five-year budget projections, and supporting plans for communication, resource utilization, and implementation. The strategic plan outlined:

• 6 goal statements spanning all missions (education, clinical care, research) and infrastructure.
• 10 supporting and interrelated strategies, each detailed with associated tactics, performance metrics, and estimated investment requirements.
• 10 institute-wide metrics vital to managing THI’s overall performance.
• Incremental revenue growth to target $8.9 million to $23.6 million in five years from development revenue of $5.3 million to $9.7 million and incremental research revenue of $3.6 million to $13.9 million.