Austin Regional Clinic founder reflects on 55 years in family medicine
Norman Chenven, MD, and colleagues prepare to open Austin Regional Clinic’s first ambulatory surgery center in Round Rock, Texas, earlier this year.
Norman Chenven, MD, started his post-training medical career with the Indian Health Service on the Navaho reservation in Tuba City, Arizona, an unincorporated town in the Painted Desert about 50 miles north of the Grand Canyon.
Chenven was one of 15 physicians responsible for the care of a population of approximately 40,000 Navajo and Hopi tribal members.
And he loved it.
“It was a huge patient load,” he said. “We were essentially a small multi-specialty group in the middle of nowhere. We had a surgeon, a pediatrician, a psychiatrist, an OB-GYN and a bunch of generalists like myself. It was an extraordinary experience.”
Chenven would have stayed, but with two kids and a wife dreaming of graduate school, the young family relocated to Austin, Texas. He landed a job in the emergency department of the Austin city-county hospital which, in 1973, was the only 24-hour health care facility in the city.
“We took everyone,” he said. “It was chaotic. After two years, three other physicians and I decided that was an insane way to live. We decided to go out on our own and set up a traditional, small-group family practice.”
For five years, Chenven was functionally the managing partner of a growing, successful practice. But he said it felt “inadequate” after working in the Indian Health Service’s multi-specialty setting.
Norman Chenven, MD
Why do health care organizations need physician leaders?
“Unless you really understand what’s going on in the trenches, unless you’ve lived it, it’s hard to make good decisions for a medical group... I don’t know how a medical group can do well unless you have an extraordinary administrator who can intuit what’s going on in the clinic and have empathy for what’s going on with staff. I think a big part of our success is that we’ve had strong physician leadership from day one, and that engenders trust among the rank-and-file physicians.”
Building a physician-led, multispecialty group
In 1979, Chenven got the same “Dear Doctor” letter that many Austin physicians received from Prudential Insurance Company of America, then the largest nationwide health insurer, announcing that Austin would be the development site for PruCare of Austin—a joint venture HMO between Prudential and a local medical group.
Chenven didn’t yet know exactly what a health maintenance organization was, but as president of the local AAFP chapter he was invited to attend a Prudential presentation.
Dr. Chenven visits the future site of Far West Clinic, Austin Regional Clinic’s first major facility.
“Forty physicians walked in, listened to the presentation about setting up an HMO,” he said. “Thirty-nine walked out, but I stayed. I was fascinated by the concept of having responsibility for a defined patient population, and the opportunity and resources to develop a multispecialty group to provide the care—not unlike the Indian Health Service. It was an opportunity to organize and coordinate patient care with the physicians working as a team.”
Chenven left his practice and founded Austin Regional Clinic based on a contract with Prudential. The agreement gave him, as the new CEO, access to capital to develop a multi-specialty group. His first two partners were pediatricians. The next eight months involved developing facilities and recruiting more physicians at a frantic pace.
Austin Regional Clinic grew with Central Texas
Growth was explosive.Prudential sold health insurance to employers. Its first account in Austin was with IBM. Two thousand people signed up on day one.
The civil service employees of the State of Texas followed.
“At first the state said, ‘We think we’ll have 2,000 to 4,000 people sign up,’” Chenven said. “This was in February. In April, they said, ‘Well, it could be a little bit more than that. It might be 7,000.’ By mid-July, they said it could be north of 11,000 health plan members. We were scrambling to hire staff, physicians and advanced practice clinicians.”
The growth of the medical group was driven by the growth of the health plan, which eventually reached almost 90,000 members.
The partnership between Austin Regional Clinic and PruCare was successful … until it wasn’t. A change in Prudential’s leadership in the early 1990s affected what had been a collaborative arrangement, Chenven said. Those changes eventually soured the relationship for ARC, resulting in a mutually agreed separation.
“It was a near-death experience,” he said. “Prudential represented 60% to 70% of our revenue. But we took the risk of going out of business rather than continue with a dysfunctional relationship.”
Was it hard to give up clinical practice to focus on administration?
It was. I was a very good doctor. I’m just going to say that. I still dabble—you know, friends, relatives, neighbors, and so on ask for advice and recommendations and referrals. That came naturally to me, and I enjoyed it. I enjoyed helping people. It was a hard decision, but there was really no choice. There were only 24 hours in the day.
Chenven credits ARC’s survival to the loyalty and dedication of the group’s physicians and ARC’s reputation for high-quality and responsive care. ARC now serves roughly 650,000 patients at 38 locations in 15 cities and five counties.
When Dell Computer was founded in 1984, setting off a tech boom in Central Texas, there were only about 400,000 people living in the Lone Star State’s capital city. Today, there are more than 2.3 million people in the greater metro area.
Austin is now home to three large hospital systems, but ARC remains physician-owned and physician-led and provides a comparable number of patient visits equal to any of those systems, Chenven said.
Why physician leadership matters
“We are a part of the community,” said Chenven, who has served on the boards of the Greater Austin Chamber of Commerce and the Greater Austin Economic Development Corporation. “We are engaged with the community, know the employers and are working with the employers, who are struggling right now to pay for health care, as are we. We’re engaged with the medical community, the general community and the real estate community. It helps us know what’s being developed in the surrounding towns. The Austin community is growing by leaps and bounds and has done so for 40 years. We’ve grown with them. It’s about being a good citizen, helping to interpret for the leadership of the business community and local government, what they can do and what’s important for the health of the community and availability of good health care.”
What do you enjoy about the executive suite?
Every time I fly back to Austin, I’m sitting next to somebody from Austin. When we start talking about what we do, they often say, ‘I’m a patient of ARC. Thank you for developing this system.’ I’m proud of the fact that we provide accessible, high-quality and friendly care.
Chenven has held numerous local, state and national leadership roles in health care, including serving on the boards of America’s Physician Groups and the American Medical Group Association, as well as committees of the Texas Medical Association, AMA and the Travis County Medical Society.
ARC began with a commitment to provide high-quality care with attention to the cost of care in a relationship with an HMO. That early commitment has evolved along with the national emphasis on value-based care, Medicare Advantage and Medicare ACOs.
Chenven said ARC takes pride in its ability to deliver top-tier quality metrics and high patient satisfaction while also managing the overall cost of care on a population basis. He is a board member of the Seton Accountable Care Organization, which includes ARC, and is a hospital network that has been ranked in the top 10% of Medicare ACOs nationwide.
“The best way to articulate the value of a successful ACO is to relate its success to the primary care physicians in the network,” he said. “What that looks like in our setting is that if individuals have ARC doctors as their primary care physicians, the total cost of care for those patients will be somewhere between 5% and 7% lower than it would if those individuals seek care from another care network in the community. We exceed what others can deliver across that board.”
A lasting legacy at Austin Regional Clinic
In 2016, Anas Daghestani, MD, was named CEO and Chenven stepped into a new role as founding CEO. He has remained involved in leadership and strategic decision making.
Early next year, he plans to step away from all of it, after more than 55 years in family medicine. Chenven and his wife plan to retire to Portland, Oregon, where their children and grandchildren live.
“It’s been a ride,” he said. “I’ve very much enjoyed it. I’ve been privileged to have worked with Prudential, initially, because we had structure to build on. And then to have been in Austin, Texas, a community that’s grown so much in a healthy way. It’s an interesting community with a lot of interesting people and is a pretty optimistic place to live. I’ve enjoyed the fact that we have created something of real substance. I have a great deal of pride in the fact that we are a respected institution in our community.”