Case Study: Physician Employment Entity and Infrastructure

Background

We’ve had more than a few hospital clients who never made a formal decision to start hiring physicians, but nonetheless found themselves with a goodly number and mix of doctors on their payrolls. One particular client came to HSG in just that situation. They had a group of employed physicians, but that “group” didn’t function like a group in any sense of the word. The client had:

  • primary care, specialist, and hospital-based physicians under different tax identification numbers;
  • practices with dissimilar names and branding;
  • on-site managers reporting to different hospital vice presidents;
  • billing done by hospital staff or by one of two separate physician billing departments on two different systems;
  • physicians on completely different compensation models and structures; and
  •  no group culture or feeling on the part of the physicians that they were a part of a larger unified physician organization.

HSG was retained to help the hospital form a separate entity for the employed physicians. This was to be a subsidiary organization under the hospital’s influence, but managed separately by “physician practice” people rather than “hospital” people.

How HSG Helped

Over a period of two years, HSG assisted the organization in adding new practices and transitioning existing employed practices into the new entity. During that time, a central billing office was established specifically for physician practice professional and technical services.  An electronic medical record, integrated with the practice management system, has begun to be implemented in practices.  Directors of primary care, specialty, and hospital-based practices were hired to oversee practice operations.  The entity has its own Chief Administrative Officer, billing manager, credentialing coordinator, and Director of Finance and Accounting.  The practices have been branded similarly and are clearly identifiable as a part of the hospital’s employed physician group.  Physician compensation models have been implemented with similar values and structure.

Results

Today, the hospital’s employed physician group is truly a group. There is organization, trustworthy data and information, cohesion and direction, where once there was disorganization, confusion, questionable data and lack of a central vision, purpose or direction.

Perhaps more telling, however, is that the number of employed physicians at the client hospital has more than doubled. When HSG started, the hospital had 27 employed physicians and a handful of advanced practitioners.  Today, the group consists of 64 employed physicians and 25 advanced practitioners in primary care, oncology, radiation oncology, general surgery, cardiac surgery, hospitalists, emergency medicine, urgent care, psychiatry, and neonatology.  In addition, the organization has expanded the hospital’s scope of influence by entering outlying markets with physicians and practices that support the hospital’s overall strategy by feeding the hospital and its loyal specialists with patients in need of services.