Reducing Employed Physician Network Losses and Creating Financial Sustainability

Underperforming revenue cycle

This includes underperformance in hitting benchmarks in the billing office (in the hospital financial office or in a dedicated central billing office); properly credentialing providers with payers in a timely manner; maximizing revenue capture in the office setting; documentation and coding.

Misalignment of compensation and performance

This includes providers being overpaid relative to production; providers being given incentives inconsistent with network financial goals; or providers having incentives focused on individual (not group) performance.

Inconsistent and/or inefficient approaches to operations, staffing, and space usage

Most commonly, this relates to practices being left to operate much as they did before they were employed – which results in wild variation on a practice-by-practice basis when it comes to throughput, staffing, space, and other operational indicators.

Insufficient usage of advanced practitioners.

This applies to the mix of Physicians to Advanced Practitioners (AP’s), as well as whether AP’s are being used at top-of-license or as glorified clinical staff. This results in cost per provider being excessive relative to production.

Underinvestment in management infrastructure

Networks struggling with financial performance frequently under invest in their management team, resulting in a crippling lack of resources that create an inability for management to move beyond “fighting fires” on a daily basis.

Poorly designed organizational structure that creates a lack of accountability

Many employed physician networks are still managed by multiple hospital executives, or have executive directors/managers who are not held directly accountable for performance of the network. If there’s not a place where the buck stops, the performance will not improve.

Strategic issues disguised as performance issues

In some cases, poor financial performance is a symptom of larger strategic issues at the network or health system level. As an example, if the employed network doesn’t have the right primary care strategy and a sufficient primary care base, all the performance improvement initiatives in the world won’t make employed specialty practices productive and profitable.

Employing “who we have” vs. “who we need”

Not every provider and practice who was brought into the network years ago is still a strategic fit for the network. Some providers are never going to have the mindset that will make them an effective employed provider. Some practices brought into the network long ago under a different strategic mindset may not be relevant now.

SAMPLE ANALYSES
Sample Practice Benchmark Dashboard

The Practice Benchmark Dashboard provides a one-sheet overview of how the practice is trending over time and performing against benchmarks. The Dashboard also quantifies potential financial improvement opportunities and defines priorities for management.

Sample Practice Benchmark Summary

The Practice Benchmark Summary is a roll-up of opportunities across all the practices in the network that identifies the opportunity if practices reach benchmarked performance, and prioritizes which practices should be tackled first by management.

PHASE TWO — Opportunity exploration
This phase involves a deep dive into issues identified in the opportunity phase. Exploration usually includes on-site assessment of the practices and billing operations, as well as interactions with providers and practice staff to truly understand the root causes of negative variance in performance. This also provides an opportunity to engage on-the-ground stakeholders, such as practice leadership and providers, in order to create a sense of awareness and understanding of the network’s opportunities for improved performance.

PHASE THREE — Implementation
Combining the insights from the opportunity and exploration phases, the final phase of implementation focuses on defining the network’s path and initiatives that must be accomplished for the network to be successful. This results in a comprehensive implementation plan, which focuses on:

•  Creating a clear path forward for all stakeholders;
• Providing guidance to management, provider leadership, and the provider group at large of where and when to prioritize efforts and what success looks like;
• Creating mutual accountability among providers, management, and network leadership;
• Defining expected timelines, responsibilities, and resources needed; and
• Achieving the desired results.

Conclusion
As concern grows about the financial impact of employed physician networks, healthcare executives must turn to experts for help. The long-term financial implication to the health of the organization and its sustainability are significant. Taking a thorough, phased approach to address the financial sustainability of the organization will increase the likelihood of reaching goals and improving overall performance.