For years, productivity has ruled all when it comes to employed provider networks. The straight salary and net income models of the ‘90s and early ‘00s have gone by the wayside and in their place wRVU-based models have become ubiquitous. We’ve seen hundreds of different wRVU models, but all are focused on one thing: being productive. Providers are judged largely on whether or not they hit their benchmark, and the ones that haven’t are told to get busier.
However, like many things in healthcare, the definition of productivity is changing. Forward-thinking organizations are beginning to evolve the way they measure and use productivity data to guide their operations and even their strategy. In our work with clients around the country, we consistently see three opportunities for improvement in this area:
1.) Expand the Metrics
While wRVUs are an important component in measuring productivity, it is impossible to draw relevant conclusions without taking into account other key productivity variables. Metrics such as revenue, visits, patient contact hours and panel size all provide key data points to give you a broader understanding of practice operations and provider performance.
Consider a practice where wRVUs and visits are above the median, but revenue is below the 25th percentile. Looking at these metrics in tandem allows management to quickly and easily diagnose a potential revenue cycle problem. The potential problem could then be remedied with targeted analysis and appropriate performance improvement plans. These actions would be not possible, however, without a sufficiently robust productivity analysis.
Along the same lines, consider a low wRVU-producing provider with a high number of patient visits and contact hours. This potentially identifies a revenue capture or coding issue that may otherwise go undiagnosed.
Finally, panel size is increasingly important as healthcare transitions towards population-based reimbursement mechanisms. High wRVU producers with low panel sizes are going to be a detriment to organizations trying to reduce cost-per-capita. Previously high-producing providers who are used to getting big productivity bonuses are going to experience culture shock as they start getting criticized for the same behaviors for which they were previously praised. Getting out in front of this issue and expanding the metrics you review with your providers now will be a good start to changing provider behavior.
2.) Understand the Impact of Advanced Practitioners
Many, if not all, of our clients are focused on expanding their use of Advanced Practitioners (APs) in their employed practices. The benefits appear obvious: an expansion of lower-cost resources that help stretch the efficiency of high-cost physicians in the practice and the hospital. However, this expansion of AP use is causing problems for a number of our clients as they realize their traditional measurements of physician productivity are now being impacted by AP usage. Management teams that had been previously focused on physician wRVUs have realized the need to capture the direct and indirect productivity contributions from advanced practitioners.
One approach to capturing these contributions is to focus on total wRVUs from the combined provider team. This approach acknowledges that although some advanced practitioners work in a practice model that is not conducive to independent wRVU generation, these models allow for increased wRVU generation by the physicians.
3.) Leverage Productivity Data to Make Strategic Decisions
Manipulation and review of provider productivity data has historically been housed within the employed provider network and looked at primarily as an operational issue. Are our providers productive or not productive? How do we fix the non-productive ones? However, we see successful organizations combine productivity, financial, market, and other seemingly unrelated data sources in order to develop holistic analyses that can guide strategic decisions for the overall organization.
For instance, productivity data can be effectively combined with market share performance, demographic patterns, and drive-time analysis to understand whether primary care practices are properly distributed within a certain geographic area. Underperforming providers may benefit from a shift in practice location. Conversely, low market share in an area with highly productive providers may indicate a need for additional providers or practice locations.
More holistic productivity data may also change the way your employed network makes decisions about which providers to acquire. As opposed to high wRVU producers with low panel sizes, physicians and practices with large patient panel sizes provide more long-term strategic value to hospitals seeking to be players in the value-based reimbursement space.
It is likely that changing market dynamics will further change how wRVUs are perceived and used in management. These are just some examples of how their utilization is changing. HSG will work to share new insights as the approaches of our clients evolve to meet new market realities.