Measuring and managing productivity is crucial to the sustainability of employed provider networks. However, many hospitals and healthcare systems continue to use outdated methodology overly-focused on physician wRVUs.

HSG recently developed a new productivity measurement system for a six-hospital integrated delivery system with more than 1,000 employed providers in the Southeast. Management had traditionally measured productivity by comparing physician wRVUs to national survey data. Though most physicians performed well compared to benchmarks, the network continued to face financial challenges. They needed a better system, but weren’t sure how to develop one.

Based on our findings and recommendations, here are three tips to improve the way employed physician networks measure physician productivity.

Tip #1: Understand the most valuable productive resource: your providers’ time.

Our client is a large academic system, so many employed physicians have academic or administrative duties. Management had effectively captured FTE allocation, but hadn’t considered allocations’ impact on productivity. Working with management, we studied physician time by comparing FTE status to scheduled hours from the practice management system. This allowed us to evaluate whether the number of patient contact hours was appropriate for each service line’s goals. Additionally, management was able to set expectations regarding patient contact hours and wRVUs per hour.

Tip #2: Include Advanced Practitioners to see the whole picture.

Like many hospitals and healthcare systems, our client has increased the number of advanced practitioners within its provider network. While management assumed these providers increased overall productivity, it did not quantify or track their direct and indirect contributions to productivity. By incorporating survey data specific to advanced practitioners, we were able to properly assess overall productivity. Our efforts led management to restructure its productivity reporting system to include both physician and non-physician provider wRVUs. These values are then compared to a combined benchmark that represents total provider wRVUs.

Tip #3: Consider the qualitative aspects of productivity data.

In addition to studying productivity data, we spent a great deal of time on-site talking with our client’s physicians. This allowed us to understand the nuances within each service line that affected how data should be interpreted. Before comparing the providers to productivity benchmarks, we sought to understand the nature of the practices and the nature of the benchmark sources. By taking these steps, we were able to develop rapport and credibility with the providers. While reviewing the resulting data analysis with the providers, we were able to effectively draw conclusions and develop action plans without quarreling over the correctness of the data. Management was then able to systemize our recommendations with the support of physician leaders, resulting in a process which should lead to productivity improvements.

Neal D. Barker

Partner and Managing Director, Compensation and Compliance