Virtual Healthcare

This article describes using  a two-phase approach to conducting physician practice assessments and determining the cause of practice losses. 

If you want to improve your physician network’s performance, you have to accurately diagnose key problems. We recommend conducting regular network assessments using a two-phase, broad-to-specific approach.

Phase One: Cast a Wide Net

During phase one of your network assessment, cast a wide net. Perform benchmark analyses on key, easily-accessible performance indicators for practices and central office functions:

  • Productivity and compensation by provider;
  • The number of total non-provider support staff per physician and per wRVU;
  • Collections per wRVU;
  • Expenses per wRVU and as a percentage of total revenue; and
  • Total loss per provider.

Compare the data with relevant benchmarks from MGMA, AMGA, and other industry surveys. Differences from expected benchmark norms should then be examined to determine if there are legitimate reasons for the deviations. For example, low collections per wRVU could be caused by a poor payer mix. By confirming this hypothesis with a quick examination of overall charges by payer type, you can eliminate the need to perform additional, time-consuming revenue cycle analysis.

Any metrics without easily identifiable reasons to justify deviation from benchmark norms become the focus in Phase Two.

For example, during the phase one assessment for one of our community hospital clients, we discovered higher-than-expected practice expenses, while productivity and revenue cycle measures appeared normal. Thus, we focused on practice staffing levels and operational efficiency during phase two.

Phase Two: Target Problem Areas

During the assessment’s second phase, drill down into the problem areas that surfaced in phase one. The goal is to identify root problems and develop effective solutions.

While phase one utilized broad, standardized analytical methods, the phase two approach is dictated by the specific focus areas. In the example above, we identified staffing levels as a potential problem. That led to a more detailed analysis of non-provider support staff and advanced practitioners. We also spent time on-site, observing the roles and duties of each staff member.

We concluded that the practices were utilizing nurse practitioners for duties that could be handled by a RN, LPN, or MA. Based on our findings, practice leadership developed a plan to educate and train their provider workforce on appropriate uses of and billing for advanced practitioners.

Neal D. Barker

Partner and Managing Director, Compensation and Compliance