Our client is a community hospital in the Midwest that operates a PHO consisting of 50+ physicians (largely employed, but some independents) across a number of specialties.  With mounting losses on the employed physicians in the PHO, executives within the organization began assessing practice losses by specialty.

However, given competing strategic priorities within the organization, the executive team did not have a process for evaluating what their tolerance for subsidies by specialty should be, and how specialties should be prioritized.

How HSG Helped

HSG did an independent analysis of subsidies within the organization and an assessment of the operations of the network to determine:

  • what the subsidy per physician specialty actually was, and
  • by what percentage the subsidy could be reduced through improved network management.

Armed with this data, HSG then facilitated a workgroup of hospital and PHO leadership to combine the organization’s strategic priorities with the revised subsidy figures and generate a prioritized plan for reducing subsidies, while maintaining physician supply in key service lines.


As a result of HSG’s work, the client has a clear plan with executive team buy-in. The client is moving forward with eliminating non-priority physician specialists from the network and improving practice operations, resulting in a reduction in the subsidies paid out by the organization in the most recent calendar year.


Neal D. Barker

Partner and Managing Director, Compensation and Compliance