Background
Our client, a two-hospital system in the Southeast region, lacked a consistent physician alignment strategy, particularly for primary care. As a result:
- Referrals from on-staff physicians were lost to other health systems
- Competitor health systems were aggressively targeting high-producing on-staff physicians with employment offers
- Loyal physicians were retiring and closing their practices without succession plans, resulting in patients dispersing to other practices, some loyal to the client, some not
- The physician leadership resources needed to tackle healthcare reform were being lost
How HSG Helped
HSG completed a detailed market analysis, which included:
- Studying the physician need/supply in the client’s service areas to develop the inventory of primary care physicians
- Identifying which physicians were independent and which were employed/ affiliated with the client vs. competitors
- Analyzing physician age for potential succession planning issues and opportunities
- Measuring the impact of each physician on the client’s downstream revenues, admissions/discharges and referrals to determine which were critical to the client and which weren’t
- Zip code analysis of market share for key service lines to understand where the client was losing market share and where stronger primary care alignment would have the most impact
With this data in hand, HSG worked with a committee of administrative, board and physician leadership to define the system’s alignment priorities. The final priorities were:
- Targeting doctors who split their volume between the client and other hospitals for closer alignment.
- Targeting aging physicians with succession planning issues to ensure post-retirement patient retention and future client revenues
- Strengthening the employed physician group management infrastructure and compensation planning to become more competitive in the marketplace
- Developing a management services organization (MSO) for independent physician practices with services such as physician billing, staff management/coordination and IT infrastructure development
- Developing a physician liaison program to strengthen alignment with practices that didn’t want to be employed or use MSO services
- Developing a Primary Care Committee, with both employed and independent primary care physicians, to lead initiatives related to primary care
Results
- Discussions with physicians in market are underway. Several employment agreements, expected to generate $10M+ in incremental downstream gross revenue, have been completed
- Development of MSO is underway with several physician practices expressing interest
- Primary Care Committee is leading development of program to rollout Patient-Centered Medical Home model to practices through Employed Group and MSO
- Client is positioned to attract and retain loyal primary care physicians for current and future success
