Overview
As resources constrain and expenses rise, health systems are experiencing explosive growth in their subsidies for hospital-based specialties. HSG works with health systems to evaluate the operational and contractual cause for subsidies and evaluate and implement action plans to reduce subsidies while maintaining patient care delivery.
Whether through direct employment or contracted arrangement, health system professional services arrangements with hospital-based provider groups continue to expand – with those agreements come significant subsidies. While a subsidy is generally warranted, the intensity of subsidies experienced by health systems often significantly varies and is driven by a number of factors that must consistently be reevaluated to ascertain the validity of the subsidy in providing high-quality, accessible healthcare. It is critical to have a consistent review process to evaluate these subsidies and ensure they are consistent with the economics of the market and the financial needs of the health system.
How We Work
HSG works with health systems to evaluate their hospital-based relationships, with a focus on the following areas, in order to comprehensively assess the components of a subsidy and identify areas for potential improvement, and develop and implement action plans for execution.
- Compensation
- Benefit Costs
- Operating Expenses and Overhead
- Revenue Cycle
- Operational Efficiency
- Staffing Ratios
- Subsidy Structure
Advising Specialties
HSG advises health systems regarding Hospital-Based Subsidy Arrangements across the following specialties
- Hospital Medicine
- Pathology
- Radiology
- Anesthesia
- Critical Care
- Emergency Medicine
- Surgicalist
- Laborist
Additional Analysis and Consulting
HSG leverages its proprietary set of market and provider network data analytics to help our clients understand the current state of the market, build effective strategic planning initiatives, monitor performance against defined objectives over time, and reassess and reprioritize on an ongoing basis.
HSG Compensation and Compliance
No matter the size of organization, provider compensation is a complicated issue, encompassing issues of strategic alignment, financial sustainability, and regulatory compliance, all of which demand a coordinated, comprehensive approach from health systems and their employed networks.
Compensation Plan Redesign
Employed provider compensation continues to trend higher while reimbursement does not. HSG partners with health systems to develop compensation philosophy and specialty-specific models that are financially sustainable yet promote retention in a competitive environment.
Fair Market Value and Compensation Redesign
Rising provider compensation combined with increased scrutiny necessitates that a health system have a strong compliance program in place for adherence to Fair-Market-Value. HSG’s FMV experts partner with health systems to guide compliance efforts and to develop Fair Market Value and Commercial Reasonableness opinions supporting a health system’s compensation strategy.
Related Resources
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Provider Compensation: Five Key Challenges Health Systems Face, and Strategies to Overcome Them
Five primary challenges health systems encounter in provider compensation and the practical solutions healthcare leaders can implement to construct effective compensation models
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Employed Provider Network Organizational Structure: The Importance of a Formal Organizational Chart
HSG Advisors discusses the facilitation of efficient operations by focusing on organizational structure and associated management infrastructure.
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Non-productivity Incentives in Provider Compensation Models
HSG Advisors discusses non-productivity incentives in provider compensation models and the best way to initiate them.
