Where can a hospital or health system get some ideas for determining what needs to be done to improve a physician network’s financial performance?: Here are a few strategies to consider.

Ask staff. Staff members may have excellent ideas about improving the physician network’s financial performance. Unfortunately, senior managers seldom ask employees for their ideas, and so they don’t offer them. Soliciting ideas from front- desk and clinical support staff will engage them in the process.

Physicians, especially those who used to be in private practice, also have some critical observations about what can be improved. During interviews, these physicians quickly highlight what worked better for them when they ran their own practices. Of course, it is important to keep in mind that if they had they been as good as their memory suggests, they might still be on their own.

A sound approach to identifying financial opportunity includes the following steps.:

Study the data. Look at provider productivity, staff to provider ratios, collection rates, A/R aging, and similar metrics before starting any performance improvement effort. This analysis will identify areas that need a closer look as each clinic is evaluated. It will also help to identify a best practices location that might serve as the model for others. Use industry standard metrics from the MGMA or the American Group Practice Association to identify outliers.

Visit the sites. Much can be learned from sitting in the waiting room and watching patients come and go. Track time in and time out. Watch how staff interact with patients. Time phone calls to get an idea of the time staff devotes to various tasks. 

Interview staff. What tasks do you typically perform? How long does each task take? What would you change if you could? Questions like these go a long way in understanding clinic operations. The person analyzing the office operations will quickly find that adding the time it takes for a staff member to perform his or her various tasks never equals eight hours. In fact, lost time may comprise as much as two hours each day. In addition, several staff members may report that they do the same job, suggesting a need to restructure assignments.

 Interview providers. Talk with physicians and mid-level providers to solicit their ideas about what could be improved. Treat them as if the practice were their own, and they will begin to help make those changes.

Develop an action plan. Document needed changes by site and for the network as a whole, assign responsibilities and timeframes, present those to both physicians and management, and consider their input before creating the final action plan. Once the review process is complete, get started on the action plan and request regularly scheduled progress reports, as well as reasons for missed deadlines. Management might not have the resources to manage the change, and it is critical to identify this early in the process.

Losses attributed to employed physicians networks should never be accepted as unavoidable. While valid reasons exist for why some practices will never break even, operating losses for hospital-employed physician practices are not inevitable.

Making changes can be disruptive and might very well result in the loss of key staff, but if the hospital’s goal is to operate with a healthier bottom line, these may be acceptable results.


Greg Mertz, FACMPE, is managing director of Physician Strategies Group, LLC, in Virginia Beach, Va.


For more information, see Greg Mertz's "Boosting the Bottom Line of Physician Networks", hfm, June 2013 

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