Lake Primary Care Physicians was established in 1993 when three local physician practices were acquired by Our Lady of the Lake Hospital, Baton Rouge, LA. Now, with 65 clinical providers, Lake Primary Care Physicians is one of the largest hospital-owned ambulatory care networks in Louisiana. It serves a nine-parish area and sees almost 300,000 patient encounters per year.
In recent years, the physician network has seen significant improvements thanks to its benchmarking efforts, says Curtis Chastain, MD, president of the network. It has achieved better control of network expenses by measuring cost ratios and comparing them to national and regional standards. Days in accounts receivable were reduced from 56 days to 28 days. Physician staffing ratios in each practice were monitored and brought within standards by attrition. The network has also improved revenue by 10 percent through benchmarking physician performance metrics.
Changing employee mindsets was one of the key challenges, says Dr. Chastain. To start the cultural change required, the network established physician governance. Then, they started to share financials and benchmarking graphics with physicians and managers each month. “Over time, employees who were unwilling or unable to change left the network,” he says.
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Beyond changing the culture, the physician network also began aggressively examining all contracts, expenses, or other metrics that fell out of line with established benchmarks.
Having a level playing field is critical when benchmarking physician practices, Dr. Chastain says. To be successful, hospitals that own medical practices should “consolidate clinic operations and reporting mechanisms as much as possible so that each clinic or cost center is held to the same accountability standards.”
In addition, Dr. Chastain urges hospital finance leaders to “make absolutely sure that the accounting model that is being used is accurate and consistent on a monthly basis,” he says. Otherwise, all credibility is lost.”