Effective support staffing promotes flexibility and growth.

From our sponsor Kaufman Hall & Associates


Given constant quality and payment pressures, healthcare providers are looking to improve efficiency and effectiveness in all parts of their organizations. Systemwide cost-cutting initiatives have become a common practice, but physician practices operate differently from hospitals and require unique approaches.

With owned physician practices, proactive executives and managers are starting to reassess long-established processes, such as how to determine appropriate support staffing. Many health systems are struggling with the high costs of physician practice operations, and staffing is the largest contributor to those costs. Support staff comprise approximately 37 percent of total practice costs in multispecialty practices (MGMA Cost Survey: 2014 Report Based on 2013 Data, Medical Group Management Association, 2014). The median loss per employed physician was $128,000 in 2015, up from $58,000 in 2004 (MGMA 2016 Cost and Revenue Report: Based on 2015 Survey Data, MGMA, 2016).

A More Holistic Approach

Historically, hospitals have allocated support, or “nonprovider,” staffing on a per-physician FTE basis, using median industry benchmarks. So essentially, the number of support staff members is based on the number of physicians in practices.

Two Nonprovider Support Staffing Formulas
Two Nonprovider Support Staffing Formulas

The Benefits of a Better Model

A more comprehensive approach to physician practice nonprovider staffing requires greater rigor and routine analyses. To start, each manager and director should conduct regular assessments of physician practice operations. A close look at day-to-day performance trends over time and how staffing contributes to those trends will help them identify areas in need of improvement.

This approach promotes a culture of transparency and data continuity that results in multiple potential advantages, such as the following:

  • Clear visibility into physicians’ activities and the operational performance of various practices
  • Enhanced accountability, with the capacity to continually identify areas for improvement
  • The ability to respond to shifts in patient demand with real-time staffing

Each of these benefits is increasingly important under a value-based care delivery and business model. By regularly tracking and assessing physician practice performance and needs, leaders gain insight into staffing systemwide. They are able to pinpoint why individual practices may be underperforming financially at a time when the need to control costs is paramount. At the same time, they can identify physicians who are working at or near peak capacity and provide those practices with additional staffing to meet their unique needs.

New care delivery and payment models require this type of enhanced accountability. Rather than staffing all physician practices according to a uniform formula, staffing adjustments can be made practice by practice so that individual providers are better equipped to respond to demand. To address the needs of specific communities and provide care across a population, organizations can adapt staffing according to demographics and output—such as patient acuity and outcomes—and the level of preventative care required and provided.

A significant cultural shift will be needed to implement a new nonprovider staffing model. Physician and stakeholder input and involvement is critical. The model only works if there is an appropriate level of collaboration with individuals who provide care and drive performance. Physicians will be more inclined to buy into collaborative approaches as they recognize that staffing will be determined by factors related to their needs, rather than on cookie-cutter formulas that limit flexibility and growth.


Cynthia Peters Arnold is vice president, Kaufman, Hall & Associates, LLC, Skokie, Ill., and a member of the firm’s strategic and financial planning practice.

Publication Date: Saturday, April 01, 2017