What it Takes to Improve Your Financial Performance – How to Engage your Physicians
By Linda Albery, EdD, RN, Senior Director, iVantage Health Analytics.
As the country’s healthcare systems experience further declines in reimbursement and looming downgrades, the spotlight is increasingly turning to the financial losses coming from employed physicians.
We are hearing more and more concern from hospital system executives about the poor financial performance of the physician enterprise. In their 2013 report, Medical Group Management Association reported a median loss per physician of $176,463. Since that time, health systems have revealed a large range of losses per physicians. One system in the Midwest reported an average loss per physician of $300,000 fully loaded with overhead. Moody’s 2014 outlook on the not-for-profit hospital sector called physician employment “a principal driver of hospitals’ margin pressure”.
It’s now a high priority to identify new ways to engage physicians to improve financial performance. I’d suggest incorporating the following components to your performance improvement journey:
- Tackle productivity expectations – include worked RVUs, hours of operation, time for research and teaching and use of physician extenders.
- Improve operational expenses – evaluate skill mix, use of extenders, non-salaried expenditures, options to consolidate your back office functions, scheduling practices, management of no show rates and reduced practice down time.
- Establish process and outcome targets for both ambulatory and hospital practice. It’s critical that the employment relationship be leveraged to set and achieve performance expectations for both the clinic practice and hospital practices. This step will lay the groundwork for transition from the fee-for-service environment to future risk models of care.
- Leverage the electronic health record to support patient satisfaction, improve care and provider efficiency. Meaningful use is yesterday’s news. The huge expenditure for an EHR must be leveraged in new ways to achieve leapfrog outcomes for patients and drive provider efficiency.
- Rethink your revenue cycle to reduce patient write-offs as deductibles increase. Fight for every dollar, focusing on pre-visit education, standards for pre- and point-of-service collection of patient payment obligations and patient communication to optimize financial yield.
- Provide comprehensive orientation for physicians. Set expectations for performance and engagement requirements for the future. Build these expectations into your recruitment and acquisition processes to foster cultural integration.
- Use and disseminate data wisely. Share data with physicians but take the time to convert data into usable and actionable information. Engage physicians in discerning the most valuable key performance indicators to drive improvement for their practice and create timely dashboards to optimize the data driven culture of improvement.