How to Juggle All the Management Aspects of a Large Facility-Based Physician Group

In recent years, trends regarding physician practice type and ownership have shifted away from solo physicians toward larger facility-based physician groups. 

Compared to solo and medium physician practices, large physician groups demonstrated the ability to achieve economies of scale, with improved purchasing power with vendors, and negotiation advantages with health plans and health systems. Physicians in large groups also reported predictable higher salaries, co-worker support from other physicians, and greater access to more patients than solo providers.

However, running a large facility-based physician group comes with unique requirements and responsibilities. According to a 2020 MGMA report involving healthcare leaders across the country, physician group management revolves around these 5 key aspects:

1. Staffing (hiring, retaining, retiring of management, staff, and providers)
2. Cost and revenue management (cost reduction, collections, contracting, revenue streams)
3. Practice transformation (growth, mergers and acquisitions, consolidation)
4. Technology (adding and updating software and hardware, EHR)
5. Operations (practice efficiencies, workflows)

In the post-COVID era, more physicians are turning towards large facility-based physician groups. With many of these groups scaling up at unforeseen rates, it is important for physicians and practice managers to figure out innovative and cost-effective ways to juggle the management aspects of a large facility-based group.

Staffing

Many health facilities struggle with the high costs of physician practice operations. Staffing is the largest contributor to these costs, with support staff comprising approximately 37% of total practice costs in multispecialty practices.

Traditionally, hospitals have allocated non-provider support staffing on a per-physician FTE basis, using median industry benchmarks. This meant the number of support staff was determined by the number of physicians in the practice group. However, more practices are taking on a more comprehensive approach to support staffing.

Instead of basing the need for support staff on physician numbers, managers can conduct assessments of the physician practice operations to determine day-to-day trends and how staffing contributes to those trends. With this data, managers can then identify areas of overstaffing and areas in need of improvement.

This staffing model enhances accountability, allowing managers to continually identify areas for improvement while also improving the facility’s ability to respond to changes in patient demand with real-time staffing.

Cost and revenue management

The 2020 AMGA Medical Group Operations and Finance Survey found that although most groups saw improved financial performance in 2019, independent medical groups generated a profit, while health system-affiliated groups faced a loss.

In the post-COVID era, operational costs are going up at rates disproportional to revenue increases. It is now imperative for large facility-based physician groups to find ways to drive more revenue while keeping operating expenses contained and within budget.

Hospital managers should understand all the factors that influence their bottom line. These include IT costs, liability costs, support staff, payer mix, building and occupancy expenses, and investment per physician. 

In the current digital landscape, it is becoming increasingly important for practices to take on Practice Management Systems (PMSs) to implement electronic processes in running a practice. A good PMS should align with the physician group’s needs and requirements, and should work with the practice’s EHR. With the PMS, you can then carry out tasks like verifying insurance eligibility electronically before visits, or submitting claims electronically to save time and effort.

Practice transformation

Practice transformation involves a healthcare system making organizational changes in service delivery to ensure quality patient-centered care. It requires the incorporation of all teams involved and building relationships with patients to provide quality care to patients.

The Centers of Medicare and Medicaid Services (CMS) designed the Transforming Clinical Practice Initiative (TCPI) to help practices understand how to create a clear vision and goals to achieve sustainable transformation. The TCPI had 5 phases of transformation, namely:

• Set aims
• Use data to drive care
• Achieve progress on aims
• Achieve benchmark
• Thrive as a business via pay for value approaches

To ensure the hospital is sticking to the tenets of practice transformation, it is important for large physician groups to have transformational leadership targeted at strengthening physician engagement and retention, aligning physicians with the objectives of the organizations, and improving quality of care and patient safety.

Together with the physicians, the hospital management will need to assess and review progress regularly, updating goals and timelines accordingly. Value-based care models are the future of healthcare, and now is the best time for hospitals to begin their transformational journey.

Technology

Now, more than ever, it has become imperative for physician practices to leverage the advances in the technology sector of the health industry. Technology adoption in a hospital setting usually depends on cost effectiveness analysis, feasibility, expedience, potential success, and profitability. Most health facilities have Health Technology Assessment (HTA) committees in place to guide the process. 

Digital technology, particularly, has carved a place for itself in the medical field, especially in an uncertain post-COVID era. Innovations like Remote Patient Monitoring (RPM) and telehealth visits allow physicians to monitor and treat patients in real-time even when they are not at the hospital, while Electronic Health Records allow instant access to patient information, with a patient portal fostering patient-centered care.

Operations

The challenges of operations in large physician groups are directly proportional to increase in practice size. Studies found that 83% of hospital-based physicians had difficulties recruiting office personnel that had experience with ICD-10, value-based care, risk contracting, and MACRA.

Larger physician groups were also more focused on the achievement of long-term business goals than immediate pain points like solo physicians.

‍

For physician-owned practices, the combined burden of treating patients and carrying out administrative tasks can be detrimental to productivity and quality of care. Hiring a practice management company with the capabilities for tech integration between the facility and billing management as well as other administrative functions can ease that burden.