Finding that Right Balance with Physician Practice Management

Four consultants at Spectrum Health Partners (SHP), with more than 100 years of combined experience, provide Physician Practice Management services.

Will Moore, Mark Gorman, Robert W. Kirk, and David Lundquist each bring different education and backgrounds to their work (including Accounting, Finance, Business Management, Engineering, Human Resources), but all have years of experience with, and a passion for, working with physicians and advance practice providers. Their assignments include hospital-employed physicians/physician groups, hospital-affiliated provider networks, as well as independent physician group practices.

Will Moore, CPA, CIRA, FHFMA, Co-Founder and Partner at SHP, has a pragmatic approach when tasked with increasing revenue and improving the efficiency of medical staff.

“In the past 15 to 20 years there’s been an expansion of physician employment arrangements,” he said. “Many of those will be inside of the hospital proper. Something that hasn’t changed in the last 15 years, however, is how organizations are still struggling with managing physicians,” he said.

“Most of the physician employment arrangements that we routinely see are in various degrees of loss. A lot of places don’t understand the downstream impact of revenue that may be related to referrals, consults and admissions. There’s a strategic disconnect in the way that physicians are employed.”

Will continued, “It’s pretty straightforward. When discussions come up about physician employment, or about bringing on a newly employed physician, I ask, ‘What’s your motivation for this?’ If it’s Primary Care specific, then we need to have a realistic understanding and clear evidence that we have an underserved community and outmigration and leakage of Primary Care services. If it’s on the specialty side, along those similar lines, we look at what’s happening with outmigration from the community – where are those patients going? What competitors are involved? Who is referring outside the area? You can pin that down.”

“Hospitals and health systems need to understand the revenue outlook with employed doctors,” he explained. “You can hire half a dozen neurologists and spend a tremendous amount of money, but most of the work they do is on an outpatient basis and won’t generate an enormous amount of revenue for the hospital. Ideally, it all ties back to strategic planning. You want to understand your market and your role within it. You want to shape and define it as opposed to just reacting.”

“Everywhere I go, I get involved in gaining an understanding of the professional group relationships within a facility,” Will said. “This includes the hospitalists, the radiologists, pathology, anesthesia, ER, etc. Looking at the contracts and seeing what those relationships look like, it’s shocking how many times I’ll see opportunities or something that I question. ‘Why did they structure the contract in this fashion? Are they open to reviewing it?’ I find a lot of mileage in that regard.”

Mark Gorman, a Principal with SHP, is blunt about the expense side of physician employment. “Physicians tend to be one of the larger expense categories for a medical facility – whether it’s call pay, coverage pay, or straight up employment. Employing physicians costs a lot. Administrators have to figure out how to convert and monetize that expense – to achieve the most revenue while also providing the highest quality of care.”

With 30 years of healthcare leadership experience under his belt, Mark reflects, “There are fewer and fewer independent physicians, especially in markets that are not affluent. Even in the more affluent markets, you tend to find most physicians are employed by one of the major health systems in the area. That’s to create a closed network where patients receive all their care within that system.”

He continued, “A lot has to do with market capture, but, more importantly, it also pertains to quality of care because of inoperability and the lack of record sharing across multiple systems and possible duplication of services. When that happens, costs go up and quality goes down. So, health systems try to capture as many folks as possible within their network, and they do that through physician employment, whether it be primary care or specialty medical services.”

“Healthcare organizations want the highest level of patient care, at the lowest cost, with the greatest output,” Mark summarized. “There are multiple different strategies, tactics, techniques, and processes that can be put in place to achieve that. I work with clients to make sure the goals and incentives are aligned for all the stakeholders – the patient, the hospital, the physicians, and the staff.”

Robert W. Kirk, FACMPE, a SHP Principal, said the reason he went into consulting is to help clients navigate the complicated and ever-changing healthcare environment.

“I enjoy working with physicians and executive leadership on identifying opportunities that will allow greater access to patient care and the ability to see patients in an efficient way,” he began. “Creating access for patients is extremely important because it tends to be limited. We consider ways to make changes to benefit the patients as well as the providers and staff, so they can provide timely quality of care in an efficient and effective environment.”

Robert carefully tracks the ongoing transition to a value-based care model.

“The current payment models are based on “sick care” and on the number of clicks that a provider has to do, clicking the mouse for the EHR,” he said. “Value-based care is the future, but the problem is that many payors are still lagging, including the federal government. We want the providers to give high quality care under the value-based care model (which they should, and they will), but the payor system hasn’t incentivized them in a timely fashion to be able to do that presently. It’s getting better, and that’s moving our healthcare system forward. But right now, I still see this as a major problem. The payor system needs to appropriately compensate the providers and the healthcare systems for their care.”

David Lundquist, MBA, a SHP Principal, disclosed that his first job as a CEO was at an institution owned by a group of physicians.

“I’ve always enjoyed working with physicians – even though they can be viewed in a negative light by many administrators,” he said. “The better you treat them as humans, the more success you’ll have.”

David said all too often, physicians are viewed as assets, liabilities, or as “something other than human.” He said when he treats physicians with respect, they respond better. “Push comes to shove, that’s what most of them want and need.”

David’s approach is to not to make snap judgements but listen to and understand the doctors and their practices to get a clear picture of what’s really going on.

“At one hospital system where I was CEO, there was a physician who was known to be a pain to everybody. I was advised to get rid of him because he was difficult to work with,” David said.

“No one had listened to him about his challenges and what he needed. I did. I found out that he could not say no. So, he was overcommitted. He accepted way too much work. He was a private physician, not employed by the hospital. He covered the ICU at the hospital, he was offering coverage at another hospital, he provided care at the local prison, and he was trying to work his own practice.”

After working out a plan with this physician, his schedule improved, and his time was used more effectively.

“He turned out to be the best physician there,” David summarized. “He ended up being one of the leading and most respected physicians in the organization.”

For more information about Physician Practice Management see the linked page, call (615) 778-4650 or complete SHP’s online contact form. To connect directly with Will Moore, click here. To find out more about Mark Gorman, click here. To connect directly with Robert W. Kirk, click here. To see David Lundquist’s contact information, click here.

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