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Mapping Your Medical Staff Development: Keys to Success

Posted by Matthew Smith on Feb 26, 2013 10:21:00 PM

Medical staff development mappingTraditional medical staff development planning is no longer enough. In today’s market, hospitals need to understand the physician segments within their medical staffs and create relationship-building strategies focused on meeting physicians’ lifestyle, financial, and status needs.

In most hospitals, medical staff development planning begins and ends with the organization’s needs. The hospital determines its market requirements, prioritizes specialties for development, allocates recruitment funds, and hopes to connect with physicians interested in relocating. This level of planning is important, but it does not go far enough. In today’s tight market for physician talent, there is a big gap between what a hospital needs and what it can easily get.

Better performing hospitals and health systems create powerful physician strategies by taking staff development planning one step further. In addition to looking at their own needs, they identify the needs and aspirations of key physicians and physician groups. The resulting psychosocial “map” enables these hospitals to develop individualized strategies for building strong physician relationships.

Understand Physician Motivations

How do you map your medical staff? Start with a traditional medical staff development plan. Look at revenue and contribution margin by specialty, and overlay market share data and demographic projections. Prioritize the specialties by profitability, growth opportunity, and strategic value, and develop recruiting targets.

Now, instead of launching directly into recruiting, investigate and categorize the concerns, aspirations, and priorities of the various physicians within these target specialties. In my experience, physicians today fall within a number of different “need segments”:

Lifestyle. One segment is made up of physicians who are very interested in work/life balance. They are typically younger physicians who do not want professional demands to overwhelm their family responsibilities. This drive is most common among primary care physicians, but it is becoming more prevalent among specialty providers.

Financial. In today’s environment of declining reimbursement and rising practice costs, many physicians are very motivated by financial pressures. This includes family practitioners with lower incomes and highly trained specialists who want a greater payoff on their career investment.

Status. A third major driver among physicians today is the need for status and recognition. This need segment cuts across the entire physician spectrum, from doctors who want to be offered the opportunity to reinvent healthcare delivery to entrepreneur physicians looking for business leadership opportunities.

There is no such thing as a doctor who is focused exclusively on lifestyle issues or an MD who is motivated purely by financial concerns. Rather, physicians generally experience all these motivations in varying degrees. Underlying them all is the desire to practice medicine without distractions. The point is to understand how these motivations exist within your medical staff so you can engage physicians constructively.

Develop Alternative Solutions

After you have mapped your medical staff in terms of their motivations and aspirations, work with individual physicians and groups to develop alternative strategies for meeting their key needs.

Physicians with lifestyle priorities

Hospitals can take a variety of approaches to deliver on the needs of physicians with lifestyle priorities. For many, an employment arrangement will be the most effective means. Hospital employment can stabilize the practice environment for physicians and, within a large group, limit call demands. Well-run employed groups will also take many of the headaches of practice management away from physicians.
Physicians with financial priorities.

Hospitals are also in a good position to help physicians satisfy financial needs. The best way for primary care physicians to supplement their income is to develop sources of ancillary revenue. Hospitals can facilitate this by creating an employed multispecialty practice that incorporates both primary care and specialty physicians. CT, MRI, and other ancillary services structured within this group can increase physician income by 15 percent or more. In addition, improved practice management can lead to further improvements in billing and collections.

Procedural specialists who are focused on financial priorities often require a different approach. These physicians have many options before them, so hospitals should be willing to offer more. When working with surgical specialists, creating a joint-venture ambulatory surgical center (ASC) continues to be the best avenue. ASCs offer significant profit potential for physicians and great strategic value for hospitals.

Physicians with status needs

Hospitals can partner constructively with physicians who are focused on status by giving them opportunities for leadership. One effective approach is to establish a “center of excellence” within the hospital and appoint physicians to comanage it. For example, engage key neurosurgeons to provide leadership for a hospital spine center. You can also provide an ambitious physician with an opportunity to innovate in the area of care delivery—for instance, as medical director of a joint venture endoscopy center. Mapping your medical staff by needs and aspirations—and using the map to forge new physician connections—can help a hospital achieve a variety of financial, strategic, and marketing goals.

Case Study 1: Penetrating a New Region

A hospital in the Midwest struggled with a poor payer mix in its primary market. Recognizing the need to reduce its dependence on this market, it sought to expand into a secondary market with more favorable financial demographics. The organization identified key surgical specialties it needed to develop, then took the extra step of engaging a number of surgeons in discussions about their needs.

The talks revealed that the physicians were dissatisfied with schedule access, turnover times, and anesthesia coverage at the local hospital’s OR. In addition, the surgeons were looking for investment opportunities to supplement their income.

The hospital offered to partner with the surgeons on creation of a joint-venture ambulatory surgery center. The ASC was run using a new collaborative leadership model. A group of surgeons established the center’s direction, and day-to-day management was shared between a medical director and the OR nursing director. Through physician leadership, the ASC emphasized efficient perioperative processes and engaged a service-oriented anesthesia group. Over several years, the center provided a 68 percent annual return to the surgeon investors and created a significant new revenue base for the hospital.

Case Study 2: Protecting a Key Revenue Stream

A hospital in the Midwest depended on cardiology for more than 30 percent of its total revenue. The problem was that its cardiology staff was aging, and recruiting new providers to the community was difficult. Salary expectations exceeded local benchmarks, partly because of the age, payer mix, and seasonality of the local patient population.

Discussions with the cardiologists revealed a wide range of financial needs, many of them stemming from practice management inefficiencies. The hospital addressed these problems by partnering with the physicians to develop a cardiovascular institute.

The institute was governed by a board made up of both hospital administrators and physicians. By incorporating ancillary services and cardiac rehabilitation, the institute provided new sources of income for the physicians. Better practice management resulted in better revenue cycle performance, and improved infrastructure and IT support led to a better practice environment. Altogether, these enhancements increased physician income by approximately $100,000 per provider. The institute also provided attractive leadership opportunities for several physicians.

The improved practice environment and income potential enabled the hospital to recruit two new cardiologists within six months and stabilize its crucial cardiology market share for the long term.

Three Guidelines for Negotiation

Medical staff mapping can help healthcare leaders manage the natural conflict between hospitals and physicians—both the financial conflicts and the conflict of diverging goals. Because relationship building is at the heart of this strategy, it is important to keep in mind three negotiation parameters:

  1. Be open to working with all segments. If physicians perceive that the hospital is doing backroom deals with a select few, you will end up alienating large sections of your medical staff. Although you cannot offer the same opportunity to every physician, make it known you are willing to explore possibilities with every segment.
  2. Realize you cannot work with everyone. Although you are open to working with every member of your medical staff, understand that some physicians simply are not suitable negotiation partners. If an individual or group clings to irrational expectations or cannot display basic courtesy, you will not be able to develop a shared vision or work together constructively.
  3. Make sure every arrangement makes good business sense. Before you enter into any agreement—whether it is an employment arrangement, a joint venture, or a new program—make sure the financial or strategic benefits are in line with the costs. Identify objective measures of success, and build them into the agreement. Develop mechanisms for holding each party accountable for its responsibilities and performance.

The ultimate value of medical staff mapping is that it bridges the gap between a basic medical staff development plan and a set of strong physician relationships. Taking the time to create a shared vision and workable goals with a wide cross-section of physicians will pay off in a high degree of integration between your hospital and its medical staff.

Strategic Provider Planning, Specialty Mix

Topics: Physician Practice Solutions, Physician Recruitment, Physician Acquisition, Physician Acquisition Strategy, Medical Staff Development, Medical Staff Mapping

7 Tactics for Minimizing Losses on Employed Medical Practices

Posted by Matthew Smith on Jan 8, 2013 11:10:00 AM

Written by Sabrina Burnett, Vice President, and Cami Hawkins, Managing Associate, Health Directions | Published by Becker's Hospital Review

Employed Physician PracticesHow much money do hospitals lose on employed physicians? According to the New England Journal of Medicine,operating shortfalls range from $150,000 to $250,000 per provider during each of the first three years of employment. But for many hospitals, these initial losses are just the tip of the iceberg. 

Mistakes that occur early in the physician employment process can add to hospital costs while decreasing long-term revenue. For example, poor financial modeling can mask future problems with practice expenses. Missteps in contracting and billing can reduce practice payments. Misaligned incentives can permanently suppress practice revenue. All told, these early mistakes can swell the total cost of physician employment. Hospitals that pursue even a modest employment strategy can easily lose several million dollars per year. 

How can hospitals avoid excessive financial losses? The solution is to create a comprehensive physician onboarding process that preventively addresses the main causes of high costs and low revenue. The following seven tactics will help hospitals minimize losses by effectively integrating newly employed physicians. 

(Please click on the button, below, to continue reading)

Topics: Clinical Integration, Employed Physicians, employed physician practices, Employed Medical Practices, Physician Practice Solutions, Physician Onboarding, Physician Practice Acquisition, Physician Employment Models

Top 9 Physician Recruitment Perks Offered (Other Than Salary)

Posted by Matthew Smith on Nov 29, 2012 11:05:00 AM

Physician RecruitmentSalary is the most basic component of any physician recruitment and compensation package, but what are the most common benefits outside of salary that hospitals and practices offer physicians? 

According to Merritt Hawkins' 2012 report of physician recruiting incentives, there are several primary perks, including signing bonuses and payment for continuing medical education. Here are nine of the most common benefits, based on the study's examinations of physician job searches last year.

1.    Malpractice insurance (offered in 99% of searches)
2.    Pay for continuing medical education (98%)
3.    Health insurance (97%)
4.    Relocation allowance (95%)
5.    Retirement benefits (82%)
6.    Signing bonus (80%)
7.    Disability (75%)
8.    Education forgiveness (26%)
9.    Housing allowance (5%)

Strategic Provider Planning, Specialty Mix

Topics: Employed Physicians, employed physician practices, Physician Practice Solutions, Physician Recruitment, Physician Onboarding, Physician Acquisition, Physician Acquisition Strategy, Physician Practice Acquisition, owned physician practices, Physician Employment Models

Infographic: Using HealthIT More Effectively

Posted by Matthew Smith on Oct 23, 2012 1:07:00 PM

This HealthIT infographic, created by IOM, emphasizes that although recent advances in healthcare have been made, the U.S. healthcare system has far to go. Using technology, what’s possible for healthcare? How can we:

  • Use Information Technology More Effectively
  • Create Systems to Manage Complexity
  • Make Health Care Safer
  • Improve Transparency
  • Promote Teamwork & Communication
  • Partner With Patients
  • Decrease Waste & Increase Efficiency

What's Possible with Healthcare? 7 Goals for Healthcare Disruption

Topics: HealthIT, Infographic, Physician Practice Solutions, Patient Satisfaction, Hospital Technology, IT, Healthcare Infographics

More Wyoming Doctors Opting for Physician Employment Model

Posted by Matthew Smith on Oct 23, 2012 12:26:00 PM

By Becky Orr, WyomingNews.com  borr@wyomingnews.com

physician employmentThe days of doctors owning their practices soon may be as rare as house calls and low-cost care. More independent doctors across the U.S. now work for hospitals.

The trend is happening in Cheyenne too, as more doctors are joining the staff of Cheyenne Regional Medical Center through its Cheyenne Regional Physicians Group. Doctors say joining a hospital’s staff enables them to focus on medicine without worrying about the business headaches.

Merritt Hawkins, a national doctor recruiting group, surveyed medical residents across America in 2011. It found that only 9 percent said they were ready for the business side of a practice. Hospitals benefit from the recent trend because they can treat more patients and make more money. Doctors who work for hospitals can refer patients to these hospitals for tests and procedures.

Hiring doctors also helps hospitals compete with outside health-care systems. Doctors can provide the medical care that patients need to stay in their communities. But critics warn the trend may raise patient costs and fees. They say it creates monopolies and could hurt the bond between doctors and patients.

The trend shows no signs of slowing down. In just two years it is predicted that hospitals will account for more than 75 percent of all new doctor hires in America, Merritt Hawkins reports. Five years ago, about 25 percent of the country’s doctors were employed by hospitals or large physician businesses, said Dr. John Lucas, chief executive officer at Cheyenne Regional Medical Center.

Now 50 percent work for hospitals. In three or four years, about 75 percent will do so, he added. "The days of the independent doctor who’s fully autonomous are pretty much coming to a close,” Lucas said. CRMC’s Cheyenne Regional Physicians Group employs doctors who once were in private practice. It also hires new doctors to the area to fill medical specialties that the community needs.

Only a few doctors joined the group when it started a few years ago. But by fiscal year 2013, 55-75 doctors n about 40 percent of Cheyenne’s physicians n likely will work for the group.

Why they join

Judy Newton of Cheyenne is retired from a career in health care. She worries about the hospital acquiring doctors who once had their own practices and says it has affected Cheyenne.

“A tremendous amount of good doctors left town because of what’s happening,” she said. “I can tell you that it seems to demoralize them.” She was speaking of doctors who left private practice.

“They are now at the beck and call of the board of the hospital and can be fired,” she said. “When they had their own practice, it was their practice,” she said. Patients could have fewer choices for health care if more doctors work for the hospital, Newton added. “If you only have one cardiology unit and it all belongs to the hospital,” choice is limited, she said.

Cheyenne Regional is not forcing doctors out of private practice, Lucas said. Nor is it trying to get all of the city’s independent doctors under its control, he added. Instead, doctors are asking the hospital to hire them, said Paul Panico, the hospital’s executive vice president and chief operating officer.

About 70 to 80 percent of new doctors in America want to work for hospitals or health systems, he said. Their reasons include uncertainty over health-care reform and reimbursements from Medicare and other insurers.

New doctors also seek hospital employment to give them more normal hours and time for family, Lucas said. Many times doctors find that their reimbursements from Medicare are cut, Lucas said. “Their reimbursement is better if they work under the hospital’s umbrella,” he added. Many doctors start their careers with medical school debts up to $250,000. They don’t want added debt from setting up a private practice, Lucas said.

The Cheyenne Children’s Clinic formed 42 years ago and joined the hospital group in 2009, said Dr. William Horam, one of its pediatricians. The transition from private practice took five years and wasn’t entered into lightly, he added. It began when the practice tried unsuccessfully to hire another doctor. Prospects were not interested because the practice couldn’t pay enough. The clinic joined the hospital and has since hired four pediatricians. It now has 10 pediatricians, one midlevel physician’s assistant and a nurse practitioner.

“We became competitive,” Horam said, adding that the hospital provided financial stability. “We see that we are aligned with a health system that enables us to have a very good quality of care for our patients.” The then-private practice wanted to be part of an electronic medical records system. But the $400,000 cost was out of reach. CRMC is creating a system now that the Children’s Clinic and others can use.

Health-care reform

“Our strategy in Cheyenne is to achieve clinical integration,” Lucas said. That means doctors and the hospital must communicate better. Doing so will help stop duplication of care. The federal Affordable Care Act is a large driver of the changes under way in medicine. But even if the act is repealed, health reform will move ahead, Lucas said. Panico added that there will continue to be pressures to reduce costs. Explained Lucas, “We want doctors to sit at the table with us to make sure the community needs are being met.

“Our goal is to have high levels of physician engagement and satisfaction. We want to support the doctors. That’s the ultimate objective, whether they are employed or independent.

“We want this to be viewed as a great community to work in for doctors.” The hospital does not want to be the doctors’ boss, Lucas said. “We want them to be our partners,” he added. It costs hundreds of thousands of dollars for CRMC’s physician group to hire a new doctor, he said. But the hospital also helps private doctors add physicians. “We’ve been doing that for years,” Lucas said.

Before it can help a private practice, CRMC must get approval from the federal government, based on community need. The hospital provides sign-on bonuses for new doctors at private practices that it has helped, along with about $90,000 to help pay medical school loans.

It does the same when it hires doctors. “We’ve got to be working together to provide the best quality at the lowest possible cost because the country’s going bankrupt with the health-care system,” Lucas said. Do fees rise?

Having doctors on the hospital payroll should mean lower patient costs because expenses are spread over a larger patient base, officials say.

But doctors joining hospitals actually can increase patient fees, according to the Aug. 27 Wall Street Journal. An article focused on a patient who had a routine echocardiogram at his cardiologist’s office. He found that a second test cost four times as much as the first exam he had just six months earlier.

The first test cost $373; insurance paid $1,605 for the second. The tests were the same, given at the same office by the same cardiologist. But the private practice had sold to a hospital system between the first and second test.

The difference in payments has to do with how Medicare reimburses hospitals and doctors for outpatient services under Medicare Part B, said Alison Szot in an email. She works for Medicare News Group, an online agency that provides information about Medicare to the public. She wrote that when a hospital acquires a physician’s practice, the practice can be classified as part of that hospital’s outpatient department. That “enables the hospital to be reimbursed by Medicare at a higher rate for office visits,” she added. Medicare pays a doctor at a freestanding practice based on a doctor fee schedule. It pays a facility fee to the hospital and a reduced fee for the physician’s services, she wrote. “The combined fees paid for visits to hospital-based practices can be much higher than rates paid to freestanding practices, as the WSJ piece reported,” Szot said.

Lucas agreed that hospitals can make more money by charging a facility fee. But CRMC does not plan to use this approach, he said. “We’re not going to do anything to cause prices to go up,” he added. “We’re a public hospital here. We’re not about making money for Nashville or Wall Street. We’re about producing value to our community members.”

Rulon Stacey, president of University of Colorado Health (formerly Poudre Valley Hospital System), said Medicare allows hospitals to get higher reimbursements. “But those things are going away quickly,” he said. “We don’t expect that those will be available in the long term.”

Facing competition

The local hospital faces competition from other health-care systems, notably from Fort Collins, Colo. “All we can do is run a good system,” Lucas said. “Our goal is to keep patient care here where it is appropriate. “We want to support the doctors. That’s the ultimate objective, whether they are employed or independent.”

The changes are “massive, monumental and painful,” Lucas said. “Not everyone is happy about it,” he added, but he noted that the hospital is not the cause of the change. “We’re just trying to do a good job to make sure that we’re sustainable.

“If we don’t do all these things, we won’t be sustainable. We’ll have to hand over the keys to somebody that can get all this done, which is not what the community wants. I think our community wants local control of the delivery system.”

Topics: Employed Physicians, Hospital Employment, Hospital Physician Employment, Physician Practice Solutions, Physician Onboarding, Family Physicians, Physicians, Physician Employment Models

3 Success Factors for an Effective Physician Acquisition Strategy

Posted by Matthew Smith on Sep 5, 2012 12:15:00 PM

physician acquisitionAs hospitals and health systems prepare themselves for healthcare reform, they are considering many new physician acquisition strategies. Options include offering physicians a subsidized EHR, assisting practices with recruitment, providing access to health information exchange, and acquiring physician practices.

This article addresses the last strategy: practice acquisition and physician employment. To make a physician acquisition strategy work, hospital leaders need to carefully manage three critical key success factors:

People
As any Fortune 500 corporation that has acquired a smaller company or competitor can attest to, one of the most critical, and often overlooked, success factors is effective transition of people. Not only are financial and business systems merging, so too are the cultures and mindsets of the people running the business.

Physicians, other healthcare providers and office staff experience a significant culture shift when transitioning from an entrepreneurial business to being employees of a large hospital system. While they may not be outwardly expressing fear, anxiety or resistance, these emotions are certainly being felt internally and can have detrimental effects on the bottom line.

Hospitals would be remiss if they did not address these concerns and help physicians and staff assimilate to the new organization. Having new staff participate in an employee orientation program is an obvious strategy to ensure a smooth transition, but to have a more sustainable impact, hospitals should create a customized orientation program that meets the needs of this unique employee population. Physicians in particular should be given the opportunity to participate in customized on-boarding programs exclusive of the standard employee orientation. Give them the chance to participate in a physician advisory group or provide an opportunity to connect with colleagues who have experienced a similar transition. In general, it is important to set clear and realistic expectations for those making the transition and those managing the newly acquired practices.

Processes
As a physician practice is acquired and transitioned, its internal processes will change. This requires careful review and planning. First, the following questions should be considered when crafting a transition strategy for the physician:

  • Is the physician on staff at competing hospitals?
  • Does the physician share call coverage with physicians on staff at the employing hospital?

Who are the physician's main sources of referrals? If those sources are physicians, where are those physicians onstaff?

Second, consider needed changes to practice processes. Key questions include:

  • What changes to the operational policies and procedures should be made?
  • Will the practice’s vendors change?
  • Will the practice accept the same insurance plans?
  • How will patient service be affected?
  • Will there be a new financial policy?

Systems
During the acquisition process, review the practice’s current IT systems and determine how to transition them to the hospital systems. Systems involved may include an electronic medical record, a patient scheduling system, e-prescribing and laboratory interfaces. As these systems are reviewed, a data migration of patient medical or demographic information may be considered to save the time and money of re-entry.

Most practices have a practice management system for performing billing. Since most hospitals have their own system, the practice PM system will not be used after the transition. However, since most hospitals don’t purchase the physician's accounts receivable, the physician will be responsible for continuing to work outstanding accounts receivables and collect on outstanding claims. If the physician was hosting this system on a server in his or her office, the hospital will need to determine how to accommodate the practice’s billing needs during the system transition.

Strategic Provider Planning, Specialty Mix

Topics: Employed Physicians, employed physician practices, Physician Practice Solutions, Physician Recruitment, owned physician practices

33% of U.S. Physicians Plan for Hospital Employment within 10 Years

Posted by Matthew Smith on Aug 10, 2012 12:32:00 PM

Employed Physicians, Hospital EmploymentOne-third of U.S. physicians plan to leave private medical practice within the next 10 years, with a significant percentage of those doctors choosing hospital employment, according to a new nationwide survey conducted by the Atlanta-based Jackson Healthcare, a recruiting firm.

The online survey of 2,218 physicians that led to the report, “A Tough Time for Physicians: 2012 Medical Practice & Attitude Report,” found that fully 34% plan to leave private medical practice within the next decade. The three top reasons, as articulated in the report, were:

  • Declining reimbursement
  • Capitation
  • Unprofitable practice
  • Business complexities and hassles
  • Overhead and cost of doing business too high

The practice trends survey was conducted between March 21 and April 15, 2012.

Where are they going? The top new destinations for physicians leaving private practice are, in order:

  • hospital employment
  • single- or multi-specialty practice owned by hospital or health system
  • independent contractor or locum tenens
  • non-clinical teaching position
  • non-clinical administration position.

(In terms of where the physicians surveyed are currently, 21% are in solo practice; 19% are in a single-specialty practice; 12% are in a physician-owned single- or multi-specialty practice; and 4% are in a non-physician-owned multi-specialty practice.)

Among those physicians planning on leaving medical practice entirely, the report cites seven top reasons physicians are leaving medicine or retiring:

  • “economic factors, such as medical malpractice insurance, overhead, electronic medical records, etc.
  • “don’t want to practice in the era of healthcare reform”
  • “burned out”
  • “pursuing different paths outside the practice of medicine”
  • “lifestyle choice”
  • “age 65+”
  • “retiring early because financially able”

The Jackson Healthcare report also included and analyzed the findings of two separate surveys, one on Medicare and Medicaid trends, and the other on attitudes towards healthcare reform.

The Medicare/Medicaid survey, conducted between April 19 and April 29, 2012, found that 17% of physician practices are currently participating in accountable care organizations or patient-centered medical homes in 2012, while another 9% were planning to do so before year’s end. In contrast, 74% will not be participating in an ACO or medical home in 2012.

Meanwhile, the healthcare reform-related survey, conducted between May 29 and June 4, uncovered a very wide range of attitudes towards and perspectives on the Affordable Care Act (ACA), the federal healthcare reform law passed by Congress and signed into law by President Obama in 2010.

Among those surveyed, 55% of physicians believed the law should be repealed, but fully 31% believed in contrast that only a single-payer system could achieve true healthcare reform.

And though 68% did not believe that the ACA would have a positive impact on the physician-patient relationship, 54% of respondents agreed that the new law would increase patients’ access to healthcare.

 

 

 

Article originally published by Healthcare Informatics.

Topics: Accountable Care, ACO, Employed Physicians, Hospital Employment, Physician Practice Solutions

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