Efficient processes require less time, effort and resources to produce better outcomes. Recognizing that staff in medical practices are already running very slim, and the labor of additional projects may be difficult to take on, it is important that practices create lean physician practices by examining processes, eliminating waste, using the most highly trained staff members to perform tasks only they can perform, and identifying revenue opportunities to yield gains in productivity, patient satisfaction, and quality of care. Most problems within a practice can be traced back to a process problem as opposed to a people problem.
There are several opportunities to improve financial performance through practice transformation. Some may include practice profitability (revenue and cost), practice referrals, practice “right sizing”, IT strategy, improved payer positioning, service portfolio by market, fee schedule/price negotiations, and best practice sharing.
Revenue is optimized by increasing and balancing both capacity and demand. Provider productivity is the lever on capacity. Revenue events and capture are the levers on demand. Three major strategies for driving enhanced revenue performance are improve productivity of billable resources, increase billable events and capture rate, and add new billable services. There are a variety of levers in the practice that are used to execute these strategies. These include ancillary services, billing and collections, coding standards, income distribution, physician extenders, population management, process optimization, and resource utilization.
There are three primary strategies to address the two major components of practice cost. Practice cost management strategies include expense management of general operating cost, process optimization and resource utilization of support staff cost.
Physician practices face significant challenges with execution: Prioritizing physician strategic goals, objectives and allocation of funds can create conflict during the implementation process. Needs of the primary care physicians and specialists may vary. Objectives such as growing margins, expanding the funding base for future needs, changes to governance and structure, market share growth, increased patient referrals, utilization, expanded clinical services, information technology infrastructure, and improved community access emphasize the need for physicians to enhance high quality and efficient patient care.
Successful physician practices understand and measure their practice performance and are mindful that there are four perspectives on Value in a Practice that should be considered. They include:
- Patient View: Convenient access, Caring Environment, Efficiency, and Health status
- Physician View: Quality of care, Practice income, and Personal time
- Health Plan View: Quality of care, Access, Cost of care – both short-term impact and long-term trend
- Health System View: Quality of care, Referrals to system, Practice profitability, and Competitive position with payers
How does your practice measure in these perspectives on Value?