Susanne Madden

When was the last time you reviewed your partnership agreement? Even if you are not currently contemplating new shareholders or partners, if you haven’t looked at your agreement in the last three or more years, now may be the time. 

Market forces have changed significantly over the last several years, and the partnership agreement you signed in the past may not cover issues like reduced responsibilities to accommodate work-life balance, retiring partners, or how to manage to value- or performance-based contracting in which one partner’s performance can determine if any performance payments get paid to the group at all.

From the perspective of business operations, let’s break out some of the key questions that you should consider in every partnership agreement:

Does the current agreement outline how you will add new partners or shareholders? Is there a buy-in? If so, will that be in the form of financial or sweat equity? Will the buy-in amount or term change (e.g., if it is practice value)? Has a method been determined for assessing that value and has it been incorporated into the agreement?

Will all partners carry equal responsibility and be expected to dedicate equal time to administrative and clinical duties?  Or is there one 'managing partner,' or even a Board of Directors? If so, how are those partners compensated differently? 

How will you address one partner stepping back from their obligations for reasons such as health or family issues or upcoming retirement? Are there clear terms defined to accommodate that, either in the form of reduced compensation or even the ability to hold onto partnership status?

How will profits be shared? Will they be distributed equally or will there be a productivity component involved? What model will you use to determine that? (e.g., relative value units, revenues brought in, etc.) How might that model change over time?

More and more often, we see payer contracts that have ‘value- or performance-based’ components attached to compensation. How will these group-based payments be distributed? Are there penalties to individuals that fail to meet targets, which may put substantial sums at risk for the group as a whole?

Is each partner responsible for their coding and documentation? In the event of an insurance audit that results in ‘take backs,, is the group liable for an individual’s errors?

How will disputes be rectified? For example, if one partner wants to expand or invest but the other does not, how will that be resolved? What happens if you simply can’t get along with a partner anymore-do you have the right to force them out? If so, is there a premium allocation to be paid to that partner in the event of this situation?

Does the agreement designate how far in advance a partner wishing to leave the group must notify the other members? For example, retirement notice should given be at least 18-36 months ahead of time, and it may be prudent to consider that shorter notification periods could result in forfeiture of part of the buy out.

Do the senior partners retain voting rights while more junior owners remain non-voting shareholders?

Addressing your agreements from these angles will not only help you cover your bases in the event of unforeseen circumstances, it also ensures that you are providing the best ongoing governance of your practice for many years to come

Articles

Nine areas that every partnership agreement should consider.

Partnership agreements: Why it may be time for an overhaul

Bundled payments have been around for quite some time. From ‘global’ payments for deliveries to bundling of same-day multiple procedures to episode-based payment models under CMS’ Bundled Payments for Care Improvement (BPCI) Initiative, hospitals and specialists alike have had some sort of exposure to the concept of ‘bundling’. 

More recently, we’ve seen more and more commercial plans looking to the outpatient specialty market to apply the same methodologies. We are now seeing bundling episodes for gastroenterologists, orthopedists, and oncologists. Some of these programs are very straightforward, with the goal being to manage simple procedures, such as colonoscopies, in the most cost-effective way possible. 

Typically, a plan will approach bundling in one of two ways:

The plan may determine the average cost for these services within a geographic region and offer a bundled rate consistent with that

The plan may look at the range of cost associated with a particular practice delivering a service and offer a bundled rate at the midpoint (or elsewhere on the cost spectrum). 

The goal is to bring services that are being delivered at a higher cost in line with less expensive approaches. 

For example, a gastroenterologist may perform colonoscopies at three different ambulatory surgery centers and two hospitals. The cost may vary greatly between places of service. By setting a bundled rate, the physician has to control the resources utilized in order to bring that total cost of care below the budget target to share in the cost savings. Most of these arrangements are ‘upside only’ risk, meaning the physicians get paid as fee-for-service, then a retrospective review of the costs of these episodes are undertaken to determine if the practice came in above or below the budgeted target. Any savings are shared, but if costs exceed the budget, the practice is not penalized for those excesses under most current contracts. However, as these arrangements mature, we expect to see more ‘downside’ risk coming in the future.

While colonoscopies are easily to measure and manage due to the limited number of components involved and relatively rare occurrences of complications, it is infinitely more difficult to manage, say, oncology episodes. But where there is more complexity, there is more opportunity for greater savings.

So, how should practices manage opportunities for bundled episodes of care? 

First, control as much of the cost as possible. 

For example, gastroenterologists that that own ambulatory surgery centers, employ anesthesiologists, and have their own labs are in a much better position to control costs than those utilizing hospital-based places of service, out-of-network anesthesiologists, and external labs.  If you fall into the latter group, sharing the risk with a hospital partner may make sense, and choosing to work with in-network resources can help mitigate risk. 

Second, effectively manage and coordinate patient care. 

Implementing pre- and post-operative processes that help to manage every facet of patient care can ensure minimization of adverse events and keep costs tightly contained. That may not always be so easy to do-particularly when more complicated procedures are involved, or when there is greater involvement across multiple providers (which is the case for oncology). In those cases, implementing care management systems is essential to understand how costs are trending for any given patient’s continuum of care during an episode. Some plans offer assistance with that management (for example, Aetna’s multidisciplinary care teams work directly with patients), but controlling care at the practice level is ultimately the best way to manage your patients’ care. 

 utilize a range of interconnected data to track the care that any particular patient receives across a care episode. Pulling together data coming in from hospital systems, specialists, and other third parties, a patient’s care is tracked along the episode timeline. Pre-built algorithms based on bundled budgets help to forecast costs in near-real time, enabling practices to get in front of any potentially adverse and costly trends before those budgets are blown. 

To ensure the highest quality of care is being delivered across every aspect of delivery, it is essential to monitor physician performance and act upon that data. Many of these bundled arrangements have quality metrics associated with them. For example, Horizon Blue Cross Blue Shield (NJ) and United Healthcare both have components in their colonoscopy bundles for cecal intubation rates and adenoma detection rates that must be above certain thresholds in order for upside cost savings to occur.

As these programs mature, expect to see greater sophistication of care management technology being presented to help manage that care and greater consolidation of services across healthcare providers-whether in the form of clinically integrated networks, super-groups, accountable care organizations, or other models-becoming more prevalent. Partnering with effective vendors, health plans, and self-funded employers will be key for practices wanting to successfully implement bundled arrangements in the future.

Three ways medical practices can manage opportunities for bundled episodes of care.

Mitigating risk on outpatient bundled payment contracts 

It’s Monday morning. Your phones are ringing off the hook, patients are getting squeezed into the schedule any place your staff can find, and it’s looking like it’s going to be another exhausting day. 

But does it really have to be like this? 

Busy offices rarely have the time to pause, evaluate workflows, and attempt to improve efficiencies across the practice. However, unless you make that time, things are likely to stay the same and you’ll repeat those exhausting Mondays over and over. 

First, start with the most obvious issues. For example, figure out what is the single, most recurring annoyance in your practice. Is it being over-scheduled? Patients not getting timely callbacks? The same questions coming up time and again from patients? Narrowing it down to an item or two that you’d like to improve is essential to making any progress at all. Try to do too much at once and you will likely fail, as time is limited and more pressing obligations will always keep popping up. 

Second, put together a small team of people to work on the problem and set aside 30 to 45 minutes a week to work on it. Tapping into those on the ‘front lines’ of the issue often reveals quick solutions. Staff usually know what needs to be fixed and how to fix it, but either haven’t been empowered to fix themselves or simply haven’t had the time to focus on implementing the solution. 

Third, make sure that you are solving the right problem by digging in to the root cause of the issue. I find that working with the ‘

 diagram is very effective at 1) getting to the underlying cause of a problem, and 2) working through how to implement a solution. 

A variety of process improvement tools can assist you in any area of process improvement: from the more complex 

 tool–but the best process improvement projects are usually those where the easiest process for 

team is used, and they can hone their improvement skills over time from there.   

Once you’ve established the problem, its cause, and how you can change it, you need to implement those changes in your practice. 

Start by drafting a staff memo that accomplishes two things: 1) it ensures that your new process gets captured and disseminated to the staff, and 2) it can be used as part of your training materials going forward. As you perfect more and more processes, that library of literature will grow. 

The memo should lay out a few components. It should identify the nature of the problem, quantify why it’s a problem, and state exactly what the team has proposed as the solution. Then ask that everyone to support the change, andlet them know that you will be measuring the outcome. 

Don’t expect miracles overnight. Staff need time to get used to a process change, particularly if it changes the flow of what they do. The key to ensuring that changes will stick is to measure the progress and reinforce the new process any place that you find it is not being implemented routinely. Staff need to practice the new way of carrying out a task, and reinforcement is what gets them there. 

And don’t forget–always go with the easier changes first. Why? Because having some early ‘wins’ will allow staff to feel confident in deploying new processes, and over time the process of continuous improvement itself can become part of the practice culture. If you try to do too much, too soon, your staff may become overwhelmed and everyone will fail in the endeavor. 

It really doesn’t matter whether the issue is administrative or clinical. Identifying a problem, working as a team enabled by process improvement tools to develop a solution, and moving toward implementation is bound to improve how your practice flows.  

Busy offices rarely have the time to pause, evaluate workflows, and attempt to improve efficiencies across the practice. However, unless you make that time, things are likely to stay the same.

Does your office flow?

Millennials have a completely different set of expectations than prior generations when it comes to engaging with the world around them. They are the digital natives and, as such, are used to interacting with their social networks, accessing services, and having the world’s knowledge all at their fingertips.

Healthcare spending represents 17.9 percent of America’s gross domestic product, but the healthcare industry is still in its digital infancy. Unlike most service industries, healthcare providers are still working with 1990s technology: the phone and the fax machine. While many practices have attractive websites, they haven’t invested in the 

Think about it: Millennials are used to booking flights, hotel rooms, hair appointments, and ordering takeout at any time of day or night from the convenience of their smartphones. But when it comes to making a doctor’s appointment, patients typically have to make a phone call during business hours and wait on hold for prolonged periods of time. Millennials expect good experiences when interacting with any service provider. A reasonably functioning website is not enough to create that experience. Primary care practices have to offer millennials access and convenience, too.

Generation Y trusts their social (and social media) networks far more than traditional advertising. They go to the internet first to research their symptoms, then call their doctor (or not). Millennials do not rely on physicians for medical advice as much as previous generations and prefer to do their own online research before booking an appointment. According to a 

56 percent of millennials reported they  visited a primary care physician in the last year, compared to 74 percent of non-millennials.

Approximately half of millennials research symptoms and treatments online before consulting a doctor, and of those, 27 percent will self-treat at home rather than consult or visit a physician’s office.

They not only consult the internet for healthcare advice, they’re also vocal about the care they receive. Sixty percent of young millennials will share their experiences when they are dissatisfied with their friends rather than with their doctors, so it is critical for physicians to solicit feedback from them directly. Giving them an opportunity to express their opinions verbally in the office can help prevent negative reviews online.

Millennials don’t just use the internet to google symptoms and self-treat. They use it to find the best doctors, and the best doctors for them personally. A survey conducted by 

 found that 54 percent of millennial responders use online reviews to find a doctor before scheduling an appointment. What’s more, they are twice as likely than non-millennials to trust personal and social network reviews when it comes to selecting healthcare providers.

Millennials expect that healthcare providers will understand their needs and support their preferences in much the same way as other service brands. Canned advice will not resonate the way that more personalized information addressing lifestyle, health, and happiness does.

 engages its patient community through several key strategies:

It hosts an user friendly website where information is quickly found through the use of icons and labels for popular content rather than presenting the viewer with lots of text to scan. The health system also actively solicits feedback to constantly improve the site.

It offers viewers a quick and easy way to sign up for a "healthy tips" newsletter that ties together the health aspects that millennials particularly care about, such as nutrition, mental health, and wellness.

It features videos with a personal touch: physicians talking about themselves, their practices, and the care they provide alongside patient testimonials. Northwestern encourages sharing of these videos on social media networks.

It houses an extensive library of medical advice, articles, and content making it a go-to consumer destination for good sources of medical information.

Of course, most primary care practices do not have the extensive marketing budget of Northwestern Medicine, but most can readily incorporate Northwestern’s marketing strategies to approach millennials.

5 initial steps to build your millennial marketing strategy

 in ways that will support a high-quality experience.

Become a go-to resource for health information. You can tap into readily available sources of information by interlinking trusted sources into your website, and/or you feature content from your own providers, such as blog posts or reviewed articles.

Use existing technology to its fullest potential. Start with your EHR vendor. Are there patient engagement tools available that you aren’t using such as text message reminders for upcoming appointments? Ability for patients to self-schedule? A portal for patients can access their medical records and securely communicate with the practice at any time? Technology doesn’t have to be expensive, and you may already have access to many digital tools you didn’t know about.

Engage millennials in their care. Setting aside enough time to develop relationships during initial visits can be an essential component of establishing a positive experience.

 from patients by asking them about opporunities for improvement, what services they would like to see from your practice, and if they would like to review your practice online, which can help you attract more millennials. This feedback can also help you to improve your marketing strategies over time to attract millennials and patients in other age brackets. These strategies will provide an ongoing source of information to continue improving and refining marketing strategies, and it may improve your ratings with payers, too.

It’s no surprise that the digital native generation has different communication and interaction preferences. Here are five ways primary care practices can engage millennial patients.

How to market to millennials

If I asked you how your website is performing, you might be tempted to tell me about your search engine optimization (SEO) strategy, how many ‘hits’ you receive weekly, or perhaps you may just shrug and say you don’t really know. You may have invested plenty in SEO and can be easily found online as a result, but what do viewers find when they get to your site? I want to know whether your site truly represents you, your practice, and its culture. Does it convey the personality, clinical philosophies, and quality of care that your practice provides to patients?

Ideally, your website should be a virtual extension of your physical practice. At the very least, it should convey general contact information-phone, fax, hours, location-as well as some specific information about your physician(s), care team, and services. Can visitors easily pick out the most relevant information, such as a phone number prominently displayed at the top of the screen? Do they have to scroll to the bottom of the site, or worse, click into a separate page to find your address?

How well or poorly your site performs even these basic tasks can make a considerable difference between prospective patients deciding to book an appointment with your practice or moving on to a competitor. There is no greater waste of SEO dollars than to drive visitors to a poorly performing website.

Once you have the basics down, you’ll want to go a few steps further and ensure the site is a virtual representation of your physical space. Use your website to showcase your staff, services, and patient satisfaction. As an added bonus, the more useful you make your site, the less time staff will have to spend on the phone answering questions about medication dosage, where to find medical record transfer forms, what certain procedures entail, and so on.

Begin by branding your practice consistently across your physical and virtual assets. Ensure that your logo is highly visible on your site. Use the same colors and fonts on your site as on physical signage, marketing materials, and business cards.

Allow your virtual representation to mirror the care with which you have designed the physical space patients experience when they arrive at your office. If it has been beautifully designed, make sure that your website has been, too. For example, if you have a modern layout and furniture, make sure your website has the same modern aesthetic and utilizes the same colors and tones as the physical space. Conversely, if your office could use an update, don’t represent it as a state-of-the-art facility online.

Make your site as useful as possible. If you can allow patients to book appointments online, not only are you freeing up staff time from booking those manually, you are offering patients much greater convenience.

If your electronic health record system vendor offers a patient portal, take advantage of that. The patient portal may allow you to communicate securely with patients, push out care plans, send updates to them, allow patients to access pertinent parts of their health records, and request medication refills.

If you are building a new site, make sure to utilize a website platform that allows for easy mobilization, also known as responsive design. By way of example, Wordpress, Squarespace, and other platforms offer responsive templates that convert well to mobile device screen sizes as well as allow for easy viewing and interaction from any device. If you already have a website, when was the last time you viewed it on a mobile device? Ongoing changes to mobile platforms may result in less than perfect scaling, so check frequently to ensure your site looks great across all device sizes.

How are your physicians, care team, and staff presented online? Go beyond the standard curriculum vitae. Describe your clinicians’ interests and a sense of the type of care that each provides. For example, if you have a physician with a special focus in a particular area, state that. When applicable, link to or include patient testimonials to clinicians.

Short video vignettes by physicians literally speak louder than words and give a sense of the personalities behind the written profiles. Not only will you provide a more content rich experience for potential patients to make choices about whom to see, you will ensure a better fit between patient and physician personalities, too.

Don’t hesitate to share the history of the practice. Patients will appreciate knowing about your practice. List key staff members to give prospective patients a sense of familiarity before they even walk through the door.

Visitors to your site are the same folks who are interested in reading product reviews before they buy on Amazon. Give them a similar experience online and have your existing patients “sell” your services for you. You can solicit testimonials directly. You can also pull these reviews through from your social media sites, Google, Yelp, Healthgrades, Leapfrog, and more.

Don’t be afraid to ask for reviews. If you routinely ask patients upon checkout if they had a good experience, you’ll accomplish two things. First, you will be able to address any discord at the time it occurs and are therefore more likely to prevent a patient taking to the Internet to vent publicly about it. Second, it provides you the opportunity to ask a satisfied patient to post a positive review. When you have hundreds of reviews, a couple of negative ones here and there-and there will always be negative reviews-won’t affect your overall score.

Be aware that these reviews also help, or hurt, your profile with Payers. For example, United Healthcare displays Healthgrades’ reviews in its physician directories as part of a participating physician’s profile. The more positive reviews you accumulate, the better your Payer profiles will be, too.

A high-performing website can help further your brand, serve as a useful resource and showcase pleased patients.

Make your website work for you

As every medical practice knows, it can be hard to stay on top of ongoing expenses. Most of the time, physicians are too busy taking care of patients to be able to spend time reviewing medical supply pricing and other practice costs. Typically, the first time a practice signs an agreement for products or services with a vendor is usually the last time those prices are assessed. But implementing a regular review of your expenses - at least annually - is critically to ensuring that you aren’t spending thousands more than you need to on practice operations.


First, determine is you are you part of a buying group (group purchasing organization or GPO). If you are not, you are likely paying much more than you need to on items such as medical and office supplies, medications, vaccines, and other services. There are many GPOs to choose from so start with your medical association or local chapter to determine which one(s) they recommend for your specialty. Some of the larger, national organizations are 


Have you considered using a professional employment organization (PEO)? These organizations become the employer of record; so while you maintain the management of your employees, the PEO bundles up payroll, HR services and compliance, workers compensation, employer liability insurance, health care benefits, and so on under its entity. You pay either a flat rate per employee per month (

) and the PEO does the rest. While it might seem more expensive than what you pay for payroll cost alone, one of the biggest benefits (and cost savings) is access to health care benefits that are priced for a much large entity than your practice could obtain alone. Additionally, there are often many ‘perks’ included such as gym memberships and life insurance, optional short term and long disability plans that employees can purchase and so on.

You should also determine if you are routinely paying overtime, and shop around for new payroll companies to make sure that you are not overpaying for those services. Finding more efficient payroll systems can reduce time and create efficiencies too, so look for price plus efficiency when evaluating options.


How much are you paying for your bank charges? For credit card processing? For phone and internet? Shop around for the best deals.

Simply asking your bank for a better deal can produce nice savings. A recent client – single location, four-physician group - saved $4500 a year in fees by switching to a new bank, but also gained process efficiencies with free remote deposit (no staff time wasted going to the bank every day) and online access to all their accounts through a single sign on.

Shop around for better credit card rates too. The least expensive and most customer friendly credit card processor that we’ve found is 

(and we’ve reviewed scored of companies to determine that, through one of my companies, 

).  You can also approach your current vendor and ask them to reduce their fees - there is not much they can do on the credit card company rates (Amex, Visa, MC) but they can reduce monthly fees and per transaction costs.

Call your phone company and ask them what special offers they have. If they are not willing to extend those deals to existing customers, tell them that you will be happy to switch to a new company for a better deal. Every time we’ve used that approach, we’ve received a better offer from the carrier.


Review your multi-year contracts, such as those you have with EHR companies. While there may not be much that you can do to reduce the rates you pay during that term, know when your contracts are up for renewal and ask for better pricing for any renewals. Much like the phone carriers, they would prefer to work in a discount to keep you than lose you to a competitor. Even if you think you’d never switch EHR vendors, they don’t know that, right?


Once you get the hang of reviewing pricing, terms and negotiations, look at every expense item on your profit and loss sheet and apply the same methods to each of them.  If you set up a system whereby you know what contracts and pricing you have with each vendor, and routinely review those rates annually and / or upon renewal, you will save yourself thousands of dollars in expenses every year.

Look at the easy stuff to reduce the cost of overhead at your practice and go from there. There's a lot of money to be saved.