Putting It All On The Table

January 15, 2000
Bonnie Darves

Group benefits from frank appraoch to business matters


Even before TriValley Primary Care officially opened its doors for business in June 1995, the founding physicians had made an important decision: Every detail, from individual physician patient and procedure volume to salaries and collection rates, would be on the table - readily available and literally accessible to each of the group's 23 physicians.

"Our reporting is very open, so that everybody in the whole group knows what everybody else is doing," says Peter Mertzanis, TriValley's practice administrator. "Our minutes are very explicit, and even the new hires get the same minutes that the founders get."

Honesty may be the best policy in any life endeavor, and it has had a palpable - if not quantifiable or direct - impact on the bottom line at TriValley, Mertzanis says. "As a practice administrator, I feel strongly that there needs to be openness, to keep communication going so that there isn't a hidden agenda or the feeling that somebody is the kingpin. And that's turned out to be an important part of the cohesiveness of the group - that they can trust their leadership."

How that policy, or philosophy, affects the group's financial position isn't known exactly, but because TriValley's doctors have enviable production levels, one can assume that little energy is expended in squabbling or other unproductive activities.

And the group's leadership structure is designed to further foster that productivity, as well as efficiency. The TriValley executive committee includes one physician site representative from each of the offices, the president, and the board chair. The committee is "empowered to act on a wide range of issues on a pure-vote basis," Mertzanis says. "They don't have to go to the board or the shareholders, a key attribute that has helped us make decisions quickly."

A number of other, more tangible factors contribute to TriValley's success. Mertzanis points to the following:

  • A complex but fair and workable physician compensation model. After distributing 4.5 percent of earnings based on "citizenship" factors - community service and committee work, for example - the remainder is distributed largely based on productivity, as measured by charges, collections, encounters, and a number of other factors. "It's primarily site-based and it's multifactorial. There are multiple levels [to the formula], but it's manageable," Mertzanis says. "Physicians [at each site] form their salary pool, so if there are differences in practice, or in spending patterns, we think that can be controlled in the office. It saves us a lot of bean counting." And unlike many groups, TriValley adjusts physicians' salaries on a quarterly basis. 

  • A well trained staff that handle all but patient-statement mailing "inside." In particular, Mertzanis notes that TriValley's central billing staff is "very efficient, because we have people who know the [health] plans in-depth."

  • A focus on mentoring. Because the "books" are open, TriValley physicians' competitive natures surface - with positive effects. "By knowing what everybody else is doing," Mertzanis says, physicians who are less productive or efficient than their colleagues "begin to ask questions. They ask, 'what can we learn from them?' It's our own best practices approach, though it has been very informal." That may soon change, as the group plans to move toward a more formal mode of identifying best practices, Mertzanis adds.

  • Strategic volume buying and an insistence on modest facilities. "We have a single contract for most of our clinical supplies, which we negotiate periodically," Mertzanis says. Because of the group's size and by shopping around, TriValley has been able to obtain "very attractive pricing" on both clinical supplies and drugs - primarily vaccines - purchased from the pharmaceutical companies. In addition, TriValley's facilities are neither bare bones nor fancy, but are adequate and comfortable. "They aren't oversized or over-elaborate. They're appropriately sized to suit our needs," Mertzanis says.

Bonnie Darves can be reached via

editor@physicianspractice.com

This article originally appeared in the January/February 2000 issue of Physicians Practice.