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Physician compensation wasn't stellar last year, but don't give up. There are plenty of ways to jump-start your practice operations to maximize what you've got.
Family physician John Hale has been in practice for over 23 years. His group practice, Doctor's Clinic of Union City, located in rural northwest Tennessee, was known for being one of the best-run practices in the region. It did so well over the years that there were several offers to buy the practice and integrate it into a multi-specialty group or hospital corporation. The group always said "no, we're not selling," until two and a half years ago, when it sold out to Baptist Memorial Health Care Corporation, based in Memphis, Tenn.
What changed? The practice couldn't recruit new physicians anymore. It just couldn't compete with hospitals who often signed residents while they were still in medical school, luring them away with promises of stipends to pay for school loans. The practice was also struggling to pay for health insurance coverage for its staff, and needed an EHR system to replace an aging practice management system that it used for billing.
Many practices are struggling with the same issues as Hale's group. A significant factor in the struggle to stay solvent is the stagnant compensation environment. For those physicians who want to stay in practice, they will have to work smarter and leaner; seek out opportunities for collaboration and synergy with other groups; maximize technology use; and incorporate new compensation models like value-based reimbursement.
Who's doing well?
How has physician compensation changed over the last year? It appears that compensation is still flat - 42 percent of the 1,338 physicians who responded to Physicians Practice's 2014 Physician Compensation Survey say their personal income has not changed over last year. And 32 percent say they are slightly disappointed with their compensation.
Perhaps serving as a bellwether, Tommy Bohannon, divisional vice president for recruiting at physician staffing firm Merritt Hawkins, says that his company found compensation for internal medicine declined slightly over the last year. "This is the first time that I can remember that a primary-care specialty decreased a little bit. I really feel [the reason is] this push to change delivery models to provide care everywhere, and pushing this out into lower cost settings," like retail medicine or urgent care, he says.
Practice viability over the coming one year to three years is split, according to our survey; 35 percent of docs tell us their practice conditions are "mixed," but not growing significantly, while 32 percent say conditions are "robust." Fifty percent say they plan to continue practicing as they are, while 12 percent say they will retire, and 13 percent say they will seek employment by a larger health system.
* To review complete survey data, check out the Physicians Practice's 2014 Physician Compensation Survey.
Don't be afraid to negotiate
The trend toward employment by a large health system or group practice is still continuing. In our survey, the scale is tipping toward employed docs over those in independent practice; 40 percent say they are an owner/partner of a practice, while 60 percent say they are either employed by an independent practice or health system.
According to Merritt Hawkins' "2014 Review of Physician and Advanced Practitioner Recruiting Incentives," 90 percent of new jobs for physicians are employment-based at hospitals, medical groups, or community health centers.
Bohannon says, "We have seen the trending of our [recruitment] environment … mirror that of the broader market. … Just four short years [ago] … you still had 18 percent [of physicians] who were in a private practice environment, and that is down to less than 5 percent this year."
However, becoming an employed physician does not mean you have to sacrifice all control. As Hale, who is also president-elect of the Tennessee Medical Society, points out, his group took over a year to negotiate an agreement with Baptist. "We went into this certainly very leery of being bought out. We enjoyed our independence, but we realized that [the hospital] wanted us to be happy. They knew we'd be more productive … [and] we would be better parts of the corporate cog if we were happy," he says.
Our experts tell us it is possible to negotiate a contract that works specifically for you and your group. Partnering with a hospital can take many different paths. Marc Mertz, vice president of physician consulting firm The Camden Group, says "Hospitals know that they have to align with physicians in new and different ways. … And in some cases that means employment. Sometimes that means other partnerships, whether that means co-management, joint ventures, or clinically integrated networks."
Use what you've got
So what if you just can't stomach being an employed physician? Are there ways to bolster your practice's performance and revenue without breaking the bank? According to our experts, there is no magic formula, but you can maximize your efforts and work smarter.
"Life isn't getting any easier in private practice," says Mertz. "Costs keep going up, no one is paying you any more to do what you are doing. If the government isn't paying you more and the payers aren't paying you more, you've got to do more with less."
Here are seven easily implemented strategies you can use to boost your practice efficiency and revenue:
1. Make sure staff are working to the fullest level of their license.
It's clear to anyone who works in the medical industry, the practice of medicine has increasingly become paper bound. With pre-authorizations, medication approvals, and referrals to name a few, physicians can get caught devoting too much time to administrative tasks. Experts warn that's a big mistake. The only people who can treat patients are physicians and ancillary providers. They are the ones who drive revenue. For that reason, Mertz recommends offloading administrative tasks to medical assistants and RNs whenever possible.
"It's looking at the role of your staff, and making sure that everyone is working to the top of their license. [Push] down functions that can efficiently and safely and effectively be pushed down to [staff] to make it more efficient, most cost effective." Mertz adds, "Physicians [should] only do work that requires a medical degree …"
2. Make use of ancillary providers like NPs and PAs.
Depending on the specialty and practice environment, Mertz says that ancillary providers can increase practice revenue by offloading less difficult patients from physician schedules, and in some states, even caring for their own patient panel.
"Some physicians will tell you it works fantastic, and it really does allow them to be more efficient and take care of more patients … Other physicians have resisted the use of [nonphysician] providers or advanced practice clinicians. A lot of it comes down to how you want to use them," says Mertz.
3. Make sure patients have easy access to your practice.
It sounds elementary, but do you know if your patients can get in to see you in a reasonable amount of time? Do you know how easy or hard is it to get an appointment at your practice? And don't forget, once patients are in your practice you must make sure that your processes are working as smoothly as possible. Nothing turns off patients quicker than waiting 20 minutes in the exam room, shivering under a paper gown.
Mertz says that physicians should be "making sure that enough patients can get in … taking a close look at the business of [their] practice, the number and type of staff that [they] have, how efficiently and effectively they work … It's really focusing diligently on all those different aspects of what it costs to run the practice."
4. Jettison tasks that are not bringing in adequate revenue.
Caring for patients when they are hospitalized can be a commitment that physicians take seriously; but hospitalists can generally provide more efficient care, and at less cost to a practice. Hale says his group felt very passionate about caring for hospitalized patients, but it just wasn't financially viable anymore.
"We were the last group to get rid of our hospital practice, but we thought it was a duty we had to our patients. … But from a financial standpoint it just did not make sense to do it anymore," he says.
5. Stay informed about practice metrics.
Make sure that physicians are always informed about the business side of their practice. Hale says that prior to negotiating their sale to Baptist, the physicians in his group received monthly productivity reports from an outside accounting firm, so they could compare their own performance month over month, and also see how other physicians were doing. Having that amount of granularity allowed them to see what was working best, and adopt strategies that worked for other physicians.
When Hale was in medical school, an older physician told him, "… You've got to keep an eye on your practice - know what you do well, and know what pays you well - and practice good medicine. You cannot be blind and leave everything up to a business manager. You have got to have your hand on everything. If you don't, you are in trouble."
Now, as part of Baptist, the physicians in Hale's group receive reports on patient satisfaction surveys. There is a fair amount of competition among members of the group to score well, Hale says. "Physicians are historically competitive, driven, and they are pleasers. They want to do better. If they [score in the] 98th percentile [in patient satisfaction], they want to know why they are not in the 100th percentile. If they are in the 50th percentile, they are mortified," he says.
6.Make the most of technology systems.
Nick Stepro is the director of analytics for consulting firm Arcadia Healthcare Solutions. He says his company feels very strongly that EHRs are an "underrepresented, incredibly valuable [tool] that some folks don't seem interested enough in leveraging." He's speaking about the data reporting capabilities in EHRs that practices can use to not only improve patient care, but to recall patients who have not been seen in a while. "It's good business from an outreach perspective," says Stepro, "These are new patients that you are bringing in that are unengaged, and even in the fee-for-service world, that's revenue."
Stepro adds, "The easiest way to improve is to have real-time visibility into your current performance, and try to understand where you need to act to drive improvement."
Even using a basic patient care registry to identify, for example, diabetic patients who haven't been seen in the last 90 days, or who have not had a foot exam or eye exam, can reveal patient outreach and revenue boosting opportunities.
Stepro says that more sophisticated software packages offer features like data mining, patient portals, and utilization management analyzers that can help practices with reporting requirements to take advantage of incentive measures offered by pay-for-performance programs.
Even if your practice doesn't have a large technology budget, according to Mertz, "There are software applications and EHRs … that really do cater to the small practice that can be a viable partner to put the tools in place that you need."
7. Don't discount value-based compensation.
Most experts agree that value-based reimbursement, which structures payment around better clinical outcomes, is the future of physician compensation; yet it has been slow to get off the ground. A majority of physicians in our survey (65 percent) say they are not compensated on value-based criteria.
And, despite the continued interest in making medicine more patient-centric, a resounding 70 percent of docs in our survey say that none of their compensation is based on patient satisfaction metrics; just 11 percent say more than 25 percent of their compensation is based on such metrics. But our experts tell us that value-based compensation is definitely coming to both hospital-owned and independent practices alike.
"I've seen a lot of groups that are purely fee-for-service today, but they are hoping to pay their physicians 90 percent on productivity, and 10 percent on these other [quality] measures, as a way to begin to develop capabilities and skills around these different areas …," says Mertz.
Mertz advises physicians not to discount quality programs and value-based reporting; they should take advantage of that data to learn where their weaknesses are and what they are doing well. He says compensation extras like value-based bonuses are essentially preparing physicians for the coming changes in compensation models, where metrics like quality scores, patient satisfaction, patient access, and total cost of care will play a large role.
* To review complete survey data, check out the Physicians Practice's 2014 Physician Compensation Survey.
Physicians who want to bolster flagging revenue will have to work smarter and leaner; maximize technology use; and implement strategies like these to maximize staff efforts and resources:
• Increase patient access to care
• Offload administrative tasks to staff members
• Stop offering care that isn't cost effective
• Utilize ancillary providers like NPs
• Use available EHR reporting functions
Erica Sprey is associate editor for Physicians Practice. She can be reached at email@example.com.
This article originally appeared in the November/December 2014 issue of Physicians Practice.