Practice Management Light – A new framework for hospital-based physicians
As the administrative burden of healthcare becomes increasingly complicated the tried-true-strategy of operating with a dedicated practice administrator and patchwork of vendors has been pushed to the limit.Physicians have been roped into the day-to-day work of finance, HR, contracting, and various other administrative functions – and away from what they do best – delivering patient care. In response to the exhaustive pull of these burdens, many independent groups have made the tough choice to consolidate with other groups or become employees with the promise that these administrative problems will be solved - unshackling them from acting as defacto practice administrators. This trend, though understandably appealing at first has not solved the underlying problem.
MSM has developed a new service model that attempts to “rethink” the way independent groups are managed – one that I believe has a durable framework and possesses the potential to reinvigorate independent groups to ensure their long term sustainability. We leveraged our 35 year history of partnering with medical groups and our deep expertise in management services, to create a solution coined “Practice Management Light”.PM Light includes all the essential functions required to operate a headache free, high performing hospital-based practice.
In considering our approach to this new model, we asked the best and the brightest for guidance- we surveyed our physician clients, our partners. By working hand and hand with physicians we identified three key areas of focus that make up the core of our strategy.
Group Independence and Autonomy
Size and scale bring advantages, but also their own set of problems. I continue to believe that smaller physician led groups are more innovative, agile, and ultimately more satisfying to their physician constituents. Although, maintaining group independence requires having the talent and infrastructure to address mounting administrative complexities. The challenge is enabling those capabilities without adding significant cost and further contributing to declining physician compensation.
In our new model, physicians still lead but trade the cost of a full-time administrator and outside vendors in favor of a dedicated team of experts in HR, Finance, Contracting, and Practice Administration from MSM’s physician services team. This cost neutral strategy provides access to talent across a broad spectrum of management areas. The strategy also reduces supplemental vendor costs, ultimately translating to overall savings.
The “levers” for limiting expenses in hospital-based practices are inadequate considering that most of the revenue is paid out in physician salaries. The biggest opportunity by far is on the revenue side and that means having a productive billing process in place. The increasing complications of billing have overwhelmed many of the traditional billing companies and their productive “results” are highly variable. It’s important that billing services are not just priced right, but also yielding the maximum revenue stream. In our experience, many physician groups are underperforming on the revenue cycle side leaving between 5% to 20% unrealized. Capturing that reimbursement can often times make the difference between surviving and succeeding.
Burnout is complex, but much of it stems from the healthcare landscape changing so rapidly. There is a widening gap between what physicians are trained for and what they are expected to accomplish – and what the realities of running a medical practice entail. When designing our solution, we identified the importance of a single point of contact that can quarterback MSM’s total effort.A single contact can quarterback issues, vastly reducing the necessity for physician involvement and enabling physicians to lead instead of constantly being distracted by details that don’t require physician time.
Our collective research shows that finding the right partner and adapting your operating strategy is ultimately the most important factor to achieving future success in hospital-based physician practices. For physician led practices that want to retain their autonomy, partnering with a management services organization can provide a stable and reliable platform to sustain a profitable and enriching future.
Matt Haberman, CEO