Becker's Hospital Review

78 CMO / CARE DELIVERY A physician strategy that changed 5 times in 8 years left one health system losing $100M+ annually: 7 ideas to prevent this at your organization By Molly Gamble W hen rationale for hiring physi- cians is a moving target, health systems find themselves em- ploying seas of physicians with hundreds of millions of dollars in annual losses. e way around this dilemma? Leaders with Navi- gant Consulting propose a few ideas in Har- vard Business Review. Here are seven key takeaways from the HBR article, which can be read in full here. It is authored by Jeff Goldsmith, PhD, national adviser to Navigant and associate professor of public health sciences at Charlottesville-based University of Virginia; Alex Hunter, manag- ing director with Navigant; and Amy Strauss, managing consultant with Navigant. 1. e system that changed its physician strat- egy five times in eight years bounced from ra- tionales to (1) grab market share, (2) respond to competitive acquisitions, (3) bail out loyal independent physicians, (4) increase bargain- ing power with payers and, finally, (5) posi- tion itself for value-based care. In the end, its group included more than 700 physicians and losses exceeding $100 million per year. 2. e authors suggest many of the losses health systems face from physician employ- ment stem from the lack of a firm strategy with expected returns and hosting rather than effectively managing practices. 3. Rather than building a strategy upon moving targets, systems must establish clear strategic goals and quantify and budget the expected return on the operational loss of employing a group. Done this way, the physi- cian group may end up either a lot smaller or with a more defensible specialty and/or geo- graphic distribution. 4. Too many systems bulk up their medical groups without standardizing staffing and operational support functions, such as cen- tralized office locations, effective scheduling systems or revenue cycle provisions, to rule out inconsistent coding. "Seeing that encoun- ters are adequately documented and translated into a fair and timely bill that patients are will- ing to pay is not rocket science," the authors wrote. "e return on investment for getting the revenue cycle right is oen 3X to 5X." 5. e Trump administration may scrutinize Medicare's policy for paying employed phy- sicians, meaning health systems ought to be ready to revisit employment contracts with vigor when they come up for renewal. Sys- tems must also ensure incentives align with health system goals. Volume-based incentives for physicians employed by a health system operating under performance-based con- tracts — that equation spells trouble. 6. Review and prune value-based contracts or renegotiate them for more adequate rates from payers. "Treating physician group loss- es and CIN expenses as loss leaders for val- ue-based contracts and then losing yet more money on those contracts, as is happening in many places, doesn't make sense," the authors wrote. ey note that concessions health systems made in entering narrow net- work or performance-based contracts with private payers oen exceeded the potential incentives. e authors urge health systems to adopt a physician strategy around reali- ty-based payments. 7. Don't forget independent physicians. e authors encourage health systems to ask what would motivate nonemployed physicians to work with the organization over the long term. Physician strategies cannot be built solely around the employed clinical work- force — doing so neglects the two-thirds of physicians who are contracted, independent participants in clinically integrated networks or in part-time administrative roles. n Infection prevention programs may need up to 66% more staffing than current levels By Anuja Vaidya A study, published in American Journal of Infection Control, examines a nonprofit health system's approach at quantifying the actual number of infection preventionists and support staff needed for a successful infection prevention program. Researchers used a survey to make a list of all physical locations within the orga- nization requiring infection prevention coverage. They tallied required infection prevention activities for each physical location by task. The researchers also determined type of activity, frequency per year, hours per activity and total number of locations in which each activity should occur. They used this data to calculate the number of hours per week of infection preven- tion labor resources needed. The study shows the actual labor need was 31 percent to 66 percent above current benchmarks of 0.5 to 1.0 infection preventionist per 100 occupied beds. When aggregated across the organization, researchers found the new benchmark should be one infection prevention full-time equivalent employee per 69 beds if ambulatory, long-term care or home care are included. n "The return on investment for getting revenue cycle right is often 3X to 5X." — Navigant Consultants Dr. Jeff Goldsmith, Alex Hunter & Amy Strauss

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