Physician Network Life Cycle Managing the Financial Challenges of an Evolving Physician Network

Transcription

1 Sponsored By: Physician Network Life Cycle Managing the Financial Challenges of an Evolving Physician Network Wednesday - October 19, 2016 Noon 1:30 Pacific / 1:00 2:30 Mountain / 2:00 3:30 Central / 3:00-4:30 PM Eastern Neal Barker Partner Travis Ansel Director 1

2 HSG Team Members - Presenters Neal Barker PARTNER (502) nbarker@hsgadvisors.com Neal D. Barker, Partner, joined HSG in 2001 and became a partner in He came to the firm with several years of managed care and physician practice experience. Today he provides clients with expertise and leadership in: physician practice mergers and consolidations; physician practice operational improvement; physician network development; physician employment and practice acquisition; physician compensation (including independent and employed, medical directorships, and call pay); physician-hospital alignment strategies (including professional service and co-management arrangements) and strategic planning for both hospitals and physician groups. Neal holds a Bachelor s Degree in Biology and a Master s Degree in Business Administration with a concentration in Healthcare Administration from the University of Louisville, Louisville, Kentucky. He also serves as HSG s representative with the Indiana Hospital Association. Travis Ansel DIRECTOR (502) tansel@hsgadvisors.com Travis Ansel, Director, focuses on helping healthcare organizations with Organizational-Level Strategic Planning, Physician Alignment Strategy, Employed Physician Network Strategy, and Accountable Care Strategy. In his 10+ years in management consulting, Travis has worked with clients ranging in size from multi-hospital tertiary systems to critical access hospitals. His focus is on creating action-oriented plans to address the core strategic issues his clients face. In addition to consulting, Travis is a frequent contributor to a number of national healthcare publications and speaks at national and state-level healthcare conferences. Travis holds a Master s of Business Administration from Vanderbilt University, Nashville, Tennessee and dual Bachelor s of Science Degrees in Finance and Business Management from the University of Tennessee at Knoxville. Travis is a member of the American College of Healthcare Executives. 2

3 About HSG Who We Are HSG builds high performing physician networks so health systems can address complex changes with confidence. From boosting market power and financial strength to preparing for valuebased care, we can help you define your strategy, implement that strategy, and manage your physician network short or long-term. We guarantee results and deliver the greatest value as a trusted member of your team. Our Areas of Expertise Physician Strategy Physician Network Optimization Accountable Care Physician Alignment Strategy Strategic Plans with Physician Focus Employed Group Strategy Creating Shared Vision Service Line Strategy Service Line Co-Management Physician Manpower Plans Affiliation Strategy Network Management Outsourcing Management Advisory Interim Management Executive Recruiting Network Performance Improvement Provider Productivity Systems Network Revenue Cycle Physician Compensation Plan Practice Acquisitions Fair Market Value Opinions Referral Capture ACO Development ACO Optimization Clinical Integration Strategy Hospital Efficiency Improvement Program Development (HEIP) Practice Transformation Direct Contracting MSSP Applications 3

4 Today s Objectives: Review how employed physician networks evolve over time Evaluate your organization's place on the Physician Network Life Cycle Describe the management and financial challenges associated with each phase of network growth Why does it matter? 4

5 Common Management Challenges for Employed Physician Networks Finding the right talent to manage each practice location and the network at large Staffing appropriately and keeping quality personnel Successfully managing and maximizing the professional service revenue cycle process Consolidating practices and standardizing, often centralizing, practice operations Managing information technology platform(s) to obtain meaningful information needed to manage operations and clinical processes Effectively incorporating advanced practitioners Redesigning a physician compensation methodology that is financially sustainable, competitive, and aligns physician goals with those of the organization Managing the transition from a collection of practices to a group with a common culture and vision that is helping the organization create value 5

6 Successfully Managing Revenue Cycle FY 15 FY 16 YTD MGMA Median (2015 Report) Revenue Cycle - KPIs Colls. Gross Adjusted Days in Colls. Gross Adjusted Days in Colls. Gross Net Days in per wrvu CR CR AR per wrvu CR CR AR per wrvu CR CR AR Primary Care Practices $ % 93% 54 $ % 95% 45 $ % 97% 36.0 Indigent Clinics $ % 110% 34 $ % 100% 38 $ % 97% 36.0 Surgery Practices $ % 91% 64 $ % 93% 59 $ % 93% 51.4 Focus on denials Redesign staffing structure and denial workflow Increase staffing to work denials Incentivize front desk based on clean claims and denial reduction Increased point of service collections Incentivize front desk based on POS collections target Clearer and more open lines of communication between front desk and billing staff Deposits for elective procedures prior to surgery 6

7 Staffing Appropriately Clinical staff was obtaining pre-certs, handling referrals, calling for scripts, scheduling surgeries and return appointments feeling overwhelmed Pushed those functions to administrative staff Reduced staffing levels Decreased staffing cost Increased throughput and efficiency Clinical staffing is focused on patient flow not feeling overwhelmed 7

8 Realignment of Compensation Provider compensation was misaligned (losses high, low producers are not motivated, and high producers are unhappy) After 18 months, the redesigned model is rightsizing compensation, motivating, and rewarding effort. Also incorporated rewards for marketing activities, quality, patient satisfaction, efficiency, and teamwork. 8

9 Effectively Incorporating APCs wrvu per Patient Contact Hour Compared to Benchmarks Physician Average Advanced Practitioner Average All Provider Average 60 th %tile 75 th %tile 9

10 The Physician Network Life Cycle Growth Mode Operational Chaos Strategic Focus Value Phase Physician Networks must evolve over time as they grow Infrastructure Operations Strategy Management capabilities and focus must evolve over time as well Engagement of providers must be consistent with the needs of the network Novice Mature Must address phases sequentially; can t jump from growth to value without doing the work Networks across the country span the life cycle, but the vast majority are in one of these three stages. 10

11 Placing Your Network On the Life Cycle Key Placement Criteria Relative maturity of the size of your network Size and capabilities of your management team Financial performance Involvement of physicians in governance Leadership from employed network in tackling value-based care challenges Ability to generate and document highlevel performance on cost and quality Click here to download a PDF of the above graphic or info@hsgadvisors.com to request a copy. 11

12 Network Life Cycle: NOVICE STAGE Description Novice organizations are dabbling in employment, mainly as a reactive measure, with no growth strategy. The network lacks a formal management infrastructure and can best be described as a group of independent physicians who share the same tax ID number. Growth Mode Operational Chaos Strategic Focus Value Phase Key Management Challenges Novice Mature Completing physician transactions given limited hospital executive bandwidth HSG Physician Network Life Cycle Defining the physicians who SHOULD be employed versus those asking to be employed Developing basic management infrastructure to facilitate hospital management of physician practices 12

13 Addressing Management Challenges in the NOVICE STAGE Typical focus with clients at this stage: The old adage you have to spend money to make money is true. In order to successfully build and operate a physician network you must make the right investments. Finding the right talent and allowing that talent to be dedicated to the network and its practices. Also, you get what you pay for. Supplementing their limited practice management infrastructure and resources. Developing standards and parameters for deal-making with physicians (i.e., physician agreement/contract matrix). Outlining a process for due diligence and practice acquisitions. Setting basic expectations for physician availability and productivity. Educating management regarding the differences between managing a hospital versus managing a physician practice/network. Cautioning management to be selective in physician employment. 13

14 Network Life Cycle: GROWTH STAGE Description Organizations in growth mode are beginning to aggregate in size, with some proactive physician employment based on perceptions of strategic need. Network remains loosely managed and is overseen by hospital execs juggling many other responsibilities in addition to the network. Growth Mode Operational Chaos Strategic Focus Value Phase Key Management Challenges Novice Mature Selectivity about whom to employ Performing meaningful due diligence HSG Physician Network Life Cycle Thinking proactively about deal making and compensation to avoid future headaches Building a forum for physician leadership and engaging physicians about group growth 14

15 Addressing Management Challenges in the GROWTH STAGE Typical focus with clients at this stage: Focusing on proactive growth (who, where, and when) versus the current reactive growth mode. Beginning to use referral data to selectively target markets and physicians/practice for growth. Completing comprehensive operating assessments of local practices targeted for acquisition learning to say no and not growing for growth s sake. IT infrastructure and revenue cycle issues are now becoming bigger issues as the number of providers increases. Begin to work toward a decision regarding the group s information technology (PM/EMR) and revenue cycle function (in-house or outsource). Engaging physician leadership in developing the group s standards and expectations for behavior and performance what it means to be a part of the group begin to frame the group s culture. Facilitating physician leadership discussions regarding quality what is important for us to measure and what are our standards for performance. Evaluating the addition of nurse practitioners and/or physician assistants to practices in order to increase physician efficiency and increase intake capacity. 15

16 Network Life Cycle: OPERATIONAL CHAOS STAGE Description Network growth has outstripped the capabilities of those managing it. Increasing practice subsidies highlight the need for a formal, professional management infrastructure. Hospital leadership senses the need to control the group s growth and limit employment offers. Growth Mode Operational Chaos Strategic Focus Value Phase Key Management Challenges Novice Mature Acquiring the management talent the networks need to stabilize operations HSG Physician Network Life Cycle Building revenue cycle capabilities and systems into the infrastructure Developing a focus on management reporting, including a comprehensive dashboard Developing a Physician Advisory Council to lead the effort to develop a group practice approach and culture 16

17 Addressing Management Challenges in the OPERATIONAL CHAOS STAGE Typical focus with clients at this stage: HSG conducts a vast number of operating assessments at this stage. Most often, the groundwork was not laid appropriately at Novice and Growth stages, as such revenue cycle and finding reliable data to manage is now a major issue. High practice losses have the hospital focused on improving revenue cycle, streamlining practice operations, driving patient volume to lagging practices, and rightsizing and/or realigning physician compensation. Usually strategy and growth have taken a backseat to simply getting a handle on operations and minimizing losses. Staffing practices appropriately; lean is fine, but too lean can be damaging. HFMA Healthcare Cost Containment, Feb. 2016, median total medical revenue per FTE physician was 58% higher in practices with the greatest number of employees per physician Reallocating duties and streamlining practice workflow to increase throughput and maximize provider efficiency. Incentivizing the front desk/administrative staff to fill the providers schedules, reduce no shows, decrease denials, and increase point of service collections. 17

18 Network Life Cycle: STRATEGIC FOCUS STAGE Description Network operations are better aligned and the focus shifts to strategy. This is the time when the foundations for population management capabilities are laid. Weak/poor physicians who will not be successful in a value-based environment are culled from the group. Growth Mode Operational Chaos Strategic Focus Value Phase Key Management Challenges Novice Mature Investing in best practices and reducing variation HSG Physician Network Life Cycle Ensuring appropriate referrals stay within the network Involving physicians in group administration to drive clinical leadership Removing underperforming providers Tightening and building management capabilities 18

19 Addressing Management Challenges in the STRATEGIC FOCUS STAGE Typical focus with clients at this stage: Formation of physician advisory council committees to assist in providing guidance and direction to the group (i.e., operations, IT, and strategy). Completing a physician enterprise strategic plan focused on strategic primary care and service line growth. Defining a shared vision between management and physicians in order to move the group forward to the next stage. Beginning the discussion of how to move forward into value-based contracting and the role of the employed group. 19

20 Network Life Cycle: VALUE STAGE Description Network is more integrated and is learning how to produce value from operational integration. The employed network is leading the charge to improve quality, serves as the core physician network for managed care offerings, and is the locus of the system s efforts to control risk. Growth Mode Operational Chaos Strategic Focus Value Phase Key Management Challenges Novice Mature Evolving compensation to address risk and quality incentives HSG Physician Network Life Cycle Defining provider productivity from a population management perspective Building information systems beyond managing the business to managing patient populations Integrating the group and system strategy into a clinical integration strategy 20

21 Addressing Management Challenges in the VALUE STAGE Typical focus with clients at this stage: Redesigning physician compensation to incorporate quality, efficiency, patient satisfaction, and teamwork. Clinical transformation, focusing on bringing value-based capabilities to practices (PCMH, PCSP, etc.). Referral management to ensure business is staying inside the employed network and/or within a contracting entity (ACO, CIN, etc.). Evaluating opportunities in the market for getting value out of the cost and quality success your network is creating. 21

22 Network Life Cycle: MATURE STAGE Description The network is stable in its growth and operations, and has developed both the culture and capability to manage populations and take on risk. Growth Mode Operational Chaos Strategic Focus Value Phase Key Management Challenges Maintaining culture over time given physician turnover Novice Mature HSG Physician Network Life Cycle Physician leadership succession planning Integrating new IT tools into existing competencies around population management 22

23 Addressing Management Challenges in the MATURE STAGE Typical focus with clients at this stage: Evolving provider mix to focus on value-based strategy. Evaluating partnership opportunities for greater networks (Super CINs, etc.) to take on more ambitious contracting opportunities (Insurance?). Evolving toward mostly clinical management/leadership. Network design - network closed or with minor variability in providers beyond normal comings and goings. 23

24 Tying It All Together Operational Chaos Strategic Focus Manage Growth Mode Manage to where your network is Involve Value Phase Involve physicians in the transition Create Create the strategy to move your network forward Novice Talk Never too early to talk about value, but get the blocking and tackling done first Mature 24

25 Questions 25

26 To Complete the Program Evaluation The URL below will take you to HFMA on-line evaluation form. You will need to enter your member I.D. # (can be found in your confirmation when you registered) Enter this Meeting Code: 16AT52 URL: Your comments are very important and enables us to bring you the highest quality programs! 26