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The exponential growth in physician and advanced practice provider employment coupled with the growth in reimbursement tied to cost, quality and access have heightened the importance of medical group strategy. However, many organizations are continuing to experience underperformance across several domains (cost, growth, access, etc.), and attempts to improve performance have stalled or been met with significant resistance. In most cases the definition of performance is too narrow to identify the actionable strategies necessary for improvement.
Measurement of medical group performance and provider efficiency has historically been based on investment or operating loss per physician. In VMG Health’s experience questions pertaining to medical group optimization are complicated and require consideration of several indicators. Commonly used measures like investment per physician and provider FTE are helpful but can be misconstrued without proper context due to a myriad of factors including but not limited to medical group composition, medical group structure, care model, payor contracting strategy, overhead allocation and payer mix.
To truly understand medical group performance, performance should be evaluated across a series of clinical, financial, operating and community domains to assure the value of the group is fully realized (and understood). Focusing on only one or two aspects of medical group activity can result in an overly narrow and often times inaccurate assessment of medical group value. It is critically important to consider how the medical group functions, performs and contributes to the health system in several areas including: 1) growth trajectory and overall affordability, 2) engagement of the provider group, 3) data availability and reporting, 4) provider care model and compensation, and 5) provider governance. Strong performance across one or two domains is not indicative of sustainability, and category weighting is required to acknowledge the relative importance of each.
VMG Health’s Strategic Advisory team has decades of experience working with health system executives to develop and implement thoughtful strategic plans for medical groups inclusive of tactical steps. The following performance domains are considered as part of this process:
Affordability – The affordability domain evaluates the extent to which the magnitude of the hospital or health system’s investment in the medical group is appropriate given the size, operating performance, structure, and breadth of the medical group. The domain also considers whether the investment is financially sustainable for the organization when tested against the parent organization’s size, operating performance and market conditions.
Engagement – The degree to which medical group infrastructure and polices support physician to physician and physician to group accountability. The engagement domain evaluates whether polices support the individual or the collective, to what extent the governance structures create peer accountability, and a set of medical group values that align with health system goals and objectives.
Data Reporting – The ability of the health system and the medical group to track, report (internally and externally) and act on data is essential. Supportive data systems, with actionable dashboards and reports for providers, are increasingly being deployed to maximize utility of the group practice. Medical groups lacking effective data tracking, reporting and management capabilities are extremely limited.
Care Model – Patient care is increasingly being provided in non-traditional settings and by care teams versus individual providers. What policies, procedures and models have been developed and implemented that support care innovation, efficiency and patient access? How well developed are virtual protocols and how mature is the medical group’s thinking about advanced practice provider utilization and deployment? Does this translate into aligned remunerations systems for providers?
Governance – The governance domain assesses how decisions pertaining to medical group management and operations are made as well as who is making the decision. There is not a one size fits all approach to organizational structure and decision making. What structures and policies support provider led management and decision making? To what degree have service line management and medical group operations been integrated to assure efficient and effective operations.
Allow VMG Health to guide your medical group strategy through its proprietary and robust process.
How to Assess Medical Group Performance
By: Cordell Mack and Scott Ackman The following article was published by the American Association of Provider Compensation Professionals Organizations...Learn More