Hospitals are losing $292,000 per employed physician (Kaufman Hall 2023). The loss is not sustainable given the decline in healthcare reimbursement and national shortage of physicians.
Minor tweaks in the staffing of physician practices, improvement in revenue cycle management, or marketing strategies will have no significant impact on reducing the loss.
Hospitals need to rethink the employment model of physicians for long-term viability. The process involves:
- Clearly articulating the strategic and annual goals of the employment enterprise.
- Creating a collaborative governing process for physicians and hospital leaders to work together to achieve the system’s goals.
- Creating an environment where providers feel valued and appreciated.
- Creating a team approach to care leveraging advanced practice providers and a platform where primary care providers are the marketing channel to support high margin specialists and ancillary services.
- Creating compensation systems to reward providers for their individual and group performance.
- Fostering systems to attract and retain patients.
Lumina has successfully helped hospitals create financially self-sustainable employment models. We recently reported on our work with a nationally recognized academic health system where we facilitated a $100 million increase in enterprise revenue and EBITA grew by $20 million annually.
To learn more or to request a complementary assessment of your employed physician group, email Jeff directly at jpeters@luminahp.com or visit www.luminahp.com/medical-group-strategy.