Boosting Efficiency and Profitability in a Specialty Physician Group

Background

A specialty physician practice operates five office locations and four hospital locations with a team of board-certified physicians and advanced practice providers. Despite a strong reputation and a dedicated team, operational inefficiencies within the practice were impacting their financial performance and overall efficiency.

The Challenge

The physician group’s primary challenge lay in its operational inefficiencies, which were negatively affecting its earnings before interest, taxes, depreciation, and amortization (EBITDA). The practice’s leadership recognized that without addressing these issues, the long-term viability and success of the group were at risk. Recognizing the need for expert assistance, the group sought the help of KSM to revitalize its operations and enhance its financial outcomes.

The Solution

KSM’s healthcare consulting team was engaged to assess the situation and assist with implementing solutions. The work involved a detailed financial and operational analysis (desktop review) of the group’s existing processes, workflows, and financial performance. The consulting team identified key areas where inefficiencies were most pronounced, such as patient access and volumes, revenue cycle, managed care, and the management team structure. They then developed and implemented solutions to address these issues.

1. Patient Access and Volumes: The team evaluated patient access levels and found that the practice was not seeing enough patients. They set a minimum number of patients to be seen per provider per day and established templates and processes to support this goal.
2. Revenue Cycle: A coding review identified issues that were addressed through targeted education, improving productivity and physician performance.
3. Electronic Medical Records (EMR)/Practice Management (PM) System: Weekly meetings were established with the EMR/PM vendor to identify and track resolution of issues. Additionally, the vendor provided resources to perform an optimization review of the EMR/PM system. Recommendations from the optimization review were prioritized and implemented, leading to improvements in scheduling and the revenue cycle process. This ultimately resulted in improved access and cash collections.
4. Managed Care: A managed care assessment revealed that payer contracts had not been renegotiated in at least five years. Renegotiating the contracts would help boost the practice’s Medicare reimbursement rates.
5. Management Team Structure: The KSM team identified two new positions that would help facilitate practice operations: a medical director and practice executive director. To enhance team cohesion and standardization, they also implemented daily huddles to resolve problems and address staffing issues, established weekly leadership meetings, and revised the organizational chart to include managers at each location.

The KSM team also provided hands-on support during the implementation phase, working closely with the physician group’s staff to ensure that changes were effectively integrated and that any issues were promptly addressed.

The Result

The solutions KSM’s healthcare consulting team helped implement led to significant financial improvements. Improved access and revenue cycle optimization solutions resulted in record cash months and increased cash collections year over year. The assessment identified opportunities to increase commercial payer reimbursement, prompting the practice to renegotiate rates with payers.

Operational improvements were equally impressive. Streamlined patient scheduling and improved administrative workflows increased patient access by 20% compared to the same month from the prior year. Implementing a new leadership structure and processes resulted in better team cohesion and facilitated quicker, more effective decision-making.

Overall, these strategic changes revitalized the practice, leading to sustainable improvements in both financial outcomes and operational performance.

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