client profile

Group of four Hospital-owned medical practices

problems

Like many U.S. hospitals, this organization purchased several clinics in the 1990s to support primary care and secure the ancillary benefits associated with the practices. With declining profit margins and increasing operational challenges, ownership of these practices became a "ball and chain" to the financial picture of the hospital. "I can't upgrade equipment because of my losses in these practices," the CEO complained. "I can't hire needed staff. And when I don't get my annual bonus because of these practices, they have my attention." The annual loss per FTE physician was $110,000. Revenue per FTE physician was far below national benchmark. Tensions were high. The relationship between the practices and the hospital was described as "mutually frustrating" by those involved. Providers had not received a raise in three years, staff were unmotivated. Turnover was at approximately 15% annually; recruitment was slow and marginally successful.

solutions

The hospital chose MBA Resources for our experience with private practice physicians. We understand their nuances, their decision-making styles, their outlook, their professional focus, and their organizational tendencies. We know how to create physician buy-in which was missing in this case. We needed to utilize our practice management expertise to drive operational improvements. As highly successful billing authorities, we also knew exactly what to do to restore financial viability for these practices.

MBA Resources assumed full responsibility for all practice management and billing operations. Working hard to fine tune the hospital's integrated delivery system through a focus on operations. "Our strategy had three main components," says Lauren Parker, Vice President of MBA Resources: "billing effectiveness, operational efficiency and establishing buy-in across the board so that all physicians, employees and executive team members shared common goals."

As the out-sourced billing agent for the hospital practices, MBA Resources focused on patient balances, assigned commercial contracts and implemented an aggressive effort to chase down money in the 150+ day category. New protocols and policies were implemented at the practice level to insure speed and accuracy. All providers were enrolled in on-going coding and documentation training, and fully supported with a variety of coding tools and information sources.

Operationally, we instituted an all-out effort to collect co-payments and deductibles. A quality assurance program was implemented to increase the accuracy of data entry to acceptable levels. Accountability was enhanced by clarifying job descriptions, providing training and improving the employee evaluation process. Communication in the practices and with the hospital was improved by better meetings and a policy of complete transparency regarding the finances of the practices. Scheduling efficiencies were implemented. Information technology solutions were adopted to increase automation. Expenses were watched carefully and controlled. Staff incentive programs were instituted, and a provider performance-based pay program was introduced.

results

Average charges per month and average payments per month increased tenfold. Days in accounts receivable were reduced from 72 to 55. Percent of 90+ day accounts receivable went from 35% to 12%. In the last 24 months of MBA's involvement, the practices broke even for two of the eight quarters. Relations within the practices, and between the clinics and hospital administration, were much improved and staff turnover was held to an acceptable level. MBA helped recruit and hire a permanent practice manager to continue our efforts. "With our expertise," says Lauren Parker, "the hospital realized the full benefits that made acquisition of these practices so appealing in the first place, and avoided the headaches that have been annoying everyone ever since. This allows doctors to focus on patient care, and management to concentrate on higher level, mission-critical tasks."