Want to remain independent? It's your move

These tips will help independent physicians remain successful. Some are fundamental components of a successful practice that are frequently ignored but that can put pressure on independent professionals to integrate for financial reasons. Retain a focus on service as a linchpin for everything you do. To gauge your success, evaluate these metrics:

• Market capture and retention rates
• Patient convenience (hours and access) and satisfaction rates
• Staff satisfaction rate

I have seen post-integrated practices ignore patient satisfaction and service-oriented aspects of healthcare delivery, which I attribute to complacency from the security of integrated delivery system (IDS) employment. Some bureaucratic systems inadvertently provide unsatisfactory service compared with entrepreneurial practices.

But in the future, this type of oversight will have negative ramifications. In other words, it will not be business as usual. Most practices that ignore signals and depend on reputation or ego might be surprised by new payer requirements. For example, I have heard that progressive payers are telling practices, in so many words: “Show us what you can do today — and be able to prove it.”

Independent professionals need to ramp up their ability to identify and respond to anticipated trends, such as:

• Increasing management demands that create a new level of professionalism. I attribute some of this to new reimbursement methods, which will have an emphasis on proving quality, service and safety instead of traditional unit productivity.
• Compliance overload that requires a cover-all-bases approach to sometimes conflicting regulations.
• Managers becoming specialists in larger organizations, while a global orientation on practice operations continues to be the norm for smaller groups with a direct correlation between management empowerment and results.

MGMA-ACMPE has resources to help you facilitate any type of transition you seek. Physician leaders should recognize the increasing and ever-changing workload requirements to ensure that staff members are rewarded and acknowledged for their efforts to create and maintain a nimble and responsive organization.

There is still a focus on productivity in terms of unit volume, despite a new reimbursement emphasis on other objectives. In other words, attention to patient load will continue to be a requirement for survival, regardless of reimbursement methodology.

Physician compensation methods used by private groups should recognize that income predictability or stability is a significant advantage offered by integrated systems and offers an attractive alternative to private practice. Any level of compensation stability in private practice relies on good financial and cash management. However, because of limited capital resources, independent practices of any size remain vulnerable to economic gyrations throughout the year.

Future compensation methodology will require incentive modification to respond to reimbursement changes. These efforts could meet with some resistance as this method is a significant departure from traditional unit productivity.

The stock redemption (buy/sell) issue is not always evident in an IDS, but it is an obligation related to physician ownership of a practice unit. Obligations in a group’s legal documents should be reviewed to ensure that expectations and anticipations for financial impact on the practice are realistic. Unrecognized obligations can be analogous to a “run on the bank” and could result in an untenable situation, such as compensation reduction to pay off a partner who is terminating a relationship. When multiple terminations occur at the same time — because of death, disability or a voluntary reason — the situation is compounded.

Clinical restructuring and modifying classic direct physician/patient contact will put a greater emphasis on nonphysician providers. Under the Patient Protection and Affordable Care Act, millions of patients will enter the private practice market, which will limit access unless there is a corresponding increase in provider capacity. The industry needs to address consumer acceptance of nonphysician provider intervention as well as the concept of team care, which has to be cost-effective with the exception of instances where service and patient care have a priority.

Financial management

Professionals will need to take an analytic approach to the question of striking a balance between jumping-the-gun action and an interpretative analysis of trend orientation, which applies to financial reporting and the relationship to data points reported by the MGMA Data Solutions Department.

The old cliché “information is power” is more important than ever. Managerial ability to analyze the situation and develop recommendations in a timely manner is indispensable in a survival-oriented environment.

Bigger might be better. In many cases, independent practices will remain the “small guys” in relation to IDSs. Size as well as other characteristics improves clout in developing situational relationships, including all-important payer contracting.

Although seemingly unfair, loosely structured organizations of independent physicians remain limited in contract negotiations, policy agreements and creating a seamless provider system.

As a result, it might make sense for entrepreneurial-minded, single-specialty group owners to consider consolidating with other practices in their markets. The same consideration also applies to a consolidation of multiple specialties.

Merging businesses is a complicated task that succeeds only if there are reasonable expectations and full commitment to an organizational philosophy driven by a realistic strategic plan.

I am frequently asked, “What is the right size?” Unfortunately, there is no cookie-cutter answer in organizational design, which depends on myriad factors related to each situation.

Management structure

You must be able to centralize authority, responsibility and reporting. Although group practice is typically a physician-owned democratic structure, the day of outlier disruptive influence is no longer tolerated in survival-oriented group practices. A strong governance structure is replacing situations where “do it my way” cowboys once reigned.

When comparing private vs. hospital employment, the entrepreneurial model can — if it is well-managed — be more nimble in this changing environment because large hospital-based practices are often subject to slower bureaucratic responses.

The effective strategic planning remains a core management/leadership function with any progressive practice. To survive, independent practices must pay attention to progressive and proactive techniques and recognize practice management concepts that I have already outlined. If they do, then independent, nimble and entrepreneurial practices have the potential to outperform larger bureaucratic systems. As the title of this article suggests, it’s your move.

To the ultimate dismay of some physician groups, an operational or financial hiccup — even one that is anticipated — can lead to spontaneous “run for cover” hospital affiliation. It isn’t unusual for the same person whose loud cries led to integration to later say, “We didn’t know what we were getting into!”

Once in, getting out could be restrictive and costly.

To be totally objective, I have seen some fine, physician-friendly and well-managed IDS organizations. In the final analysis, the key is to identify goals and understand the upside and downside of each alternative instead of making a decision by default. There is never a surefire answer, but do your homework — and document your decisions — and you will be able to move forward with confidence.