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Securing Physician Resources: A Business Case for Outsourcing

Posted on Mon, Apr 03, 2017
Securing Physician Resources: A Business Case for Outsourcing

As hospital and health system CEOs continue to see their organizations’ bottom lines being squeezed by a confluence of factors – declining reimbursement, demand for enhanced value from patients and payers, heightened focus on improving the quality of care and the overall patient experience – they are turning to a variety of tactics. One of the leading strategies is outsourcing for physician resources.

While outsourcing isn’t a new phenomenon, it’s taken on increased importance, especially as a way of decreasing costs, strengthening alignment with physicians and supporting efforts to improve patient care and operational efficiencies. Physicians also are seeking shelter from the growing financial and regulatory pressures bombarding their private practices. They are turning to employment arrangements with healthcare organizations (HCOs) via outsourcing companies or direct contracts with hospitals and health systems, many of which are beginning to offer the support of outsourced management services.

HCOs first dipped their toes into the outsourcing pool by contracting out their support services including environmental services and food services. Clinical outsourcing began more than 40 years ago when emergency medicine became a medical specialty. Today, the top five most commonly outsourced patient care services include dialysis, anesthesia, diagnostic imaging, hospitalist staffing and emergency department staffing1. In 2012, some 35 percent of all outsourcing agreements fell into this category, and the trend has remained steady over the past few years2.

How the Changing Environment Is Impacting Outsourcing

There’s no doubt the whirlwind of change that is engulfing hospitals is pushing them to look outside of their own walls for relief. Hospitals are being driven by a near-desperate need to reduce operating costs to cope with lower reimbursement rates, so they are increasingly turning to outside contractors.

Contributing to the historic changes taking place in the healthcare environment is the changing face of the physician workforce. In 2014, the Physicians Foundation conducted the Survey of America’s Physicians: Practice Patterns and Perspectives. More than 20,000 physicians responded to the survey, which found that there is a crisis in private practice with a strong migration toward the hospital employment model. The survey showed that solo practice volume dropped from 24 percent in 2012 to 17 percent in 2014. It pointed out the following challenges remaining in private practice – the administrative burden; the lack of access to capital; and the need to have communication with other physicians, physician groups and hospitals through large, expensive electronic medical records (EMR) systems.

What’s In It for Hospitals That Choose to Outsource?

How can an HCO determine whether to outsource services or keep them in-house? The Healthcare Financial Management Association offers these key questions to ask before making a final decision:
 

  • What barriers has your hospital encountered to achieving your business objectives? Why is outsourcing likely to solve a problem?
  • What are the sources, anticipated financial benefits, and true costs of outsourcing the function? Will outsourcing provide access to lower-cost computer capabilities? Will it provide lower labor and benefits costs (and if so, how will that be accomplished)?
  • What impact will outsourcing have on hospital employees? Will outsourcing provide additional benefits, better leadership, or more training? Will the outsourcing decision be viewed as a positive step or one that has to be “sold” within the organization?
  • How will outsourcing improve patient service and satisfaction?
  • With hospitals typically being one of the largest employers in a community, how will outsourcing affect the broader community?

Not only are an increasing number of healthcare organizations choosing to outsource staffing or practice management services in clinical areas, many are now realizing the incremental value of seeking one outside partner for several service lines. There are many reasons for this trend, including reduced physician recruitment and retention costs, improved operational efficiencies, strengthened alignment between HCO and physicians, accelerated development of physician leadership and improved clinical quality and outcomes.

“A hospital may be stuck, for example, on how to improve management of pneumonia patients,” says Francisco Loya, MD, chief executive officer of EmCare Hospital Medicine. “A local group of physicians only has a local perspective of the market. We have the advantage of working with hundreds of hospitals and health systems across the country, so we can identify best practices at similar size organizations and share those with our hospital partner or local practice. Because of our structure, we can immediately implement practice changes and monitor performance for achieving the desired outcomes.”

Other benefits of outsourcing include:
  • Access to resources
  • Better hospital-physician alignment
  • Leadership development opportunities
  • Improved metrics
  • Continuity of care/integrated services

EmCare and our parent company, Envision Healthcare, are changing the face of healthcare by pioneering solutions that increase the quality and experience of care while simultaneously reducing costs. By marrying our leading hospital-based physician group with the largest EMS and medical transportation organization (AMR) and launching a cutting-edge mobile integrated healthcare organization focused on post-acute care and intervention (Evolution Health), we are positioned to be on the leading edge, driving solutions for the future-state of healthcare.

Hospitals continue to seek opportunities to work with strong partners to protect their bottom line. Outsourcing physician resources offers benefits to patients, physicians and HCOs. Outsourcing has become an important thread woven into America’s delivery of healthcare and will continue to help hospitals and health systems achieve sustainable improved performance.

To learn more about outsourcing, download EmCare’s recent whitepaper on the topic.

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3 Ways Outsourcing Can Help Your Hospital's Financial Performance

Posted on Thu, Aug 13, 2015
3 Ways Outsourcing Can Help Your Hospital's Financial Performance

The business case for outsourcing ED physician services at hospitals with 20,000 annual ED visits or fewer.

By Mark McGrew, MBA
 
If you run a low-volume, rural, specialty or a critical access hospital, you may think that outsourcing emergency department management services is not a viable option. You have challenges that larger organizations will not understand. Resources are tight, and you can’t afford to spend money on extra services. Bringing in an outside company will just make the system more complicated. The list goes on and on in the minds of many hospital administrators who run these facilities.
 
The reality is that many hospitals in this situation have discovered a strong business case for outsourcing their ED professional services.  Specialization in this field has led to efficiencies that result in an undeniable value. Often the knowledge and experience of the leadership and operational personnel of an organization specializing in ED management can help a hospital improve the quality of care, and reduce both costs and risk. Incentive clauses are often built into mutual goals. Improving patient safety and the hospital’s reputation also results from a strong partnership with an outsourcing arrangement. Having an ED group that has the resources to make improvements and, therefore, is willing to share the risk can be a huge relief for lower-volume hospitals.
 
A national ED practice management group can provide a great value by consolidating costs associated with running the ED, such as recruiting, scheduling, malpractice insurance, and patient billing. Practice management groups also have experts in assisting rural and low-volume hospitals with services such as operational analysis, patient satisfaction training, and risk management evaluation. These groups are led and advised by experienced physicians, nursing leaders and tenured business professionals who can navigate the ever-changing healthcare industry.
  
Ways Outsourcing May Improve Financial Performance
 
1.  Reduces Costs

  • Benefits similar to that of a group purchasing organization can be achieved at the local level by leveraging the size of the national organization 
  • Save money through economies of scale with leadership and oversight, recruiting, billing, risk mitigation, training (clinical, patient satisfaction, leadership development) 
  • Clusters of hospital customers for recruiting -- shared staffing provides larger pool of providers who are well versed in common processes and goals of the ED Practice Management group 

2.  Improves Service/Stimulates Growth 
  • Promotes the value of quality care closer to home by putting patient safety, patient experience and continuity of care as the top priority 
  • Improving overall quality and reputation through practice of competent clinicians who are aligned with patient care goals and with access to state-of-the-art patient experience tactics and strategies 

3.  Decreases Stress on Internal Resources
  • Centralized credentialing and physician billing, dedicated recruiting, med mal, professional fee coding and billing
  • Strong collections process
  • Onsite experienced physician leadership supported by national experts

Comparison of ED Management Options

McGrewTable2.JPG

Are You Ready For Outsourcing?
 
Outsourcing is a big step, but it can be easier and quicker to enact than you might think. If you have any of these issues, you could be operating at greater efficiency with strong local practice in 90 days or less.

Identified Challenges:
  • Provider reimbursement
  • Order sets and value-based purchasing measures
  • Throughput, ED boarding, process improvement, the Joint Commission and DNV Healthcare surveys
  • Reputation
  • Practice stability 
  • Leadership and staff buy-in
  • A clear understanding of your metric goals/key performance indicators (KPI)
  • Defined success for an outsourcing partnership
  • Receptive to Lean methods and standardization of processes
  • A desire for patient-centered care and continuous quality improvement 

Frequently Asked Questions About Outsourcing
 
Q. What are the risks of outsourcing?
 
A. Perceived loss of control, but with an appropriate agreement, shared risk and defined goals and objectives can be achieved.
 
Q. What are some of the reasons hospitals outsource?
 
A. Challenges in recruiting and managing physicians; larger pool of physicians to staff ED; professional fee billing expertise.
 
Q. What resources could I expect to leverage from a national business partner in physician staffing and practice management?
 
A. Clinical oversight; professional fee billing experience and expertise; improved patient satisfaction; experienced physician oversight and management; and access to best practices.
 
Q. What if I like my current physicians but need more resources and training support?
 
The benefits of outsourcing ED practice management does not necessitate a change in your current physician staff. Ask for a program that complements your existing medical staff by providing resources not currently available to help the practice be more successful.

For example, EmCare offers customized services for rural, lower-volume, specialty and critical access hospitals. Options include:
 
  • Incorporating employed physicians without changing current agreements and compensation based on hospital preference
  • Seamlessly providing coverage support with EmCare-affiliated physicians to fill open positions and seasonal needs versus costly locum tenens coverage
  • Integrated ED and hospitalist services
  • Patient satisfaction improvement programs and preparation for ED PECS using smart devices (phones and tablets) at the bedside for real-time patient satisfaction surveys and reporting
  • Professional fee billing (that incorporates existing providers also) to help reduce the hospital’s net operating costs of emergency department, hospitalist or anesthesiology coverage
  • Dedicated provider education resources for compliance, EMTALA and risk management
  • Emergency Department flow and metric improvement with Lean-certified nursing consultants
  • Electronic medical record implementation, support, and ongoing documentation training 

Visit the Solutions Section of EmCare's website to learn how we can help you solve your challenges - together.

Mark McGrew

Mark McGrew, MBA, is the Regional Client Administrator, EmCare Physician Services. Mark has been in emergency department operations for nearly a decade. He is responsible for more than 40 rural clients in more than a half-dozen states. He is focused on delivering quality healthcare support to client hospitals, physicians and the communities they serve.

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