A Medical Group Operational Assessment

    Posted by Judy Treharne on Jun 21, 2018 1:34:33 PM
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    Across the nation, health system medical practices are showing signs of ill health. While some of the symptoms of medical group decline are obvious, others can be subtle and often go unrecognized.

    But ignoring the signs of an ailing medical group can be dangerous, and health systems that do not make substantial efforts to strengthen their owned practices and improve operational efficiency may get left behind in the current healthcare climate.

    Diagnosing Performance Problems in Your Medical Group

    When a patient visits her doctor, whether she is experiencing identifiable symptoms or vague feelings of malaise, the first thing a good physician will do is listen and ask questions.

    The key to improving a patient’s health involves correctly diagnosing problems and providing recommendations for her care.  Yet a positive outcome is not possible without the patient’s adherence to the recommendations that have been given.

    Likewise, when a health system medical group is suffering from losses in the millions, or is struggling to keep up with clinical integration and quality standards, or is losing market share, a vital first step is to take a close look at the various parts of the whole to diagnose where the problems lie and then make recommendations for improvement.

    To be more specific: In order to determine the underlying causes of sub-optimal medical group performance, it is critical to do a deep-dive into key areas of business administration by asking the right questions, reviewing the appropriate data, and comparing workflows and processes to best practices.

    This all-inclusive evaluation of a medical practice or group is known as an operational assessment.

    Goals of an Operational Assessment

    An operational assessment that adds the greatest value to an organization is one that takes a comprehensive look at the health system medical group in order to identify areas of vulnerability, pinpoint potential improvement opportunities, and align the vision of the health system and the practices. Many hospitals or larger health systems choose to use an objective and experienced third party to perform this assessment, keeping the following goals in mind:

    1. Evaluating the medical group against best operating practices and benchmarks for high performing hospital-owned medical practices;
    2. Identifying gaps in operational and financial performance when compared to best practice; and
    3. Providing detailed feedback with clear recommendations so the medical group can establish a vision, build consensus, and move forward in executing strategies to improve operational and financial performance.

    Keys Areas of Business Administration to Examine

    As mentioned, the operational assessment should include a review and recommendations in certain critical areas of business administration. These areas are:

    1. Operational Governance
      Making sustainable changes in your medical group begins and ends with creating better alignment between physicians and health system executives.
    2. Management Infrastructure
      Your management team should serve as the implementation arm of physician/executive partnerships at the practice, medical group, and system levels.
    3. Human Resources
      Compensation and benefits costs are a critical component of a health system medical group strategy and must be considered carefully—especially bearing in mind that hospital-level benefits are not sustainable in the medical practice context and often guarantee financial operating losses in owned medical practices.
    4. Practice Operations
      When making decisions regarding medical practice operations, two priorities should drive the process: first, patient/customer expectations; and second, physician productivity.
    5. Revenue Cycle Management
      By performing an in-depth review of revenue cycle workflows and key performance metrics, you can develop a valuable roadmap to identify where revenue cycle leakage may be occurring—leakage that creates significant financial risk.
    6. Information Technology
      Decisions about information technology solutions should fall firmly into the realm of operations, not the hospital’s IT department, and should involve the end user to ensure the tools will facilitate provider productivity and patient care.
    7. Finance and Accounting
      A medical practice gap analysis supplements traditional financial reporting models and emphasizes productivity indicators that drive revenue.

    As you dive into each of these areas of business administration, you’ll find that careful observation and analysis should lead to detailed recommendations for improvement in each area, along with a plan for implementing those recommendations.

    In future blog posts, we will discuss the deeper benefits of an operational assessment, and we will take a look at how such an assessment can help you reduce practice losses and improve the financial viability of your medical group.


    Interested in learning more about conducting a medical group operational assessment? Gain access to the downloadable guide here.



    Topics: Physician Practice Management, Medical Group Consulting

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