Improving EPN performance through evidence-based strategies

Healthcare organizations risk significant vulnerabilities and financial losses if they fail to proactively address inefficiencies within their operations and revenue cycles. Without a clear, focused approach to strategic positioning, leveraging market insights, and adopting best practices, they can quickly lose market share and hinder their potential for growth.

Many regional healthcare organizations face significant challenges in managing their finances, employees, operations, and strategic growth due to a combination of internal inefficiencies and external pressures. These challenges include rising costs, declining reimbursement rates, delayed payments, complicated cash flows and collections, difficulties in recruiting and retaining skilled staff, misaligned compensation models, underutilized resources, and navigating ever-changing compliance requirements.

The complexity of healthcare financial and operational processes often makes it challenging for internal teams to pinpoint effective solutions. This is where data-driven independent evaluations prove invaluable, uncovering hidden vulnerabilities and offering actionable insights to enhance performance.

Why Healthcare Organizations Need Unbiased Insights for Operational Efficiency

An independent evaluation provides an objective analysis of a company’s operations and finances, free from internal biases, politics, or organizational blind spots. Experts uncover inefficiencies and areas for growth while ensuring compliance with regulatory guidelines, thereby reducing the risk of costly penalties.

Healthcare administrators and boards prioritize achieving strong operational and financial performance for long-term success and sustainability. Professional assessments equip leadership with actionable insights, enabling informed decisions about strategic growth and process improvements. Additionally, these evaluations benchmark performance against industry standards, serving as a guide for identifying opportunities, streamlining operations, and bolstering long-term growth.

A Real-World Solution for Optimizing a Medical Center’s Employed Physician Network

A mid-sized, non-profit community medical center with approximately 130 licensed beds and nearly 50 employed physicians, along with advanced practice professionals (APPs), operated multiple specialties across 20+ practices. Initially, the healthcare organization aimed to evaluate its orthopedic service line, exploring strategic options for growth and countering regional competition. However, during the assessment, a key senior leader accepted a role elsewhere. Following their exit, it became clear that the employed physician network (EPN) required substantial operational, financial, and strategic improvements.

The Board and senior leadership grew increasingly alarmed about the EPN’s finances as external pressures and competition intensified. Physician subsidies had become unsustainable, and bondholders expressed mounting concerns over the organization’s financial trajectory. The situation was dire: the EPN was losing over $300,000 per provider annually. What began as concerns about the orthopedic practice and its underutilized surgery center quickly evolved into a broader systemic issue.

To address these challenges, the healthcare organization’s leadership turned to an external evaluation, seeking an unbiased perspective on the EPN's operations and financial health. Their goal was to identify actionable solutions to stabilize the network, relieve financial strain, and create a sustainable structure for the future.

The Process

Senior leadership of the healthcare organization initiated a comprehensive assessment of the entire operational structure of the EPN, encompassing all clinics and locations. To guide the turnaround process, a seasoned practice management expert was deployed on-site to collaborate with the assessment team. A thorough physical analysis of each clinic location was conducted to evaluate the “physical plant” and identify potential barriers or benefits.

To build an objective understanding of each clinic’s status, a detailed data collection process was undertaken. The requested data included:

• Productivity by provider (physician and APPs)
• Revenue cycle inputs
• Provider schedules
• Patient visit data and Current Procedural Terminology (CPT®) billing information
• Staffing levels and alignment
• Staff compensation details
• IT infrastructure and backbone

Using the collected data, on-site evaluations, and employee interviews, the team crafted a detailed "current state" analysis. This assessment provided a comprehensive overview of the challenges impacting the healthcare organization's operational and financial performance.

An 8-Part Plan to Optimize EPN Performance and Profitability

After a thorough assessment and consideration of the client’s unique goals, eight key areas were identified as requiring immediate attention to improve the financial and operational standing of the EPN. These focus areas were addressed concurrently through comprehensive workplans and remedial action strategies tailored to deliver measurable outcomes. The key areas of improvement included:

1. Increasing Patient Access: Enhancing appointment availability and streamlining scheduling processes to boost patient volume and satisfaction.
2. Improving Revenue Cycle Management (RCM): Addressing inefficiencies in billing, coding, and collections to reduce revenue leakage and accelerate cash flow.
3. Standardizing Policies and Procedures: Establishing consistent guidelines across the EPN to improve efficiency and compliance.
4. Optimizing Staffing Models and Resource Utilization: Right-sizing staff levels, aligning resources effectively, and implementing cross-system training protocols for flexibility.
5. Conducting Procedural Coding Audits and Education: Testing coding practices for accuracy, to maximize reimbursements and reduce errors.
6. Promoting Collaborative Leadership: Bridging clinicians and C-suite executives to align clinical and operational decision-making.
7. Aligning Compensation Models: Developing structures that incentivize productivity, access, and revenue generation while maintaining fairness.
8. Standardizing Electronic Medical Record (EMR) Templates: Creating and deploying consistent EMR templates to improve documentation and efficiency.

To manage these focus areas, the consulting team worked with management to create structured workplans, assignments, key performance indicators (KPIs), and institute a clear meeting cadence. Key elements of the solution included:

• Optimized Staffing and Resource Use: Staff roles were standardized, utilizing consistent training protocols to facilitate seamless movement of staff between clinics. Attrition-driven cost savings and staff utilization adjustments led to six-figure annual savings.
• Engaged Physician Leadership: A physician advisory committee (PAC) was formed to provide clinical input on broader organizational decisions, promoting engagement and empowering clinicians to drive improvements.
• Aligned Compensation Models: A new compensation framework was implemented, incorporating a work relative value unit (wRVU) model with baseline thresholds to drive productivity and enhance revenues. Providers remained at their current compensation levels with minimal adjustments for the first 12 months.

The Results

In response to the assessment’s findings, the healthcare organization implemented a structural rebuild, resulting in key outcomes including:

• A 9% increase in patient visits compared to the same period in the previous year (PYTD).
• Systematic improvements in RCM, including tracking point-of-service (POS) collections for the first time.
• Enhanced provider coding practices within six months, directly strengthening the bottom line.
• Redesigned EMR workflows that improved usability and operational efficiency.
• Greater clinician engagement through a PAC with a defined tenure and scope.
• A six-figure revenue increase, a reduction in per-provider losses to $100,000 within 12 months, and the EPN reached break-even status by month 18.

Conclusion

Simple structural solutions and a clear implementation timeline enabled the client to reduce expenses, grow their top and bottom line, and lessen financial subsidies to the EPN, ultimately enhancing earnings before interest, taxes, depreciation and amortization (EBITDA). By addressing eight critical focus areas with data-driven strategies and collaboration, the organization achieved greater financial stability, operational efficiency, and enhanced alignment among leadership, clinicians, and staff, establishing a solid foundation for long-term success.

Looking to improve your EPN performance? Let the expertise of Elliott Davis help you overcome the challenges of inefficient healthcare operations. Contact our healthcare team today to schedule a personalized consultation tailored to your organization’s goals.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.