The rate at which hospitals and health systems are acquiring physician practices and hiring physicians from private practice continues to increase steadily. In the 2012 annual report published by Merritt Hawkins, it is reported that solo practices are disappearing, with projections that by the end of 2014, three in four doctors will work for hospitals.1 Describing the demographics further, Medscape reports more than twice as many physicians under 40 are employed versus self-employed, and more female physicians are employed than male physicians. However, in the age group over 40, more physicians are self-employed.2
This data may not be surprising, but it does lead risk managers to ask how they will manage this additional risk exposure. Along with an already long list of things to accomplish in a day, unfamiliarity with the risk issues related to physician practices can lead to uncertainty and frustration for even the most seasoned professional. Because office practices have variable settings with limited resources, establishing a framework to approach physician risk prior to acquisition or employment helps set the stage for well-structured risk mitigation.
As hospitals consider acquiring practices, there should be many questions running through the minds of organizational leaders, including:
- Does bringing physicians on as employees into the hospital or system help meet the organization’s strategic goals?
- Are other systems in the area snatching practices up such that your hospital may not be able to meet the community need for population management?
- Is the philosophy to employ physicians before somebody else does?
Regardless of strategy, risk management should have a seat at the table early on and preferably before the physician is walking through the door for orientation.
Once the decision is made to pursue a particular physician or group, the following list for “pre-diligence” information gathering should be contemplated as a baseline. A high-level scan can include vetting the physician’s interest in and loyalty to your hospital and, for those already holding medical staff privileges, learning about their reputation among other physicians, staff, patients and community members, learning about the group dynamics and office staff turnover, seeking out satisfaction data in the public domain, conducting public internet searches for tax matters and bankruptcy filings, examining Board of Medicine data and more. As the organization’s interest piques and conversations begin with physicians about acquisition and employment, risk management should be poised and ready to get into assessment mode.
While there are many elements that should be covered during the due diligence process for practice acquisitions, spending time in providers’ offices can offer insight into practices and culture unlike any other due diligence method – an opportunity to maximize early. Having this window to meet and talk to physicians, practice managers, clinical support staff and others in their own space allows risk managers to assess the level of sophistication of office leadership and physician engagement in practice management. It’s not just these important conversations that are helpful with information gathering, but also the opportunity to tour the space, see the condition of equipment and exam rooms firsthand, observe handling of confidential information, assess patient flow and ask more pointed questions.
Once armed with data gleaned from an onsite visit, risk managers can offer risk treatment solutions to address the identified gaps that, when filled, will improve patient safety and reduce risk. One example in the office setting is establishing a clear process to track and report the results of lab and other diagnostic tests. Sedgwick healthcare risk management has established a data profiling system that assigns a risk score to physician offices based on their compliance with best practices. From this profile score, risk management goals can be established that can be objectively measured for increased compliance over time. For those with a self-insurance vehicle for liability coverage, these compliance measures can be used to establish premium credits or surcharges during each liability policy year.
In addition to introducing risk management services and event and claim reporting expectations during the visit, risk managers can assist physicians and practice managers in complying with best practices by providing sample policies and procedures and toolkits, periodic telephone support calls, and by organizing self-audits to monitor compliance with new initiatives. Establishing collaborative relationships with physicians and office staff opens opportunities to integrate relevant practices that are already well-embedded on the hospital side of the business into the office setting. These include practices for release of medical record information, patient identification and specimen management. Education of office staff in basic risk management principles helps extend the risk manager’s reach and empowers staff to engage in proactive activities addressing patient safety in each setting.
It’s important for risk managers to take a holistic view of what to bring to the table to ensure each physician and their office staff members have what they need to function efficiently, safely and in a manner that will ensure the best outcomes for patients in the most cost-effective way. Being accessible as an information resource, planning regular visits to the offices and resourcing risk reduction opportunities identified during the assessment process are practical ways to manage the new risks of employed physicians and acquired practices. A collaborative approach based on sound data metrics and a little mentoring can lead to a win-win partnership.
Read additional perspective on healthcare risk management and professional liability issues in our latest Professional Liability Risk Resource newsletter and visit us to share your own experience at ASHRM booth 425.
Ann Gaffey, RN, MSN, CPHRM, DFASHRM – SVP, Healthcare Risk Management and Patient Safety
- 2012 Review of Physician Recruiting Incentives: An Overview of the Salaries, Bonuses, and Other Incentives Customarily Used to Recruit Physicians. Found at: http://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mha2012survpreview.pdf
- Kane, Leslie. (March 11, 2014) Employed versus Self-Employed: Who is better off? Found at: http://www.medscape.com/features/slideshow/public/employed-doctors