The gap between hospitals with strong and weak margins is growing, according to Kaufman Hall, and the top hospitals are vigilant about evaluating their physician strategies.
"Data from the National Hospital Flash Report show that not all hospitals are generating losses; higher performing organizations are carefully reviewing their employed physician portfolios with a focus on profitable service lines and are more effective at deploying advanced practice providers," stated the research firm in the second quarter Physician Flash Report, released Aug. 5.
The report surveys more than 200,000 employed physicians and advanced practice providers in 100-plus specialties to determine average provider productivity and financial investments. The median net patient revenue per full-time employed provider was up 4% year over year to $389,040 for the second quarter.
Additional key performance metrics include:
1. Physician work relative value unit per FTE: 6% increase to 6,095
2. Physician compensation per FTE up 3% to $367,053
3. Support staff per 10,000 provider wRVUs dropped 5% to 3.10
4. Investment or subsidy per physician was up 3% to $299,937
Kaufman Hall recommended hospital leaders examine their employed physician portfolio regularly to identify practices most important to the health system's long-term sustainability and ensure they're using APPs appropriately.
"Organizations can review operational and financial data to assess the effectiveness of APP integration efforts," according to the report. "APPs that assume leadership positions can help shape and execute strategies for building team-based models of care."
Labor expenses as a percent of total expenses rose slightly to 83.9% for the second quarter of 2024, from 82.8% over the same period last year.
Striking the right balance of physicians and APPs isn't easy. Nicholas Nussbaum, MD, director of medical affairs and community services at Adams Medical Group, part of Adams Health Network in Decatur, Ind., recently told Becker's that hospitals can't treat the two groups as interchangeable parts.
"Too many organizations look at who is retiring, relocating, etc., and start immediately recruiting for the like/same in a replacement, at least in regard to credentials, instead of looking at the work that provider was doing and assessing who, and with what credentials, would be best suited to do that same work going forward," Dr. Nussbaum said.
He also noted the question of "how many" providers to bring in after an exit is "almost universally overlooked" since the right number often isn't a one-for-one replacement. Changes in training, scope of practice and structure between even physicians of different generations, as well as APPs, could mean different expectations in shift length, call structure, clinic duration and more.
"Accounting for these differences, or failing to do so, has been a significant challenge at the organizational level for everyone across the country, regardless of size or geography," said Dr. Nussbaum. "Add in the ongoing battles/fluctuations in scope and licensure for APPs, and it becomes clear that assessing what works needs [to be] done is probably less than half the battle when deciding who/how many providers to hire."