Physician Engagement Through Analytics: Performance and Profitability

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 - David L. Smith, FACMPE
David L. Smith, FACMPE, SVP, Client Services, IMP Revenue Cycle Management

To many people, the evolution of the US health-care system is something taking place through the legislative process—in particular, the 2010 passage of the Patient Protection and Affordable Care Act. What typical US residents do not see are the radical changes taking place in the individual offices of the nation’s health-care practices.

Just a few years ago, physicians were content to practice medicine, leaving the business side to a trusted few whose acumen was responsible for navigating health care’s increasingly complex regulations and oversight. Today, on the other hand, physicians often find themselves immersed in the business affairs of the practice. There is, in fact, a new type of physician: a hybrid who splits his or her time between patient care and practice management. This physician might be responsible for marketing the practice, for developing patient and referrer protocols, for overseeing financial matters, or for acting as the practice’s liaison with hospitals.

Key to the success of this new breed of physician are the understanding and use of data and analytics—the numbers that can both reveal the past of the practice and help it plan for the future. David Smith, FACMPE, senior vice president, practice solutions, for Integrated Medical Partners, has over 20 years of experience as a physician-practice executive; he confirms the change in medical-office management and the growing role that analytics plays.

“We are beginning to see signs of a transition,” Smith says. “Historically, key metrics have been related to physician compensation and what had been collected. That is, a practice could typically take the numbers and tie them to what physicians earned (and took home) and to the profitability of that practice.”

He continues, “What we are moving into now is an environment where value-based reimbursement models are becoming more common, so we are adding variables such as the quality of the care that is delivered to the patient, including measurements such as outcomes or patient satisfaction. It’s not as simple as it has historically been.”

New Drivers With the Same Goals

The drivers of this trend are external, Smith says, but the goals remain the same. “Value-based purchasing initiatives, including those from CMS, states, and national health-insurance companies, are driving the change,” Smith says. “There may or may not be an accountable-care organization involved, and even those have different ideas of what constitutes value: Some are focused on costs; some, on patient care. The transition is driven externally, but it still comes down to the same issue: What is the profitability of the practice?”

The increased focus on quality means deeper physician involvement, and that shift is bringing more attention to analytics, Smith says. “Physicians were interested in profit before,” Smith says, “but now, their compensation may be based on more than collections and productivity. Today, there are attempts to develop compensation models that include factors such as quality, conformance to protocols, corporate citizenship, patient satisfaction, and profitability.”

Smith emphasizes the power of the use of analytics to shape not only the operational and tactical decisions of the practice, but its overall strategic direction as well. “Top practices that are successful organizations are paying attention to profitability issues and to monitoring and disseminating key information,” Smith says. “Where their paychecks come from is something that they are helping employees understand. One common denominator of bad organizations is that they don’t have the information, don’t use it, misuse it, or don’t understand it.”

He continues, “There is a difference between data and information. If you have information, you understand what is going on and have a basis from which you can formulate an action plan. With the right information, the proper course of action often becomes pretty obvious, but data—in the form of mountains of reports and graphs—are not going to make clear what to do.”


Smith notes that for many physicians and practice managers, the sheer volume of available data can be intimidating. “One of the problems with the proliferation of computer systems is the exponential explosion of available data. It’s not unusual to see people throw up their hands,” he says. “Someone whose job it is to produce reports can fall into bad habits and lose sight of how that job function relates to the strategyof the organization.”

For that reason, he recommends that practices base their understanding of their analytics needs on specific strategic goals. “It is best to start with a strategic plan and then determine what pieces of information are needed to assess and facilitate progress toward strategic objectives,” he notes.

Smith also cautions practices that some of their members might take naturally to analytics, while others will be less adept. “Some physicians and managers want to look at numbers every day, and some won’t look unless they are forced to,” he observes. His recommendation is to cater to both: “Have some kind of dashboard that is updated daily (or in real time) to keep those who want to check progress daily engaged,” he says. “Then, have a monthly meeting in which all participants are presented with a review and interpretation of the information.”

Properly accumulated, disseminated, and interpreted, analytics can have a strong impact on the long-term viability of a practice. Smith’s final caution, however, is that using analytics is meaningless without action based on it.

“If physicians are not engaged, the product is not going to be very good—or not efficiently delivered,” he says. “Physician engagement through information sharing is a key way to keep physicians on board with the greater strategic plan. After all, we’re talking about showing them how they are performing and how the entire organization is performing in a purely objective format. That’s powerful information.”