Medical groups must ensure a cost-effective approach to delivering administrative services. This includes automating or centralizing administrative functions. It also involves hiring staff with the necessary training and experience to ensure adequate support, starting with behavioral interviewing to screen candidates for a consumer-service orientation. Groups should also have a clear protocol to address performance shortfalls promptly.
Larger medical groups may find this lever more challenging because departments and sites frequently customize their processes and may have legacy staff requirements. At the same time, large groups may have an advantage of greater resources to secure talent in specialized areas of physician group administration.
Leaders should evaluate how they organize administrative services—according to a centralized, decentralized, or hybrid approach. In doing so, they should consider the additional costs of adopting decentralized models and the risks of managing staff through multiple hierarchies. This is especially important regarding areas subject to regulatory or compliance review.
Centralized services may be appropriate for domains requiring significant expertise, such as:
- Revenue cycle
- Documentation and coding
- Compensation and human resources administration
- Patient safety
- Research administration
- Information technology and cybersecurity
Regardless of the service model, groups should establish KPIs and minimum service standards to maintain performance at desired levels.
One large academic health system with multiple hospitals, several academic and community medical groups, and a broad geographical service area recently reorganized its approach to revenue cycle management. It integrated revenue cycle functions into a centralized billing office responsible for managing professional and technical revenue streams.
Initially, regional departments retained prior authorization and insurance verification functions. However, a review of benchmarking data showed that this organization’s cost to collect was higher than the market. As a result, leaders consolidated the referral, precertification, and insurance verification functions.
The organization expects to reduce the cost to collect by $2.6 million annually. To ensure that the new approaches are sustainable and well-monitored, the organization implemented new standardized metrics and benchmarks, optimized technology to improve patient payments and portal use, and standardized reconciliation practices.
