What a difference a day makes; or, in this case, a couple of months. Back in February, the fastest growing segment of the physician marketplace was Private Equity backed roll-ups. The consolidation was real – and accelerating each year – as outlined in the February 19, 2020 JAMA article “Private equity’s takeover of physician practices has more than doubled in three years, study finds,” (by Jane M. Zhu, M.D.).
The consolidation was creating opportunities, increased revenue, and higher EBITDA, and these trends were shining a positive light on the investments. The biggest challenges were integrating the practices, standardizing office flow and billing, and developing a comprehensive payer and marketing strategy. These were all achievable and manageable challenges for well-structured groups, backed by established Private Equity firms. The positive articles and fast-rising stats were everywhere.
Enter COVID-19, March 2020. Suddenly the challenges previously identified were mere drops in the tsunami that was hitting the groups. Healthcare and physician groups changed in an instant. Offices re-positioned to telehealth, when possible; clinicians were now soldiers in a new battle; and many offices were closed to in-person visits. The wave hit hard and continues to re-shape the healthcare world and the physician marketplace.
Cut to May 2020. The waters of the tsunami are slowly receding, the damage continues but at a slower pace, the race for a treatment and a cure is on – and practices see a new light. Back in February and March, practices had to act and adapt quickly to what they faced. Now there is time to re-think, re-imagine and re-start.
How does a physician business restart? What does it look like? How has it changed forever? There is an answer, cloudy as it may seem now: Follow the steps and a plan. We all have hope, but as we know “hope is not a plan.” The pathway and plan to restarting the business of a physician group lies in the past, the present, and the future.
Steps Private Equity Firms Should Take with their Physician Roll-up Entities:
Step 1: Review Your 2019 Procedures and Plans
- All practice data, visits, revenue, claims and productivity
- Technology platforms – EHR, Practice management, telehealth
- Payer contracts, billing success and payer mix
- Practice Financial Health Score
- Referral statistics – patient growth
- Practice marketing and competitor analysis
- Patient satisfaction
Step 2: Assess the Past 60 Days During COVID-19
- All practice data, visits, revenue, claims and productivity
- Practice Financial Health Score
- Telehealth performance and plan
- Overall office technology performance and plan
- Office procedures and infection control plan
- Staff and Patient Safety conformity to CMS and OSHA guidelines
- Patient feedback and satisfaction
- Government Assistance programs and billing changes
- Short-term effects on compliance and quality scoring
- Employee feedback and satisfaction
Step 3: 2020 Planning and Restart for Physicians
- Design the plan based on Step 1 and 2, align the plan with your future goals
- Correct the challenges of 2019, and stabilize financial health
- Identify opportunities for new revenue
- Implement the new plan for a “Day 1” for which the pandemic has reset the practice. Change accordingly and succeed
- Partner with organizations that can assist in the process
Medical Advantage is one such highly experienced organization that can assist you in identifying, evaluating, planning, and achieving these objectives. We have worked for over 20 years as a trusted advisor to independent physicians, large provider systems, and other healthcare entities to manage the business of medicine.
