Should You Add a Nonphysician Provider to the Mix?
Your practice has grown to the point that same-day appointment slots have all but disappeared. Your established patients are requiring more time and attention than you can comfortably provide, and new patients are being turned away. Big picture: you're losing revenue and risking the loss of patients to other practices.
Sounds like it may be time to add a nonphysician provider (NPP).
What Do Better-Performing Practices Know?
For most practices, adding a NPP can really pay off. In fact, the MGMA Performance and Practices of Successful Medical Groups: 2014 Report Based on 2013 Data report showed that 70 percent of better-performing practices employ NPPs, who bring plenty of benefits to the table, including:
More patients. Proper use of NPPs allows practices to care for more patients and frees up physicians to perform work that only physicians can do. Besides increasing practice efficiency and physician productivity, physician satisfaction also can be improved by the proper use of NPPs.
Improved provider-patient relationships and enhance patient satisfaction. NPPS generally spend more time than physicians with patients for routine visits. This translates into a deeper provider-patient relationship and enhanced patient satisfaction. Increased patient satisfaction demonstrates outcome improvements for purposes of payer panel inclusion.
Lower cost. NPs and PAs can perform 80 percent or more of the tasks a physician can1 but at significantly less cost. For example, in 2012, the median total compensation for an NP in primary care was $94,062; the cost that year to employ a family medicine physician was $207,117. A practice’s demonstration of decreased cost is another criteria for payer panel inclusion.
Reimbursement. Federal and private health plans, including Medicare, set their onw rules for NPP billing and reimbursement. Depending on the level of supervision by physicians, NPPs generally are reimbursed at 85 to 100 percent of the physician fee schedule.
Reduced insurance and liability costs. Studies have shown that a PA’s liability insurance cost is a third of a physician’s liability rate. Likewise, NPs have historically enjoyed substantially lower rates of malpractice claims, as well as lower costs per claim.
The Balancing Act
But there is a delicate balancing act to adding a NPP to the schedule.
Supervise appropriately. Depending on your state’s regulations, you may need to implement and document a formal pattern of supervision — regular meetings or random chart reviews. NPPs come to the practice with various levels of training, education and experience, so they may require close monitoring. In addition, the nature of the practice, complexity of patient population and supervisory style of physicians in the practice must be considered.
Schedule carefully. From a profitability standpoint, mid-levels need to see a substantial number of patients per hour. Yet, if the idea is for them to provide same-day access for acute care, they can’t be 100-percent scheduled throughout the day. You’ll need to carefully monitor unused slots.
For more information and a summary of state laws, see the American Academy of Physician Assistants’ website, www.aapa.org, and the American Academy of Nurse Practitioners’ website, www.aanp.org.
Utilize correctly. Underutilized or improperly utilized NPPs — those assigned tasks above or below their licensure and skill level — can undermine profitability, so prepare specific job descriptions/skill requirements for each one you hire. Establish benchmarks to measure performance, including productivity, utilization and patient satisfaction. Savvy practices create monthly and YTD income statements for their NPPs and allocate overhead to them to evaluate their performance level.
Compensate appropriately. Successful practices treat NPPs as healthcare providers, not employees. Thus, pay is incentive-based (i.e., a competitive base salary with financial incentives around volume, quality outcomes, cost containment, etc.). Good sources of comparative salary data include the Advance Salary Survey published by ADVANCE for Nurses at www.nursing.advanceweb.com (search for “salary survey”) and Healthcare Salary World at www.healthcaresalaryworld.com (click on “salary”). For PAs, try the U.S. Bureau of Labor Statistics at www.bls.gov or PayScale at www.payscale.com.
Are your physicians at maximum capacity? Stockman Kast Ryan + Co. can help you evaluate whether adding a nonphysician provider is the right move for you.