A Retrospective Analysis of a Consolidation of Urology Practices, and the Resulting Physician Productivity in the Provision of Urologic Care

This project has been officially exempt from full institutional review board review for human subjects research. The author has declared that no competing interests exist. The author thanks John Huppertz, PhD, for his guidance in this project.

During the last 10 or 20 years, the percentage of solo or small medical practices has declined significantly, due to rising costs, transitions to electronic records, and other increased expenses.(1) Many physicians are joining larger practices, attracting the attention of critics of physician productivity, because often when physicians give up their own solo or small practices to join larger groups, their productivity declines.(2) My retrospective analysis was carried out comparing sets of physician productivity data after physicians joined a larger, conglomerate practice from solo or small practices to study the effects of the consolidation of physicians into larger group practices and delve into management strategies for ideal sizes of physician groups in the modern U.S. healthcare system. The previous research in the literature on topics similar to this is minimal and dated; therefore, this project provides an updated study, especially after many aspects of the Affordable Care Act have been implemented. There is reason to believe that the productivity declines that often are seen do not automatically accompany these consolidations, but, rather, that they may result from suboptimal management practices. Due to strong physician leadership, a superior management team, a steadfast support staff, and well-equipped facilities, I hypothesize that the physicians at the consolidated urology group that our study focused on have become significantly more efficient and productive than when they worked in their own small practices.

The design of each office of this group is similar to all of the others.

In total, this consolidated urology group has 11 offices. It consists of 24 urologists, who originally came from more than 10 different practices to form this current one, with nine physician assistants and four nurse practitioners. This is called a “roll up” or consolidation strategy, where there is horizontal integration within the community by absorbing individual practitioners into a larger group. The design of each office of this group is similar to all of the others, particularly in terms of equipment, and is staffed and managed likewise, allowing physicians to provide the same quality care at each location. There are separate staff teams for check-in, bringing patients from the waiting room to the exam rooms, phlebotomy, medical assistants and nurses, care coordination, scheduling, and check-out. Daily operations of the main office alone require the following staff (Figure 1):

• One practice manager;

• Six people on the check-in team;

• Six people on the check-out team;

• Five patient guides (to bring patients from the waiting room to the exam room);

• Four people on the scheduling team;

• Two or three phlebotomists;

• Four people on the care coordination team (which is involved with contacting other physicians for records, among many other things);

• Four people on the triage team;

• Five people on the procedural suite staff; and

• Up to 15 certified medical assistants and nurses working with the providers at all times.

Figure 1. Organizational chart of the main office of the consolidated urology practice. The positions are outlined, and the number of members pertaining to each is given.

This practice organization and operation is significant because the solo or small practices from which the physicians came did not have this kind of organization, and certainly not to this level. This specific office also has 12 board-certified urologists, two urologic pathologists, five certified physician assistants, one certified nurse practitioner, and one certified physical therapist, all of whom provide the highest quality urologic care to the surrounding community. The office also has a procedural suite on-site where physicians can perform lower-risk procedures and those only requiring local anesthetic, which helps improve continuity of care from office visits to procedures. This office is arguably the best representation of the group’s productivity, efficiency, and quality, because it is the main office, with the greatest number of physicians and the largest facility. Most physicians at this location also work at several of the practice’s other locations, providing good examples of how this practice’s other locations and physicians are performing.

I believe that this practice fosters greater productivity because it allows each physician to practice at the top of his or her license and promotes a culture of friendly competition to strive for greater productivity with higher-quality care. Furthermore, because the physicians at this practice have a designated management company working for them, they can avoid much of the administrative work and hassle associated with solo or small practices, particularly in accounting and billing. The medical laboratory and procedure suite located within each office also allow for the provision of more efficient and higher quality urologic care. Consolidating many physicians into one group makes it possible for the practice to afford, due to the increased capital earned by this larger group of physicians, more advanced equipment, a management company, and a greater number of support staff in order to help streamline the care in the office and allow productivity to flourish.

Methodology

Each physician’s productivity during his or her initial years in this larger practice was compared to that physician’s productivity as a solo practitioner, by studying the immediate productivity data after the transition to the new practice. Roos(2) and Kimbell and Lorant(3) reported that physician productivity declines when physicians go from solo or small practices into larger ones. To test the hypothesis that physician productivity has improved, we used total relative value units (RVUs), while noting patient counts for efficiency measures, as an accurate way of measuring physician productivity. RVUs are the ideal way to measure physician productivity, because they measure units of work, taking into account the costs and effort expended in order to provide a particular act of care. Thus access to the total RVUs and patients cared for per year for the physicians was requested from their management company, which does accounting and billing for them, making sure to exclude the RVUs generated or patients seen by physician assistants and nurse practitioners. After those data were collected, a one-tailed t-test was performed to determine whether physician productivity was statistically significantly higher and significantly increased while working as a provider of this larger practice. This project was a natural experiment, as all of the physician consolidation had already occurred and the majority within the past decade.

Results

By analyzing the practice’s largest (and main) location, with its 12 physicians, the dataset shows a statistically significant increase in productivity for 10 of the 12 physicians (p = .006) while working in this group (Figure 2, Table 1). However, further investigation and discussion with the management company revealed that a new physician (Physician A) was hired to relieve some of the work of some of the other physicians (Physicians B and D). With the knowledge that the productivity of those two physicians was intentionally compromised, it can be safely assumed that their lack of increased productivity was not due to the group practice’s nature, and the statistical analysis of productivity trends should be calculated omitting the datasets of Physicians B and D. The resulting one-tailed, paired t-test shows a more convincing significant increase in productivity (p = .000784), with productivity increasing by an average of 22% each year (Figure 2, Table 1). One can also look at patient counts as an aspect of physician productivity with efficiency. In this practice, the patient counts seen per physician roughly follow the pattern of increasing RVUs, with nine of the 12 physicians showing a statistically significant increase in patients seen per year (p = .04176) (Table 2). However, if one takes into consideration the two physicians (B and D) who intentionally compromised their workload with the hire of a new physician (A), and not ignoring their data, the increase in patient counts becomes more significant (p = .005), with the average number of patients cared for increasing by 14% each year (Table 2).

Figure 2. Productivity of 10 of the 12 physicians in the consolidated urology practice during each physician’s first two years in the practice, based on their total relative value units (RVUs) generated. Physicians B and D were excluded because they intentionally decreased their productivity. A p value was calculated and is shown at the top of the figure. The mean percent increase in productivity in RVUs for the practice is drawn in bold black, and its value is displayed above.

Discussion

The results confirm the hypothesis. The results from the statistical tests on the relation between total RVUs generated per physician and his or her initial years in this consolidated urology practice are significant. In addition, the relation between the total number of patients cared for per physician and his initial years in this consolidated urology practice also yielded significant results. Thus I conclude that during a physician’s time working in this urology practice, he will be more productive and efficient in his work than previously in the small or solo practice. The p values generated from the one-tailed t-tests on total RVUs and total patient counts are both less than .05, the standard demarcation level, demonstrating that the values from Year 2 in the practice are statistically significant and significantly higher than those from Year 1. Moreover, when adjusting the data to exclude those two physicians who were deliberately seeking to decrease their production, as their management company reported, the results are even more significant. The mean annual increase in productivity per physician reached 22%. Thus with total RVUs as the main measure and total number of patients cared for as a supplemental measure for efficiency and productivity, it can be argued that physicians working in this practice become more productive than they would have been had they remained in solo or small independent practices.

This study is relevant to the current healthcare environment because the percentage of physicians in solo or two-physician practices has declined significantly—from 40.7% to 32.5% over the years 1996 through 2005—and continues to decrease.(1) In a 2002 cross-sectional study, Conrad et al.(4) looked at the impact of financial incentives on physician productivity in medical groups. They found there was significant increase in individual productivity based on shares of the group’s income and production, although not as large in magnitude as the increase in individual productivity based on individual production.(4) The Conrad et al. study also showed that a financial incentive for the medical group was not significantly related to individual physician productivity.(4) Although my study does not measure or test what was done in this study, it does point to the fact that in group practices, individuals are not as inclined to be more productive.

There is no exact or recent project in the literature like my study on physician productivity, but Kimbell et al.(3) and Roos(2) demonstrated that larger group practices have decreased returns to scale than solo or small group practices, whereas Egan(5) and Frech and Ginsburg(6) argued that group practices resulted in greater productivity. Some reasons for the findings of inefficiencies in larger practices from the literature are that there are more managerial difficulties, the patient care provided is more complex, and there is less cost control.(3) In addition, small practices allow for personnel to specialize in selected tasks as the practice grows, making those personnel more effective and refined.(3)Miller(7) cited Medical Group Management Association (MGMA)(8) work, reporting that when practices are owned under a private practice model, productivity is higher, and that is the type of model that the urology practice in this study uses. In addition, MGMA reported that group practices under this model have shown an increase in RVUs in the past five years.(8)

These sources on physician productivity in medical groups provide good insight, but several offer conflicting conclusions, and many are nearly 30 years old. Therefore, another study of this relation, such as this one, should be welcomed to see how a modern group practice affects physician productivity, particularly in the post-Affordable Care Act healthcare environment.

The consolidated urology practice investigated in this study is shown to have fostered physicians to become increasingly more productive throughout their time in the practice. Through discussion with many of the physicians, it became clear that consolidation into this larger practice has had positive effects on their RVUs generated, especially compared with their time in solo or smaller practices. Subsequently, after acquisition and analysis of total RVUs generated during each physician’s initial years at this urology practice, it was confirmed that the physician’s productivity grew while at the larger practice. The results of this study are in direct opposition to those found by Kimbell et al.(3) and Roos(2), but follow the same vein, yet are over 40 years updated, as those results found by Egan(5) and Frech and Ginsburg.(6)

Some of the unique aspects of the urology practice we studied are that it is a consolidation of 24 physicians into one group, it has 11 well-equipped locations with advanced technology, and it has its own management company to oversee the business aspect of the medical practice. By bringing the top urologists in the area together, this practice fosters a culture of competition among its physicians and encourages each physician to be a leader in his field by continuing to strive to be as productive—in terms of RVUs generated per year—and efficient—in terms of treating more patients with the same quality over a shorter period of time—as possible. By having 11 locations that provide urologic care, this practice and its physicians can care for a large number of patients from every region of the greater community. Each location of the practice has the newest, necessary technology for office visits as well as a procedure suite, allowing for greater ease for effective treatments and care for their patients with a wider range of techniques. Furthermore, the strong, judiciously sized support staff in all aspects in the offices, from check-in to nursing, allows the physicians in the practice to maintain the highest quality of care, even with increasing productivity. Finally, by retaining a medical management company, this consolidated practice and its physicians can focus entirely on the provision of medical care, and authorize the management company to perform the accounting, billing, and coding for the practice, all of which have become increasingly more complex over the past decade, especially with the advent of the Affordable Care Act. Further, the executive board of the management company and the physicians of the practice have regular, joint meetings to discuss progress and production, ensuring that the physicians maintain their performance and appreciate how their peers in the practice compare.

The results from this study of urology groups consolidated into one larger group provide concrete evidence of effective methods for physicians to transition from independent or solo practitioners to a larger practice entity without losing productivity. However, in order to have a more significant impact, analysis of the productivity and efficiency of all 24 physicians from this practice over 5 to 10 years of data would be warranted, particularly in the case of the new physician (A), just beginning with the practice. Nonetheless, this study and this practice can serve as a model for how to succeed in the modern U.S. healthcare system, with increasing numbers of practices consolidating, and provides an updated guide for practices to follow in order to provide more efficient and productive care to their patients.

References

1. Liebhaber A, Grossman JM. Physicians moving to mid-sized, single-specialty practices. Center for Studying Health System Change. Tracking Report No. 18. August 2007; www.hschange.com/CONTENT/941/.

2. Roos NP. Impact of the organization of practice on quality of care and physician productivity. Medical Care. 1980;18:347-359.

3. Kimbell LJ, Lorant JH. Physician productivity and returns to scale. Health Serv Res. 1977;12:367-379.

4. Conrad DA, Sales A, Liang SY, et al. The impact of financial incentives on physician productivity in medical groups. Health Serv Res. 2002;37:885-906.

5. Egan DM. Income and productivity of physicians in fee-for-service, multispecialty group practice. Presented at the Western Economic Association meeting, Long Beach, California, August 21-22, 1969.

6. Frech HE, Ginsburg PB. Optimal scale in group medical practice: a survivor analysis. Econometrics Workshop Paper No. 7207, Department of Economics, Michigan State University, 1973.

7. Miller NS. Productivity, ownership linked. OB GYN News. November 2010; 45(11):45.

8. MGMA: productivity, costs and revenue affect practice ownership. Healthcare Finance News. September 2010.