Don't Let Physician Practice Acquisition Derail Your Back Office

Karen Minich-Pourshadi, for HealthLeaders Media , February 21, 2011

It's a predicament to which Baptist Healthcare System in Louisville, KY, can relate. Baptist Health is comprised of Baptist Hospital East, Baptist Hospital Northeast, Baptist Medical Associates, three Baptist Urgent Care centers, four BaptistWorx® occupational medicine clinics and two outpatient centers in the Metro Louisville area. Baptist Health is a large, multispecialty, employed physician group and its goal the past thee years has been growth.

Elizabeth North, director of reimbursement for Baptist Health, says in order to focus on fostering relationships with its physicians, continuing to acquire additional practices and secure market share, their attention had shifted away from daily revenue cycle operations. With more than 24,000 claims to file monthly, however, —funds needed to continue the pursuit of growth—they couldn't afford the distraction.

Having gone through a reduction in force in this department in 2007, the team was already operating at capacity. Then, when their growth strategy took hold—adding numerous physicians—a backup on the back-end emerged. The acquisitions had rapidly outpaced the team's capacity and accounts receivable days hit an all-time high of 50.

"We are in a highly competitive market, so any delay on our part with our ability to onboard these new physicians might damage us from a competitive standpoint," North explains. "We had decided already that our main goal was to grow and to do that we had to have a stable income."

Given the challenge, some healthcare providers might have decided to slow down growth efforts, shuffle people around, or hire additional back office personnel. North, however, says the cost of hiring, training, and ramp-up dictated that it would not be financially prudent to keep this in house. North says Baptist Health lacked the internal infrastructure, the correct number of employees, and the expertise needed to stabilize and improve its core revenue cycle, including claims management, A/R follow-up and collections, for the practices they had already acquired and the ones they wanted to add as part of the strategic growth plan. 

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