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Cause and effect. Understanding the production-profit relationship
1Health Care Futures LP, Edina, Minn., USA. hcfcraig@aol.com
MGMA Connexion
|March 10, 2007
Summary
Group practice administrators must carefully and indirectly manage physician productivity to ensure financial success. This is crucial because physician output directly impacts practice income, regardless of administrative efficiency.
Area of Science:
- Healthcare Administration
- Medical Group Management
- Physician Productivity
Background:
- Physician productivity is a critical determinant of group practice financial performance.
- Administrative efficiency in managing reimbursement and overhead is insufficient if physician output is low.
- Physicians may undervalue the link between their compensation and productivity levels.
Purpose of the Study:
- To explore how group practice administrators manage physician production levels.
- To address the challenge of physicians undervaluing the relationship between compensation and productivity.
Main Methods:
- Qualitative analysis of administrative strategies.
- Exploration of indirect management techniques.
Main Results:
- Administrative performance alone cannot guarantee expected income.
- Physician productivity must meet specific thresholds for financial success.
Conclusions:
- Group practice administrators manage physician productivity carefully and indirectly.
- Effective management requires addressing physicians' perceptions of compensation-productivity links.
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