VHA Physician Strategies & Services Downstream Analyzer Helps Hospitals Measure and Improve Practice Financial Performance

IRVING, Texas, Sept. 3, 2013 /PRNewswire/ -- VHA Inc., the national health care network, has added a new Physician Downstream Analyzer solution to its Physician Strategies and Services consulting offerings to help member hospitals improve revenue and profitability of acquired physician practices. The comprehensive solution combines a downstream analysis technology tool and advisory and consulting services to help hospitals accurately measure physicians' longitudinal (cross continuum) revenue and profitability impact, identify opportunities for improvement; and develop and implement changes to improve physician-hospital alignment.

Many health systems have sought to grow and adapt to new value-based delivery models like accountable care organizations (ACOs) by acquiring physician practices. However, instead of improving financial performance, the strategy often creates financial losses of approximately $150,000 to $250,000 per year over the first three years of employing each new physician.i One of the challenges to improving physician financial performance is the lack of a good analytical tool to measure the true impact a physician has on revenue and profitability in the health system, including acute and post-acute settings.

"Many hospitals endure operating losses after acquiring a physician practice based on the assumption that the physician downstream revenue can make up for the direct losses," said Don Hicks, vice president, VHA Physician Strategies and Services. "Using the Downstream Analyzer, along with VHA advisory and consulting services, the guessing game turns into precise revenue tracking and forecasting using evidence-based analytics."  

The Downstream Analyzer, a Web-based solution developed by Equation Consulting, integrates hospital and physician office billing data at a patient level to construct an accurate and comprehensive longitudinal analysis of physician utilization, revenue and profit. Through VHA's agreement with Equation, members gain access to a tool that is low-cost yet flexible to fit customers' needs, giving them the accurate data to inform physician acquisition, alignment and performance management initiatives.

"We've made it simple to consolidate and filter inpatient, outpatient and physician data quickly to find the answers decision-makers need within their hospital, like being able to identify that a cardiology department generates $6 of revenue for every $1 that it bills or that 25 percent of all hospital referrals are coming from one physician," said Howard Salmon, principal, Equation. "As more and more hospitals look to address physician integration and control costs, this technology combined with VHA consulting services gives health care providers the capability they need to ensure a successful strategy."

VHA Physician Strategies and Services provides a proven and trusted methodology that can be implemented in just 60 days and delivers reliable results that empower hospitals and practice managers with a more complete picture of the cross-continuum value of employed physicians. More information about the solution is available online.

About VHA:
VHA Inc., based in Irving, Texas, is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance, and identify and implement best practices to improve operational efficiency and clinical outcomes.  Since 1977, VHA has leveraged its expertise in analytics, contracting, consulting and networks to help members achieve their operational, clinical and financial objectives. In 2012, VHA delivered record savings and value of $1.9 billion to members. VHA serves more than 1,350 hospitals and more than 72,000 non-acute care providers nationwide, coordinating delivery of its programs and services through its 13 regional offices. VHA has been ranked as one of the best places to work in health care by Modern Healthcare since the publication introduced this list in 2008.

About Equation:
Equation provides the analytical support that allows healthcare executives to make empirically rooted business decisions. Equation is unique in that it leaves nothing to chance. Its scientific approach leverages a proprietary, data driven methodology to improve physician economics within hospital, private or academic settings. With a suite of analytical tools and proven operational success, Equation provides clarity, direction and measurable results where ambiguity typically thrives. The rapidly growing firm is headquartered in Salt Lake City, UT.

i Hospitals' Race to Employ Physicians — The Logic behind a Money-Losing Proposition. Robert Kocher, M.D., and Nikhil R. Sahni, B.S. N Engl J Med 2011; 364:1790-1793, May 12, 2011DOI: 10.1056/NEJMp1101959