How PinnacleHealth System cut its physician group's losses without spending a ton of money

Doctors talking
PinnacleHealth Medical Group increased the number of patients it sees and improved quality. (Getty/wmiami)

With its medical group operating at a significant loss, PinnacleHealth System took a look at ways to improve care quality and reduce costs without significant financial investment.

In 2014, the Pennsylvania-based system was losing $93,000 for every full-time-equivalent provider in the group, according to a blog post from NEJM Catalyst. So the system's CEO, Michael Young, tapped the group's former president Timothy Crowley, M.D., who is now senior vice president for network development at Steward Health Care, and PinnacleHealth Medical Group's current president, Robert Nielson, M.D., to re-examine its provider contracts and care approaches with the goal of reducing that subsidy to $50,000. 

For starters, the pair write in the NEJM post, employment contracts weren't being enforced; physicians were contracted for 36 hours a week, but just 59% of that time was spent on patient care. The clinics also didn't offer extended hours or weekend time. As part of the overhaul, the medical group shifted scheduling responsibility to office managers, extended hours and took walk-ins. Physician time spent with patients increased to 95%. 

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Crowley and Nielson also found that many patients were not getting key preventive care screenings. They identified gaps using the electronic health record and had other clinicians assist in wellness, according to the post. 

As a result of the changes, the $93,000 loss was eliminated by the fourth quarter of 2016 and quality scores improved. And the medical group's patient roster increased by more than 50%. 

As of mid-2015, a quarter of physician practices were owned by hospitals. Hospitals acquired 31,000 practices between 2012 and 2015. Though that shift may ease some of the pressure on formerly independent practices, it may not be a boon for the health system overall. It can also impact how patients pay for care.

2016 marked a turning point for physicians owning their own practices; a study from the American Medical Association found that as of last year, physician-owned practices were no longer the majority. Hospital employment leveled off last year, however, according to the study. 

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