Non-physician providers: An unexpected route to revenue increases

The United States is facing a severe shortage of physicians, and that shortage is growing. But it is no secret that hospitals and other healthcare facilities are helping to offset that shortage with non-physician providers.

According to recent research from the Medical Group Management Association (MGMA), the number of full-time non-physician providers (NPP) per physician has increased by 11 percent since 2008.

This increased dependence on non-physician providers raises important questions for hiring managers at healthcare organizations. How to best utilize non-physician providers? Which roles are ideal – e.g., nurse practitioners or PAs? And what are the financial and operational benefits?

Defining NPPs
Non-physician providers can come from a variety of clinical disciplines and have a range of job titles. They may monitor diabetic patients at home, visit cancer patients between oncologist appointments, set bones in the ED or suture wounds for the physician after surgery.

“Some – such as certified registered nurse anesthetists, physician assistants or surgeon’s assistants [first assists] – function under the direct supervision of a physician. Others may work more independently, such as nurse practitioners, optometrists and physical therapists,” explains the MGMA report Non-physician Provider Utilization in the Future of U.S. Healthcare. “All NPPs can bill insurers for their services, either incidental to the care provided by an overseeing physician or as independent practitioners when permitted by their state licensure.”

But the two most common roles are those of physician assistant and nurse practitioner, and increasingly they are the primary face of medicine to a growing patient population.

Most often working in teams with a physician and other support staff, these NPPs can extend the reach of the physician, enhance revenue for the organization, and – ideally – increase patient satisfaction.

Cost and quality

One of the most suggestive findings of the MGMA study is that medical practices that hire or develop non-physician provider roles tend to perform better financially.

That isn’t a fluke. As far back as 2004 the MGMA compiled data which revealed that “except for family practice, physicians in the single specialties studied had higher compensation when their practices had NPPs. Eight years later, the MGMA Data Dive 2013: Physician Compensation and Production Module shows physician compensation is still higher for practices with NPPs, including those in family medicine.”

But the most important measure in healthcare is quality of care. This is where non-physician providers can be a godsend, according to David Taylor, vice president of regional services at CoxHealth in Springfield, Mo.

While some healthcare organizations are drawn to an NPP hiring model for perceived savings, Taylor said that increased patient care and provider access are the driving factors at CoxHealth.

“Patients are more likely to be seen [quicker], and [NPPs} probably spend more time with patients,” Cox said.

A number of factors help make NPPs an attractive option for healthcare organizations, Taylor noted. More nurses and PAs are obtaining advanced degrees than ever before, and are therefore better trained. Patients are receptive to spending more time with these NPPs, since they get quicker service and more “face time” with a provider. And physicians enjoy being able to turn over many of the less critical care duties to NPPs.

During his 13 years at CoxHealth, Taylor has seen the number of NPPs at the organization grow from a dozen to over 100. Some of that growth has been due to challenges in finding enough physicians in the market. Some of it is driven by the rural nature of the organization’s outlying clinics, or its Walmart-based clinics.

“We operate 24 federal rural health clinics,” Taylor said, “and this gives us greater flexibility.”

In this respect, CoxHealth is typical of many healthcare organizations today, which operate a variety of care centers. Settings for NPPs can include medical practices of all types; hospitals; emergency departments; urgent-care centers; surgery centers; community health centers; clinics located in retail sites; nurse-managed medical centers; phone triage services; and rural healthcare facilities.

Financial benefits

Don’t under-estimate the financial benefits of using NPPs, noted Laura Palmer, MGMA senior industry analyst.

“Practices with NPPs typically perform better financially, generating higher physician income,” Palmer said. In seven care areas studied by the MGMA, each one had higher levels of compensation when there were NPPs present in the practice.

But even if that weren’t the case, healthcare organizations have no choice but to pursue an NPP strategy. The pool of available physicians is shrinking, and the incoming number of physicians from medical schools isn’t keeping pace with demand. The population of seniors is also increasing, placing greater burdens on the healthcare delivery system. And the Affordable Care Act has created millions of newly insured patients.

Urgent care centers, where walk-in patients can receive ambulatory medical care outside of a hospital emergency room, are an increasingly significant worksite for NPPs. Another major location for NPPs are retail clinics, such as those found at grocery stores or Wal-Mart. In both cases, providers on staff are almost exclusively NPPs.

A balancing act

For healthcare organizations looking to reduce costs, Palmer stresses that hiring NPPs can certainly help. But in the wrong situation, NPPs can mean reduced revenue. For instance, without a fully credentialed physician at a practice, billing rates are reduced, office visits tend to be shorter, and fewer ancillaries and procedures are performed.

Still, NPPs make sense for a variety of functions and reasons. Hiring NPPs enables a practice to see more patients and free up physician to do what only they can. NPPs can generally spend more time with a patient, can increase the depth of the provider-patient relationship and can enhance patient satisfaction.

To get the most effective use of an NPP, the MGMA recommends the following:

• Work with your physicians to determine their needs for these colleagues (within an NPP’s scope of practice) – some physicians may want more collaboration than others;
• Establish benchmarks to measure NPP performance, including productivity, utilization and patient satisfaction;
• Know the optimal number of NPPs for your practice – the right number can increase productivity, lower overhead and boost physician compensation, but too many NPPs per physician can have the opposite effect.

If you take the above steps, you may discover – as did the MGMA report – that NPPs can provide 80 percent or more of services with equal or better patient satisfaction at a lower cost than a physician.