The wisdom of forming groups

30th November 2022

Group practices differ from running your own sole practice. So it's important to have the correct group processes and infrastructure in place.

Consultants forming groups is nothing new and has always formed a key component of our client base. But their popularity has grown over the past decade. There are many reasons for this including:

  • Groups’ ability to provide clinical services to the NHS and private sector;
  • Economies of scale that can help reduce costs;
  • Private medical insurers favouring the group model;
  • Super-specialisation and cross referral opportunities within the group; 
  • Brand identity and marketing opportunities; 
  • Patient Recorded Outcome Measures (PROMs) data;
  • Confidence and capacity as a proven referral pathway.

Some specialties such as anaesthetics and radiology naturally favour the group model, especially when they supply clinical services to a private hospital or NHS trust.

Working together

Group structures improve the quality of care provided to the patient by having several consultants working together within the same specialty, yet with each doctor having specific expertise within their own field.

Specialties such as urology often form groups where one consultant urological surgeon may focus on stone removal and another whose subspecialty is uro-oncology.

Groups can also benefit from increased volume, as insurance companies and GPs are more likely to refer patients to them because they know they have capacity and expertise as centres of excellence.

Orthopaedic groups allow a group of surgeons to have a brand identity for treating a wide range of patients, who may require a hand and wrist, shoulder and elbow, hip and knee, spinal or foot and ankle surgery.

Groups can provide many benefits, but many find the medical billing side of the business challenging and unless professionally managed, can quickly run into difficulties. We partner with more than 50 groups across a wide range of specialties and well know the problems that can arise.

Group structures

The simplest group is a virtual model where consultants continue to operate as individual practices under common branding, such as a website. Virtual models can still allow for shared administration costs and still appear unified from a patient perspective.

More formal structures include consultants forming chambers, limited liability partnerships or limited companies.

These group structures often have centralised pooled funds. Some have founding partners and can have various rules around the distribution of funds and the allocation of costs. Some well-established groups require a consultant to hit a revenue target or work for a specified time before their income and cost allocations is equitable to other group members.

Managing volume

Groups often become a victim of their own success. Managing the volume of activity is the single biggest issue that they deal with, and the more successful the group, the bigger this issue becomes.

The administration required for consultants working together is often underestimated. This covers everything from the raising of invoices, to the volume of phone calls and emails that require answering, on top of dealing with private medical insurers, clinics and hospitals.

Often the first job to be set aside is the reconciliation and chasing of invoices. Delays in reconciliation mean that debt and cash flow suffer, because if you don’t know what is outstanding, then it is impossible to raise shortfall invoices in a timely fashion and chase any money owed. This situation can easily escalate, as the busier the group practice becomes, the less time is spent on this function and money owed to the group accumulates.

In some cases, this can result in consultants earning less money than they did before they formed or joined the group, which obviously defeats the point. Even when the group takes steps to remedy the situation, it is often only a short-term fix and the problem recurs.

Bad debt rate

Some group practices have joined us with hundreds of thousands of pounds outstanding and have written off tens of thousands of pounds in bad debt. We achieve an average bad debt rate of less than 0.5% across the firm.

It is not uncommon for busy groups to get behind on the raising of invoices and, as the first stage in the revenue cycle, this leads to delays all down the line. Failure to raise invoices promptly means that problems with invoices are not identified early, which can impact their chances of resolution. This not only makes the practice look unprofessional but can lead to patient dissatisfaction and negatively impact cash flow.

Excess capacity

Groups who employ practice managers and medical secretaries are required to make binary decisions about staffing to facilitate their activity. The organic nature of many groups means that managing their workload can be challenging as new consultants join the group or members leave.

This is a key reason why groups choose to outsource their medical billing and collection, as this provides extra capacity when required. Outsourcing also offers the added benefit of a cost structure linked to received income. An often-overlooked benefit of outsourcing is the improvement to the patient journey because staff are freed up to focus on their customers. And that can lead to an increase in revenue through more referrals and quicker responses to new inquiries.

Find out more about Civica’s Medical Billing and Collection service.

This article was originally produced for Independent Practitioner Today.