The Challenge: Falling Revenue

A private equity firm had recently acquired a network of private healthcare practices. In its few years of ownership, this practice network had expanded significantly – nearly tripling its footprint in the region. Despite spending two years significantly lowering costs by streamlining back-office processes, leveraging increased buying power in vendor management, and reducing administrative needs, the practice consistently displayed a significant downward trend in relative revenue growth over the course of the most recent fiscal year. The other metric which stood out to the ownership was the staggering level of provider (clinician) turnover. The industry average for the same speciality was an already-disruptive 30% over the same period. But this practice was significantly higher at 39%. A relationship between the revenue issue and the turnover was clear. The PE ownership approached Wayforward to conduct an assessment of these practices to identify the root causes of the challenges and make recommendations on corrective action.

Assessment Insights

It was quickly identified from the data that the practice’s turnover was much higher among the more experienced clinicians. This led to a greener staff of providers who needed more support and guidance than tenured staff. The impediments driving turnover stemmed from several rather pronounced internal issues. These included: Ineffective feedback mechanisms, where employee input was often met with defensiveness or dismissal, creating a culture of defeat that stifled open communication about day-to-day operational challenges that reduced efficiency and was steadily increasing non-billable labor hours. Misalignment of functional drivers highlighted a disconnect between leadership’s directives and employee execution, exacerbated by inconsistent and unclear communication. These two issues contributed to an absence of a performance culture because of ambiguity in expectations and accountability, resulting in frustration and demotivation among high performers. Micromanagement over schedules and tasks undermined professional judgment and contributed to burnout of highly competent and experienced staff. Additionally, there was a notable disconnect from patient outcomes that was eroding the practice’s most high-margin case-types, compromising the quality of care and increased patient complaints.

Applied Methods

First steps were extensive, but included a replacement of micromanaged hours and scheduling with clear provider KPIs around billability. Creating clarity and transparency in performance outcomes not only eliminated micromanagement through empowering highly educated clinicians and staff to determine their own best methods in a collaborative manner – but closed the gap in understanding between the PE firm’s growth expectations and the efforts of front line clinical staff. A revamp of the feedback mechanisms in the organization followed. Raising feedback and concerns became a formal, routine practice that would trigger a consistent but autonomous workflow within employee stakeholder groups themselves before being brought to the practice’s leadership. These two pieces contributed significantly to an environment where the team could work on improving more technical aspects of the operation for both staff and the patients themselves.

Following the results of this engagement, the PE firm invited Wayforward to present as Keynote for their annual conference of over 200 practice leaders to disseminate our specific recommendations on retention and how human systems can contribute to sustainable revenue growth.