AGG Partner Michael Barry joined Max Reiboldt and host Mark Reiboldt for “Coffee with Coker” a podcast series developed by the Coker Group to discuss the “Top 10 Lessons Learned from First-to-Second Generation Transactions.” Max oversees Coker Group’s services and the general operations of the firm, and provides sound financial, strategic and tactical solutions to hospitals, medical practices, health systems, and other healthcare entities through keen analysis and problem solving.
Mr. Barry, Mr. Reiboldt, and Mr. Reiboldt discussed transitioning from a first-to-second generation transaction and industry trends affecting hospital-physician transactions. Throughout their discussion, they touched on the top 10 lessons they have learned from these types of alignment initiatives.
Top 10 Lessons Learned from First-to-Second Generation Transactions
- Physician market share does not mean success, so health systems have become more selective relative to transactions. (PSAs are much more popular now than 3 years ago.)
- Incurring losses in physician transactions may not be offset by downstream revenue (increased site-neutral payments).
- Ensure organization’s productivity and revenue goals are being met. (Fee-For-Service still prevails.)
- Consider infrastructure required to support non-productivity incentives. (Fee-For-Value payments must exist to require such.)
- Gradually begin tapering off productivity goals and replace with alternative incentives. (Mirror reimbursement trends.)
- Tie new incentives to organizational goals, such as cost-savings, quality, etc. and prepare to respond to MACRA/MIPS requirements.
- Begin tying incentives to reimbursement changes, such as shared savings and/or the quality/CPIA/ACI metrics being measured for MIPS.
- Leverage newly prioritized metrics to reap additional reimbursement incentives (i.e., commercial or MIPS increases).
- Continually reassess compensation structures in light of regulatory and industry trends.
- Payment reform is here and real (MACRA); healthcare providers are unable to ignore the value-based reimbursement world.
To listen to the podcast, please click here.