Large Contract Management Groups

By Brett Adams, Marketing Director, EmCare, Inc.

The following is an excerpt from EmPressions, EmCare's quarterly physician newsletter, which addresses frequently asked questions concerning large CMGs.

What defines a large group?
A large group is a relative term used by most people to describe a group that is larger than their own. This name can be given to groups of two, three, or four hospitals or given to groups that have several hundred hospital emergency departments. A large group could be defined as an organization that supplies basic office functions to multiple ED clients and emergency physicians (EPs).

Can you describe how a large group operates?
Large groups offer administrative support to an ED's human resources, legal, compliance, risk management, recruiting and scheduling, billing and collecting, which enables the physicians to focus on patient care and ongoing training and education. Large groups operate in the background, mostly unseen by the local physician group on a daily basis. A successful emergency department operation is a team of professional physicians, led by a good director, who are dedicated to the advancement of EM in their community. This is true no matter who runs the contract.

What are the advantages of working in a large group?
There are many advantages to working with a large group. As mentioned above, the large groups can provide resources at a very high and consistent level, whereas an independent group has to go out and hire these services on their own. Even if independent groups depend on hospitals for these resources, physicians often find limitations regarding quality and availability of options. A large group has the financial and organizational depth to provide a variety of high quality resources tailored to meet the unique needs of physicians. There is the opportunity to benchmark with other emergency departments of similar size. There is the lack of personal financial risk. There is staffing back up, when you need personnel in times of emergency. Some large groups now offer education to their members in all avenues, not only clinical education, but also leadership and management education.

Another increasingly significant plus for a large group is in the area of compliance. As compliance becomes more crucial to EM practitioners, a large group can alleviate much of the burden on individual physicians. With the tightening regulatory environment it seems that a simple coding or billing error can lead to charges of fraud or abuse. A large group helps protect physicians from personal liability and provides the training and support that can prevent such errors.

What are some limitations in working with a large group?
Large groups exist for the purpose of providing management services. If a physician has a desire to be heavily involved in every aspect of practice management, then a large group may not be right for you. However, if you would rather concentrate your efforts on the clinical practice of EM, a large group takes the administrative responsibility off of the physician's shoulders. Because Medical Directors and physicians prefer to operate the emergency department with a local focus, management groups stay in the background providing support for that local focus on clinical services.

One misconception of large groups is that the groups charge hospitals more for their services than they should. In fact, continuing financial constraints on hospitals and heavy competition ensure that large groups maintain moderate margins and charge fairly for their services. In addition, almost 90% of the revenue generated by large groups under a management agreement goes to paying the salaries and benefits for the physicians.

How can joining a large group help advance my career? Large groups allow for greater professional mobility and growth. Physicians can progress from clinicians to managers within the same organization. There is the ability to change jobs from one hospital to another without changing any other significant part of your life, which is easier because you can rely on consistent payroll and benefits.

Originally published in the February/March 2001 issue of EM Resident

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