Healthcare Administration Leadership & Management Journal
Finding the Financial Margin Expansion Leverage in the Medical Practice
Physician leaders have an essential role in successfully implementing margin expansion leverage strategies. By the very nature of their unique position within their practice, physician leaders must wear two hats: that of a revenue-producing provider and that of an administrator.
March/April 2023 Vol. 1, No. 1 pp. 17–21 DOI: 10.55834/halmj.6064036896
Abstract
All U.S. medical groups, especially the independents, are under financial pressure from third-party payers, both commercial and governmental. These pressures come in the form of unit price controls, services utilization constraints, and total costs of care oversight, especially for the management of chronic conditions. The only solution to the deterioration of practice operating economics and related financial performance is operating margin expansion strategies—the expansion of the margin that funds the provider compensation pool. Such strategies are available. The principal challenges to margin expansion often are products of entrenched, and frequently intractable, clinical models and related business models, together with facility constraints, and access to investment capital that doesn’t excessively draw down physician compensation.
