Investments in management staffing and the financial performance of medical groups

Abstract

Recent premium increases imposed by managed care plans raise a serious question about the long-run viability of managed care as a solution for controlling health care costs. The last decade's growth of total expenditures on health care has only been modestly influenced by managed care reimbursement policies. It is clear that other variables, besides reimbursement policies, must be considered in the effort to achieve a fiscally sound health care system. This chapter explores the role of investments in management staffing as a predictor of sound financial performance in medical groups. Investments in management staffing by multispecialty groups surfaced as a consistent predictor of higher gross charges, net revenue and operating margins, and lower operating costs. Investments in management staffing surfaced as a predictor of lower operating costs and higher operating margin for specialty groups. The implications of these findings for practice, theory and research are discussed.

Citation

Smith, H.L., Piland, N.F. and Bullers, W.I. (2000), "Investments in management staffing and the financial performance of medical groups", Advances in Health Care Management (Advances in Health Care Management, Vol. 1), Emerald Group Publishing Limited, Leeds, pp. 251-271. https://doi.org/10.1016/S1474-8231(00)01011-9