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The Reality of Value-Add

January 22, 2021

As I reflect on the last year, I am still struggling to come to the realization 2020 is over. The year started out as any other year, high hopes, big plans, defined goals…then March hit. Almost overnight, everything changed, for me time stopped. The world faced an unprecedented illness that very few knew anything about. So many were faced with fear, destruction, uncertainty, loss, and understanding what in life is valuable, truly valuable. In business, we ask ourselves this question frequently. Anytime we are faced with making a financial decision, we ask, “What is the ROI? Where is the value? Does this make financial sense?” If the value add is not evident and quantifiable, these decisions become much harder to make.

When starting with Rural Physicians Group, I was tasked with figuring out how to show the value our programs provide to our partners. In theory, this sounds simple however it proved much more difficult than I expected. I started working with a consulting firm who specialized in maximizing revenue for Critical Access Hospitals focusing on appropriate filing and reporting of their cost report. Through this, it became extremely evident that many rural hospitals struggle in finding and recruiting providers to care for their community compelling them to partner with organizations like RPG. We developed a new proforma based on information pulled directly from the hospital’s previously submitted cost report that allows us to establish their cost structure and cost-based versus not cost-based reimbursement. We have also incorporated some industry standard benchmarks to educate potential partners of areas of opportunity. The new model demonstrates the hospital’s current performance from both a net revenue and expense comparison to RPG’s proposed model clearly showing the upside RPG provides. In the case where no upside is palpable, Rural Physicians Group works with the hospital to determine an alternate program that will meet their needs.

This seems pretty straightforward, not difficult at all, you might say, and you are right! From a financial perspective, we have developed a model to easily show the value-add RPG can provide to potential or existing partners. But, when it comes to healthcare, is a financial upside the only value-add important when making these decisions? Of course not! So how do we show the non-tangible value-add? The hundreds of dedicated providers working tirelessly to care for the rural communities across America. Those who treat your mom, your son’s teacher, your pastor, your best friend, your husband, your neighbor, the cashier at the local supermarket, your daughter’s soccer coach, and the list goes on. How do I show that value-add?

Being raised in a small, rural town I can appreciate the lack of healthcare resources. Having to drive 120 miles to be treated for anything serious or specialized is taxing and overwhelming and scary. I would have valued having dedicated, engaged, competent healthcare providers available to me 24 hours a day, 7 days a week, 365 days a year allowing me to be seen in the town where I lived, recovering from the comfort of my own home. Reflecting on 2020, we can all appreciate the need for these types of services and providers, how invaluable it is to have physicians there to care for our loved ones in a time of need, and to reassure us that they got this. As we continue to battle this pandemic, it is my hope that we all can consider, be reminded of, and hold dear to our heart what in this life is valuable, truly valuable!

Sabrina Gibson
CFO, Rural Physicians Group

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