Hospitals and Physician Practices Still Aren?t Utilizing Their APPs Fully. Why Not?

Thursday, October 5, 2017 | Larry Sobal

Hospitals and Physician Practices Still Aren?t Utilizing Their APPs Fully. Why Not?


I read a recent news release about a health system’s plans to lay off 300 workers. Sadly, this type of downsizing is all too common these days. But what caught my attention was the mention that 40 of those positions will come from the hospital’s nurse practitioners and physician assistants. 

I admit that I don’t know any of the specifics about this health system’s decision, but two thoughts came to mind. First, it’s unusual to see downsizing that involves the elimination of providers. Second, and more concerning, is the fact that my MedAxiom colleagues and I regularly see hospitals and physician practices underutilizing and misusing Advance Practice Providers (i.e. NPs and PAs). In fact, we routinely see APPs as where your heart program is leaving big money on the table.

Could it be that this was a case where the potential value of APPs was never realized? For further insight, I turned to my colleague Ginger Biesbrock, MedAxiom’s resident APP expert and a long-practicing Physician Assistant. I’ve read her articles and listened to Ginger speak on to how to create a profitable APP model and the optimization of APPs, and couldn’t help wonder if this organization in the news had failed to do either or both.

So, this week I am tapping into Ginger’s expertise to help us understand how team-based care can advance the Quadruple Aim of health care.

Ginger, in my experience working with hospitals and physician practices, it seems almost everyone is struggling to understand how to best utilize APPs in both inpatient and ambulatory settings. Why is this?

In some cases, there has been a lack of understanding of the scope of practice—the abilities of this provider team. Our scope of practice lives at the state licensure level and there is significant variation between states, creating a level of complexity. In other cases, we have found a very distinct conflict of interest between effective utilization and physician compensation models. This conflict creates a competitive environment between the physician team and the APP team. And finally, there are times when the employment alignment does not exist to allow for effective billing/charge capture practices. Many programs are leaving a significant amount of money on the table for the services rendered by this valuable team.

What should organizations expect regarding the financial value of APPs—should they be positive financial contributors or incurring a negative ROI?

It saddens me when I hear examples of a negative operation margin. By definition, the APP team is a team of providers and the majority of our work should be reimbursable services. When members of this team work to the top of their license in an aligned team-based environment where their capacity is maximized, there should be a minimum of 200% ROI on the APP costs. This means that an individual APP has the capacity to contribute in revenue twice his or her cost on the expense side. There are examples of high-touch, high-resource type chronic disease management programs, such as HF where the patient volumes are lower, in which this may not be the case. However, these types of programs come with a significant cost avoidance strategy, which should remain a positive financial contribution to the organization.

With a team-based model through a shared care environment between physicians and APPs, there is an opportunity to increase a physician panel size by 50%-75%.

There have been many concerns expressed about the aging cardiologist workforce. MedAxiom's 2017 Cardiovascular Provider Compensation & Production Survey revealed that 45 percent of American cardiologists are 56 or older and 20 percent are 61 or older. How do you see APPs fitting into future workforce planning?

First of all, I do not see APPs as a ‘replacement’ for physicians in our CV programs. But I do see a high-functioning team-based care model having the ability to expand our physician resources to the extent that if/when a program needs to replace a retiring physician, they should evaluate their true need and current physician capacity. I work with many organizations related to patient panel support and access; and I do believe that with a team-based model through a shared care environment between physicians and APPs, there is an opportunity to increase a physician panel size by 50%-75%. So if your physician recruitment decision is based solely on access, there may be an opportunity to build a stronger team-based care model that will effectively increase a program’s access without adding more physician resources. If your recruitment plan is to build programs, add procedures, or increase call pool, then a physician is who you should be hiring.

I sometimes hear physicians say they are hesitant to adopt utilization of APPs due to patient and/or referring physician reluctance to have their patient seen by an APP – is that a valid issue?

In a controlled, team-based care model where established patient management is shared between the physician and APP, this is not a valid issue. Most patients will welcome an “every other visit model” as long as they know they have access to their physician when needed, that the physician is still involved in their care and that the physician sets the expectation with the patient about how their future visits will involve an APP. Same holds true for referring physicians. I almost always have referring physicians say to me that as long as we can guarantee that their new patients will be seen in a timely fashion and their patients’ urgent needs are managed effectively, they are very supportive of the team-based model. It cannot however, be a ‘bait and switch’ approach. All parties need to know which provider will be seeing them and when. Most last-minute changes are also well accepted if permission is asked and expectations are managed. It really comes down to the patient expectation and educating them on the power of a team-based care model. It starts with the physician on the team being supportive of the model and communicating that to his/her patients and referring physicians.

You’re a strong advocate for team-based care. Can you elaborate on what you mean by that and the role of APPs in the concept?

I believe that a strong, team-based care model can and should provide better care than our traditional models. What I mean by that is through having a team strategy, access to care for patients should be better, collaboration/communication should be better, and since we all bring something a bit different to the table, our approach to patient care should be better. A team-based care strategy is one where we have defined ‘who does what’ based on the patient population that we are managing together. We develop a team-based delivery model that is intended to meet the needs of our patients. If our patients require immediate access, we build an open access clinic model. If our patients need established, longitudinal secondary prevention, we develop schedules and capacity to manage that including continuity and build strong relationships with these patients. If our patients need 24/7 hospital-based support, we develop a team or shared model that will provide our patients with the same level of care regardless of when they are admitted.

I will also add that to build this strategy requires strong leadership and governance, financial alignment, top of licensure utilization, and a positive team-based care culture. Programs that have managed through all of these areas do find themselves with a positive financial contribution, positive patient experience results, and positive provider experience. We also have evaluated the quality in these programs and have found improved quality indicators. Put those four together and we suddenly see positive movement for the entire Quadruple Aim. It’s a win for everyone!

Thank you, Ginger, for sharing your insights. I want to add that there are many examples that support the clinical and financial value of Advanced Practice Providers. According to the 2017 MGMA Cost and Revenue Survey, practices that came out with increased revenues owed it largely to increased APPs and support staff. The analysis shows that practices with a higher APP-to-physician ratio (0.41 or more APPs per full-time equivalent [FTE] physician) earn more in revenue after operating cost than practices with fewer APPs (0.20 or fewer APPs per FTE physician), regardless of specialty. Of course, I also can’t emphasize enough the critical need to have strong revenue cycle processes that provide accurate and effective documentation, coding and billing practices so that you are being appropriately paid for the work performed by APPs.



Illustration: Lee Sauer


Larry SobalLarry Sobal is Executive Vice President and a Senior Consultant at MedAxiom. He has a 35-year background as a senior executive in medical group leadership, hospital leadership and health insurance. Larry consults, writes and presents on topics relevant to transforming physician practices and health systems. His weekly blog post comes out on Thursdays and can be accessed at


Ginger BiesbrockGinger Biesbrock, PA-C, MPH, MPAS, AACC, is Vice President, MedAxiom Consulting. She is a respected executive, provider and teacher with 20+ years of experience in the health care. Before joining MedAxiom Consulting, Ginger was Director of Operations at West Michigan Heart, a 39 Physician practice with 24 mid-level provider. Ginger has been an Advanced Practice Provider for 18 years, working in cardiology, urgent care and internal medicine. She has received greenbelt training in Lean/Six-Sigma. Ginger’s work at MedAxiom Consulting focuses on care team development and optimization with the goal of creating high-functioning work teams.


About the Author
Larry Sobal

Larry Sobal, MBA, MHA, is CEO of a yet-to-be-named cardiology practice which is transitioning from employment to an independent physician group effective January 1, 2019. He has a 37-year background as a senior executive in physician practices, consulting, medical group leadership, hospital leadership and health insurance.

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