Improving IDS performance through group practice expense management.

IDSs can turn around an owned group practice's poor financial performance by taking steps to more effectively manage the practice's expenses. The primary areas on which an IDS should focus its expense-management efforts are physician compensation, nonprovider staffing, and facility planning. The physician compensation system, for example, should include incentives for physicians to improve performance and increase productivity, and the size of the nonprovider staff should be adjusted according to patient volumes. Other areas in which changes in strategy may be required include information system investments; budgeting, accounts-payable, and purchasing processes; and corporate allocations of practice revenues to recover practice acquisition costs.