An urban teaching hospital operated an inpatient psychiatric unit whose payer mix was disproportionately uninsured. The hospital wished to expand its focus to include other behavioral health services and populations, and improve its financial performance.
We were asked to develop business plans in two areas. The first plan was to implement a private practice model aimed at improving physician retention and diversifying the hospital's payer mix. Under the proposed model, hospital-employed psychiatrists would provide therapy services after their regular hours on a fee-for-service basis. Our assistance included determining the financial performance of the after hours service and recommending an arrangement for physician compensation.
The second business plan involved establishing a psychiatric intensive outpatient program. In this case, we identified the demand within the market; evaluated potential locations; identified Medicare requirements related to documentation, physician oversight and reimbursement; created a staffing model; estimated start-up and operating costs; and developed a profit and loss statement.
