April 15, 2014
The True Financial Driver: The Provider to Patient Ratio

Without a doubt the single biggest driver of cost in the emergency department is the provider to patient (PP) ratio. While understanding the subtitles of the PP ratio can be difficult, having proper knowledge of the PP ratio while creating staffing models can be the key to understanding your ED groups cost per patient.  This cost will result in your group being budget positive or negative.

What is the Provider to Patient ratio?

The PP ratio is essentially the number of patients that physicians are able to see per hour (PPH) during the course of an average day. For example a PPH of 1.5 is considered decent, but in modern medicine is unacceptable.  An acceptable PPH is 2.0, and that is actually on the low end of what the American College of Emergency Physicians (ACEP) recommends for an ideal PP ratio.

Why the PP ratio is the true financial driver for an ED breaks down to a fairly straight forward numbers game. For example, let’s take your average physician in the United States who earns about $200 per hour. If that emergency physician is able to see 2 PPH rather than 1.5 PPH, your ED will not require as many physician hours to staff the current volume.  Seems pretty simple right.

The secret of a better PP ratio

The PP ratio is something that you need to be paying attention to on a monthly basis and even more if you have large seasonal fluxes.  And especially if you are new medical director or an old one resistant to change and hope to overcome the paradigm shift that is taking place in the American health care system this year.  Your staffing schedule is no longer something you can create and walk away.

Another common theme is adjusting your PP ratio after EHR go live.  If for example your pre-EHR PPH was 2.0 then dropped to 1.5, it’s because 70% of your providers time is now centered on data entry rather than medical decision making.  This can be a costly problem that could generate a response of adding additional physician or PA/NP hours. But who has that extra revenue?

One of the biggest reasons you will receive resistance by changing to a higher ratio is the obvious, your physicians will be busier and with increased patient demand you may have disgruntled employees on your hands.  But if your group is losing money and opposition continues, everyone will become vulnerable and soon could be out of a job.  One option is to implement a medical scribe program, which can handle all of the ancillary duties and EHR management during patient encounters. This will allow the provider to patient ratio to be much higher but feel like it is less.

Let’s take a look at an example to illustrate the point:

A tale of two hospitals

Here we have two hospitals each with the same annual ED volumes, and payer mix percentage:

Hospital A

  • 55k ED volume

  • 70% payer mix

  • P/P ratio is 1.5

  • $200 physician

  • $75 MLP

  • 60 Physician Hours

  • 40 MLP Hours

  • No scribe hours

Budget Negative

Hospital B

  • 55k ED volume

  • 70% payer mix

  • P/P ratio is 2.0

  • $200 physician

  • $75 MLP

  • 40 Doc hours

  • 30 MLP hours

  • 40 scribe hours

Budget Positive $1,032,950

Both hospitals in this example are nearly identical. Except for two things, the PP ratio and implementation of a medical scribe program. By putting in place a medical scribe program, Hospital B is able to run more efficiently, thus increasing their PP ratio.

Whereas Hospital A did spend more of their day entering patient data and maintaining EHRs. Thus they are not able to see more patient per hour. That slack needs to be picked up by another physician who is likely to be just as equally burdened with EHR management, and continue this money losing cycle.