Bangor Family Physicians Case Study

Executive Summary & Stakeholders Bangor Family Physicians is a partner based medical group practice located in Maine. The practice consists of four family practice physicians, and a medical support staff. The medical support staff is made up of a practice manager, two receptionists, four nurses, two medical assistants, two billing clerks, and a laboratory technician. Additionally, Bangor Family Physicians employs a CPA to assist with taxes and financial advising. The key stakeholders are the four family physician partners, in which each physician holds an equal stake in the practice.

Bangor Family Physicians Reimbursement There are two determinants to reimbursement for Bangor Family
Figure 1. Comparison of Compensation Models Model | Overview | Pros | Cons | Revenue | Rewarded based on revenue generation | - More services - More patients | - Higher costs - Patient selection- Medicaid and Medicare- Overutilization | Net Income | Greater the revenue and the lower the associated costs, the higher the physician is compensated | - Higher productivity and lower cost incentive | - Determination of costs | Base Salary + Productivity | Compensated a base income then compensated based on productivity | Base Salary - Security Revenue - More patients - More revenue Net Income - Higher productivity and lower cost incentive | Base Salary - No quality incentives Revenue - Higher costs - Patient needs- Medicaid and Medicare- Overutilization Net Income - Determination of costs | Multiple Factor Performance | Economic and noneconomic factors | - Future revenue - Delivery of high quality care | - Measuring noneconomic factors - No incentive for revenue- Ethical questions |

Model (1): Revenue Model A revenue model can be related to a “fee-for-service” model, whereas the payer negotiates a certain charge for each type of service with the provider and then physicians are reimbursed for each procedure they perform. The more services (revenue) a physician provides, the more he or she is paid. Strictly compensating based on revenue production assumes that revenues produced by