Posts tagged with SOAPM

I have a backup of pediatric benchmarks (a really cool location-adjusted revenue one is coming), but some items I have to get out of my queue:

• A WSJ view of a program being put together by some major employers (Bridges to Excellence) to promote the use of the medical home.  Skipping the middle-man (known as the insurance companies), why not pay physicians part of the savings from keeping employees healthy?  The faster we move away from health-insurance-as-a-means-of-cash-flow-management, the better.  One of our clients in Maryland used this program to pay for their EHR two years ago...
• UHC has extended its relationship with Epocrates.  I had head from some clients how "typical" it was of UHC for it to cancel the relationship with the popular hand-held drug reference, it's good to see that it has done the smart thing.  Note that SOAPM, PPAAC, and, particular, Dr. Anne Francis were instrumental in getting this to happen.  Good work.  I don't understand what the down-side is to UHC, afterall.

I have had the distinct pleasure and honor to be allowed a few moments in the most recent issue of the SOAPM newsletter. I believe they will have it on-line for their members any-moment-now, but I do know that the printed version has gone out, as I have already received three phone calls about it. The article addresses some of the myths of merging practices and is similar to something I wrote here a while ago.

The most interesting call came from what is perhaps the largest single pediatric practice in the country. As you can imagine, even through their trials and tribulations, they are proponents of the benefits of large practices. After a few minutes of discussion, though, the caller realized that we are, in fact, in perfect agreement: the fundamental benefit of a large practice should be clinical. If the primary reason for a practice merger has to do with fighting the insurance companies, look out! The money follows the care.

Note: there are 11 other pages of really great pediatric practice management content in the rest of the SOAPM newsletter. If you're not a SOAPM member already, why not?

You can see the PDF of the individual article here and the text is below.

The Myths and Misunderstandings of Growing Practices

By Chip Hart

SOAPM News, Spring 2008

Organizing pediatricians through the growth and merger of existing practices has been the hot topic in the pediatric world over the last 2 years. As pediatricians begin to understand how poorly they are paid relative to other specialties, the movement to “fight back” and find that strength in numbers is a natural instinct.

Unfortunately, we at Physician’s Computer Company (PCC) are often witnesses to statements about the benefits of becoming a larger group that are demonstrably false and potentially harmful to the well-intentioned physician. Physician’s Computer Company has worked with dozens of pediatricians over the last 25 years who have crossed the bridge into an organized or merged-practice environment, and we would like to share with you their failed, and successful, experiences.

First, let’s be clear that we need to distinguish among the many different methods for becoming part of a larger group. Merging 2 established practices is not at all like forming a practice without walls with 20 other groups, or joining any one of the flavors of a Independent Physician Association. Undoubtedly, you have heard from a peer or read online that one of these methods or another is the “best answer” to fighting the insurance companies. Let me assure you that, for every practice that has succeeded under a large organizational model, PCC has worked with 2 or 3 who have not. Let’s learn from the mistakes and successes of other practices and make our strength in numbers work. It is important to realize that what works for one practice may not work for you. The following are the most common myths we hear about large pediatric groups:

• Merging practices or joining a “supergroup” will deliver substantial overhead savings because of economies of scale.

• Unless you are in a supergroup, you cannot negotiate.

First, the belief in saved expenses from the economies of scale is a surprising one. Didn’t the hospital/practice merger frenzy in the 1990s show us all that there is no leaner organization than a small pediatric practice? How can anyone imagine that becoming part of a more complex organization would actually save enough money on supplies or services to make it worthwhile? If it were true, wouldn’t we hear about it all the time from the hundreds of American Academy of Pediatrics (AAP) members, some of whom are active Section on Administration and Practice Management (SOAPM) members? The Medical Group Management Association reports that, as practices grow in size, their expenses per physician actually increase.We have asked practices after a year in their new supergroups, “So, have you been able to cut the employees you expected? Are your costs down? Are your supplies so much cheaper they offset your other new expenses?” The answer to these questions is, inevitably, “No.” It takes too many miles of cheaper examination table paper to make up for those attorney fees.

Ultimately, with the many pediatric-specific buying groups available to even solo practices, any practice can, and should, freely take advantage of the savings delivered to organizations with thousands of members. If you have not visited these Web sites already, go to www.physall.com, www.pediafed.org, www.mainstreetvacs.com, or one of the other related organizations and ask them to show you how you can get the same prices as the largest group in your region.

One advantage that a larger group does provide, however, is the ability to pay for the professional help that is needed to run a practice. Providers in small practices do spend many late nights going over finances or strategic decisions, when a large practice can employ people who specialize in these matters; and a large group may have the resources to access professional negotiators or business consultants. These advantages are important. Negotiating with insurance companies, however, is hardly the sole territory of large and extra large groups, and rarely requires the resources of an expert negotiator. At PCC, we work with customers across the country who routinely report their success negotiating with payers. Not a week goes by without us hearing from a small practice on Long Island or a busy group in San Francisco about their negotiation successes. The size does not matter—only their willingness to drop payers who do not meet their expectations. On the SOAPM list, a handful of members have provided examples of successful negotiation without the benefit of being in a supergroup.

At least 5 or 6 times a year, we hear from offices who are approached by supergroups only to learn that the promised rates of the new groups are no better (and sometimes worse) than rates they have already negotiated on their own! In the middle of writing this piece, we have heard from 2 clients who, with the help of their system reports and a systematic approach, have been wildly successful in renegotiating their contracts. One is a 4-doctor practice, another is a 5-doctor practice, both located in competitive, pediatrician-dense east-coast locations. Hardly “powerhouse” practices, but each somehow will add over $200,000 to their bottom lines in 2008 as a result of negotiating.

So, where does that leave us, especially SOAPM members? In the end, there is one type of practice that benefits from joining a larger group—those who have never negotiated for themselves or treated their businesses professionally. Otherwise, if you are one of the better practices in your area, you will spend more time dragging up the standards of your new partners before you recognize a single financial benefit. If you can run the new, large group, then you will benefit. If you are just one of 20 new partners, you will be carrying their baggage with you.

None of these comments should imply that organizing pediatricians or becoming part of a larger group is a bad thing. It is quite the opposite. Look at the simple example of the purchasing groups and the tens of thousands of dollars they save each physician; or, more importantly, the amazing impact that SOAPM has had in the last 2 years. Section on Administration and Practice Management members should be driving the AAP to set standards for care and reimbursement. Be wary, however, of joining organizations where your participation benefits primarily those at the top of the ladder.

Ultimately, the issue that concerns us most is watching pediatric groups form specifically to “beat the insurance companies.”Without shared clinical goals and components, we have seen many practices wake up 3 or 5 years into a new structure only to regret making the change. If a positive clinical impact is not the primary goal of your new potential group, take a longer look before leaping. The money always follows the care.

I'm busy writing another piece for the SOAPM newsletter and it's really taking up my time. I'm truly honored to be given the opportunity to provide them comment but, whew, it takes a lot of work. That is, it's one thing to ramble on in a blog (this is a good example), but it's a different thing entirely to actually construct a 500-1000 word piece that really needs to be articulate, concise, and compelling. It's certainly a good exercise.

Oh, back to the topic: I know three different offices in different states in the northeast who have recently renegotiated their Aetna contracts with considerable success. It's enough of a convergence that I find it worth mentioning - perhaps it's a good time to give your rep a call. Aetna is on the upswing, take advantage. Negotiating now? Push harder. Considering a conversation? Do it now.

The Fall SOAPM newsletter has been out for a bit and yours truly did a piece on concierge medicine.  I have a fun follow-up  to it, too!  Make sure you join SOAPM - it’s only $30/year - to get the rest of the newsletter…

The State of Pediatric Concierge Medicine

The practice of “concierge medicine” (boutique medicine, direct care, whatever you want to call it) has grown substantially in the last few years. Unsupportable patient volume, managed care payment and administrative challenges, and clinical dissatisfaction have led to literally thousands of physicians getting out of the insurance-dependency loop and into smaller, slower practices. With physician satisfaction at an all-time low, especially in primary care, is it any wonder that pediatricians are looking for better ways to work with their patients? Perhaps the most telling sign of the arrival of concierge medicine is that there are more than a dozen national organizations that exist solely to help doctors through the process of changing practice models (www.choice.md, www.modernmed.com, www.mdvip.com, etc).

Section on Administration and Practice Management (SOAPM) members may not even be aware of how the concept has infiltrated the system. The SOAPM list itself has documented accounts of practices who charge annual “administration fees” to pay for traditionally non-covered services, like school form generation or special phone services. In addition, there are already a handful of successful pediatric concierge practices and they are not limited to affluent suburbs and communities— they exist in places like Pittsburgh and Maine. (See one AAP member’s own account at http://practice.aap.org/content.aspx?aid=2346.)

There are some aspects of the concierge model that seem particularly well-suited to pediatrics. A concierge practice, by definition, provides a medical home with a mutual patient-physician focus on preventive care. However, the difference between the demand for pediatric services in the first years of life and the later years is so large that it makes it difficult to price easily. States without universal coverage also add a significant immunization expense for which someone has to pay. Most of all, though, pediatricians would rather deal with the Devil-They-Know (insurance reimbursement) than give it all up to run a practice the way they envisioned on med school graduation day.

What can we do, then, to capture some of the satisfaction that both patients and physicians in the concierge market experience? There are baby steps, appropriately, that may be the answer. More than one of the professional groups working with concierge practices outlines hybrid- or mixed-models that make the transition to or, more importantly, addition of concierge services quite possible. For the purpose of this discussion, there are 2 types of concierge medicine: fees for non-covered services and fees for care. Let’s discuss the fees for non-covered services first as we consider some of the baby steps.

Fees for Non-Covered Services

As I pointed out earlier, SOAPM list members are already familiar with the first model, as a number of you are already doing it. (Did you realize that you are a concierge practice?!) For those of you who do not yet package services like form completion or medication refills—and that number grows smaller daily—why not turn what is commonly treated as an unwelcome addition to your overhead as a revenue center? Imagine the never-ending chore of completing school forms, when your office typically does the least possible work, becoming a true clinical opportunity and chance to market your practice. Your competition, remember, is not simply the other pediatricians in town; it is also FedEx, Netflix, Apple, Nordstrom, and any other service-oriented organization.

What kinds of services are being picked up by these nascent concierge practices? On SOAPM, and online, you can find a relatively common list:

• Medication Refills
• Telephone Advice (before or after Office Hours)
• Insurance Claim Management
• Travel Research
• Forms Galore
  • Pre-authorization/Medication Forms
  • School Forms
  • Home Health/Therapy Forms
  • School Excuses
  • Attention-Deficit/Hyperactivity
  • Sports Forms Disorder Questionnaire Forms

There are other, more substantial non-covered services, from house calls to personalized clinical plans, that are already in use by practices around the country. Note that even incredibly modest fees, such as $25 a year per family, add up to enormous potential gains for the practice, which can be used to develop the quality of the service.

The SOAPM population, in particular, should work to provide policies, practical examples, and standards for these types of services. Even without official endorsement, an understanding among leading pediatric practices about the proper ways to serve the patients is immensely effective.

There are 2 challenges to offering non-covered services to patients. First, you must stay abreast of the status of the services—if a payer changes policies and suddenly “covers” one of your procedures (whether it pays for it or not), you have a problem. Second, patients are used to receiving many of these services for free at present. Not only does your communication with them need to convince them of your position, you need to package the services in such a way that the patients feel like they are getting something new and improved. There has been considerable documentation and discussion online about the lessons learned from developing these services that you should consult.

Fees for Care

The “Fee for Care” concierge model is what most people envision when discussing the subject. We all understand the concept, but take a few minutes to do the math that insurance companies don’t want you to do: Use your practice management system to determine your total revenue last year. Divide that figure by your total number of active patients. That is how much, on average, your patients paid you last year. Divide that by 12, and the resulting monthly rate is usually pretty shocking. I have seen as low as $20 but almost never over $50, depending on how you count “active patients.” Think about that: for $50 per patient per month, almost all of you who are reading this piece would actually make more than you did last year.

Of course, this is not a realistic, but it should give you a better sense of why it has been successful in most of the practices who have tried it. What are the options for those practices that cannot jump into the deep end?

One concept for larger practices to consider is to spin off a small concierge group from within the existing group. This is the medical version of the classic “shelf space” marketing concept from the first days of retail consumerism. Rather than have a local concierge group to open on its own practice down the block, perhaps you should be the ones to do it. Take 1 or 2 of the slowest/most thorough/patient friendly docs you have and put him or her/them in an environment where his or her/their volume is not critical. Share your existing resources to shore up the practice in the crucial early period and treat it as an additional option you can offer to your patients, especially those on plans with which you do not participate. By giving your patients a choice to see your practice in the manner that suits them best, you expand your opportunity to reach into the community and grow your practice in a healthy manner.

Should you consider this hybrid approach (or any of the others, for that matter) make sure you do not give the impression of having 2 “tiers” of care in your practice. One way to avoid this is to not have an individual physician work on “both sides of the fence” and be in a position of having a concierge patient jump to the front of the line, ahead of the non-concierge patients.

Finally, as with any endeavor of this nature, you need to consider the legal ramifications. Pediatricians in California, for example, have to contend with the Knox-Keene Act (which is designed to protect patients from ill-designed insurance coverage). Start with the national concierge medicine organizations and listen to what they say distinguishes them. Speak to your peers, locally and on the SOAPM e-mail list, and, if nothing else, strongly consider what you need to do to provide the convenience that your patients demand.

As I mention above, I have an extension to this piece from Physician’s Practice magazine.

After receiving my third invite to a $450 "Learn What the ARRA Funding Will Do For You" seminar this week, I've decided to run a piece I wrote for the SOAPM newsletter that was released a few weeks ago.  Of course, you can become a SOAPM member and get these messages (and better/more!) a lot sooner - $30 a year.  Do it.

The American Recovery and Reinvestment Act of 2009 and Pediatricians

By the time this article is published, I will have undoubtedly received three or four dozen requests for information about the “free stimulus money” from the present federal administration.  I am dismayed by the glassy-eyed, wishful looks and expectant tones I hear in these questions, knowing that my response is likely to disappoint most people.  Especially anyone who took Microeconomics 101.

Let's review the offer - the Obama administration's American Recovery and Reinvestment Act of 2009 provides the first ever federal incentives to invest in health information technology (HIT), specifically EHRs.  If your practice invests in a "certified" EHR and shows "meaningful use" of the product, you might be paid!  [Note that, at the time of this writing, neither previous quoted phrase is defined and many industry folks see significant problems with both potential definitions.]  This promise of money has already driven practices I know to bizarre - but expected - behaviors.  Although having the federal government focus on the promotion of HIT is a good thing and it's quite possible that the stimulus money will benefit you and your practice, on the whole it will do little more than more tax payer dollars from your hands and into the owners of the (large) EHR companies.

The problems are many.  First, to qualify as a pediatrician, at least 20% of your patients must be covered by Medicaid.  For many of you, getting to that number eliminates any "bonus" you might get.  Especially when you consider that pediatricians only receive 2/3s of the posted benefits that everyone else receives.  That's right - somehow pediatricians need less money to computerize their records.  It must be that high margin and low volume in all the practices I work with (note the sarcasm, please).

Maybe you're already at 20%  Medicaid or higher.  Maybe you already have your eye on a certified vendor who really understands your pediatric needs.  And maybe you trust your state Medicaid program to distribute the money to you once they get it.  That's all swell.

But it's still not going to save you any money.  Why not?   Think back to Microeconomics 101 and what you learned about  the effect on a market when there is a known subsidy.  Although there are many variables to consider (the elasticity of demand, whether the subsidy is given to the purchasers or producers, etc.), don't you know what will happen in the EHR world?  When the EHR companies know that you will qualify for $40,000 of subsidy money over 5 years, what will happen to the price?  Isn't it more likely that the price pressure will be, in fact, negative?  Will you also follow the lesson learned a million times a day in retail stores that your "rebate" will actually drive you to purchase more than you need?

I believe that this distortion to the market is not going to improve the quality of care in this country at all.  And the race to find a certified EHR is going to find many pediatric offices purchasing inappropriate systems, given the paucity of pediatric understanding among them.  And I am particularly afraid that this subsidy program will mimic the results of agricultural subsidies here in the United States, where the top 1% of recipients receive over 30% of the subsidies - the analog of which is that the hospital-focused EHRs are only going to become more dominant and your experience in the private practice world will become less relevant to them.

Here's what really gets me, though - the average pediatrician generates about a half million dollars in revenue every year.  Some generate much more than that.  The amount of money, at most, a pediatrician might receive from this program is...less than 2% of that?   For most of you, that's a little more than additional well visit every week.  Think about that!  Squeeze in 2 extra well visits every week, and you can have your own stimulus!

Ask anyone who has purchased or sells an EHR  and he or she  will agree: purchasing the right EHR for your practice at the right time is worth far more than the money being offered in the stimulus package.  If your practice isn't ready or you choose the wrong EHR, it will cost you much, much more.

My advice?  If you find the right EHR for you - one that doesn't zap your productivity, one that you're comfortable using, one that understands your pediatric needs - then get it.  Don't even think about the stimulus.  As those among us who have already purchased their right system for themselves will tell you, it'll be worth every penny – just as the wrong one isn't worth it at ½ the cost.

==> Read Newer Articles about Meaningful Use at pedsource.com/ehrmoney