Practice Management Series

2004 - 2005

ASCOClinical Practice

Series

Practice Management Curriculum

1. Adapting to Changes in Medicare

2. Generating Practice Efficiencies

3. Organizing for Service Expansion

Generating Practice Efficiencies

Streamlining work flowIncreasing patient flow per physicianMaximizing charge captureManaging expensive inventoriesLowering cost

Who should attend

Physician Leader of the Practice President of the PA, Founder

Practice Administrator CEO, Executive Director, COO

Contracting Officer Contract Administrator, Director of Billing

Clinical Manager Medical Director, Nursing Team Leader

After this session, you will be able to:

Understand the need for assessment and benchmarking.Perform a simple assessment to identify areas where cost savings may be found.Develop plans to implement beneficial changes based on this assessment.Describe cost savings and efficiency techniques to assist your practice as reimbursement changes.

Efficiency:

Ability to produce the desired effect with a minimum of effort, expense or waste

Webster’s New Twentieth Century Dictionary, Unabridged

Why is efficiency important?

The oncology world has changed….

…life as you know it is over

Medicare Prescription Drug Improvement and Modernization Act (MMA) 2003

Why us?

It’s not personal!Medicine is being impacted just like every other industry in our economyIt’s all about…

↑ quality

↓ cost

The Old DaysMedian Per FTE Medical Oncologist

Compiled from MGMA Cost Survey through 2004 Report on 2003 Data. 2004 trending by third order polynomial by Oncology Metrics, LP

R2 = 0.989

R2 = 0.9902

R2 = 0.9208

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Thousands

Total Medical Revenue Total Operating Costs Rev. After Operating Costs

MMA ImpactPer Oncologist with projections by Oncology Metrics

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

2000 2002 2003 2004 2005

Drug Cost Drug Revenue Drug Marginal Revenue

ThenNow

Practice Efficiency:Focus on Largest Expenses First

AOHA/MGMA 2003 Report on 2002 Data

Set Your Priorities

1. Drug Management 2. Physician Efficiency 3. Staffing

BenchmarkingWhy?

Benchmark your practice metrics to discover potential work flow and/or staffing efficiencies

Lower the cost of practice operations Better inventory control Improved patient scheduling Streamlined work flow from clinic to

billing office

BenchmarkingHow?

Informal – conversations, visits with colleagues, oncology practice list serves

More formal – use a standard such as MGMA’s Cost Survey for Hematology Oncology Practices

Most important to benchmark against yourself over time

COGS BenchmarkingUsing the MGMA AOHA Hematology/Oncology Cost Survey: 2003 Report Based on 2002

Data

Table 1.8b2003 Report Based on 2002 Data

Per FTE Physician

Count Mean 25th Median 75th 90th

Total Chemo Med Surg. Costs 45

$1,133,798

$ 751,859

$ 1,053,518

$ 1,387,087

$ 2,165,165

#1 Cost

COGS BenchmarkingUsing the MGMA AOHA Hematology/Oncology Cost Survey: 2003 Report Based on 2002

Data

1. Write down your COGS for 20042. Divide it by $1,250,000 (2004 trend based

on 2002 data from MGMA/AOHA survey; median COGS per physician)

3. Result is the number of physicians that your COGS would support

4. Compare this to actual physicians and if it is much higher or lower, keep asking why

#1 Cost

Drug ManagementDrug procurement and inventory management processes must be tight Contracting Ordering Shrinkage Inventory management Monthly reports - compare inventory levels to

billed units Who is managing this process for your

practice?

#1 Cost

Drug Management

Look at how you add new drugs to your practice formulary to assure financial feasibility

Practice standardization, pharmaco-economics review Start simple - hydration, anti-emetics Then look at treatment protocols by disease,

one disease at a time Knowledge is power, you can’t control what you

don’t measure

#1 Cost

Drug ManagementPharmacy safety OSHA fines are expensive

Nursing policies Errors are expensive – charge capture

errors, chemo preparation errors

Who is mixing your drugs? Recent articles indicate ~50% nurses, 50%

pharmacists Dependent on practice size, state regulations

#1 Cost

Drug Management – Looking Ahead

In 2006, CMS is proposing a Competitive Acquisition Program (CAP) for drugsProviders will choose between CAP and ASP + 6%Do you understand your pharmacy costs? Are you managing inventory, controlling

shrinkage, collecting co-pays on drugs?

If you can buy drugs at or below ASP…and you can collect all of your co-pays…can you run your pharmacy on 6%? Know your costs - get ready for 2006

Physician Productivity Benchmarking Using the MGMA AOHA Hematology/Oncology Cost Survey: 2003 Report Based on 2002

Data

Table 1.8b2003 Report Based on 2002 Data

Per FTE Physician

Count Mean 25th Median 75th 90th

Consultations & New Patients 39 308 185 231 345 442

#2 Cost

Physician Productivity Benchmarking Using the MGMA AOHA Hematology/Oncology Cost Survey: 2003 Report Based on 2002

Data

• Write down the number of consultations and new patients (99241-99255, 99201–99205) in 2004

• Divide it by 231, the survey median of consultations per physician in 2002

• Result is the number of physicians that your new patient service volume would support

• Are you above or below the actual number of physicians in your practice?

• Why?

#2 Cost

Relative Benchmarks1. New Patients and COGS are both greater

than the actual number of physicians and yielding about the same physician count Indicates good physician utilization and

pharmacy control

2. New Patients about right but COGS shows higher number of physicians Indicates potential savings for COGS

management

Increasing Patient FlowPhysicians Should…

Communicate with referring physicians – this drives practice growthSee new patients – this drives practice growthBe seen at the hospital, participate in medical staff lifeSee follow-up patients on a regular, clinically appropriate basisDelegate some follow-up visits to other providers as appropriate – PA, NP, RNEnsure quality of care throughout practice

#2 Cost

Increasing Patient FlowPhysicians Should Not…

Routinely be late for clinicSpend time filling out forms (ex. disability, tumor registry)Provide routine patient educationReturn routine patient phone calls (prescription refills, etc.)Micro-manage staffUndermine authority of administrator

#2 Cost

Increasing Patient FlowAdministrators Should…

Assure that there are adequate exam rooms for each physicianProvide appropriate patient scheduling, individualized by physician if necessaryUse other staff, clinical and administrative, to free up physician time whenever possible

#2 Cost

Increasing Patient FlowAdministrators Should Not…

Practice medicine or offer their clinical opinion to anyone, ever!Undermine the clinical authority of any of the practice physiciansUndermine the business and leadership authority of the physician leader

#2 Cost

Increasing Patient Flow Should you consider a Non-Physician

Practitioner?

Also known as “mid-level providers,” includes PA, NP, CNSIncrease patient volume at less expense than adding a physicianAllow more flexibility in scheduling patient visits, more consistent schedule than physiciansGenerate revenue for practice even if physician is out of officeCoverage for physician vacations – better continuity of care

#2 Cost

Increasing Patient Flow Non-physician Practitioners Should…

Work as an adjunct to the physiciansSee routine follow-up patients, chemotherapy visits, other routine visitsAllow physicians to see more new patients, consultationsServe as a resource for nurses, other staff

#2 Cost

Increasing Patient Flow Non-physician Practitioners Should

Not...See new patientsPractice beyond their state scope of practice

#2 Cost

Practice EfficiencyStaffing#3 Cost

Ensure that you are using all staff in the most appropriate way for the size of your practiceManage your overtimeTask Analysis

Who does it? Can anyone else do it? How do they do it? Can it be done better?

Practice EfficiencyNurses Should…

Administer chemotherapy – patient assessment, check doses, discuss side effects, mix chemo in many practicesCounsel patients – symptom relief, social issuesPhone triage - answer patient’s symptom-related phone callsPatient educationHelp with drug assistance programs and indigent drug forms

#3 Cost

Practice EfficiencyNurses Should Not…

File Schedule appointments Handle pre-certs, pre-auths

#3 Cost

Practice EfficiencyPatient Flow

How do your patients get from waiting room to exam room?Who checks vital signs, preps patients for their visit?Who assists the physician with exams?Who gives injections?Does it have to be a nurse?

#3 Cost

Practice EfficiencyChart flow

Can you find a chart when you need it?How does it get from file to desk or file to exam room?Who gets it there?Do you have a policy on charts leaving the office? How long (and how many staff) does it take to find a chart that is MIA?

#3 Cost

Other Efficiency Opportunities

Billing is important Review your billing processes – is charge

capture fast and accurate? How quickly are your charges sent to

insurance? Is your charge ticket updated every year?

Are all new codes included? Make sure all of your staff is trained on

billing and coding changes as they occur Are you billing for the demonstration project

for every eligible patient?

Other Efficiency Opportunities

Collecting is important too! Financial Counseling

Identify patients with no insurance, poor insurance

Identify patients with no 2nd insurance Refer patients to appropriate resources -

sources for 2nd insurance, Medicaid if appropriate

Inform the physician and nurse of insurance issues as soon as they are identified

Other Efficiency Opportunities

Purchasing Chemotherapy Drugs – shop

wholesalers Medical supplies – put out to aggressive

bidding process Office supplies – who’s in charge?

Don’t let the little things add up

Other Efficiency Opportunities

Information Systems Practice management system Network administration Software and hardware support Clinical Management Systems –

LIS, CPOE, EMR

Efficiency:

Ability to produce the desired effect with a minimum of effort, expense or waste

Webster’s New Twentieth Century Dictionary, Unabridged