Five orthopedic and spine practice administrators discuss their strategies for running a successful practice.
1. Keep practice contracts flexible. With today's healthcare environment changing so rapidly, it's important to keep any contracts your practice makes — with the hospital or otherwise — flexible. "Maintain as much flexibility with your practice as possible," says William Stevens, MD, founder of the Center for Spinal Disorders and OSNA member in Phoenix. "The smaller your practice, the more flexibility you need on long term deals, such as lease contracts. Any type of long term contracts should be evaluated carefully because you don't know where you will be over the next few years."
Structure long term contracts so it will be acceptable if you have to make a change, whether due to future hospital alignment or another unforeseen occurrence. Large groups of orthopedic and spine surgeons are less dependent on this flexibility because they have more negotiating power with other entities in healthcare.
"When a practice is acquired by a hospital group, there is often a loss of flexibility in terms of patient referrals and other practice functions," says Dr. Stevens. "In Phoenix, the primary care physicians are selling their practice to the hospital networks and are required to refer within the network, even if they aren't happy with the quality of care from those surgeons. In the end, it really comes down to providing good care and being able to document the quality, which can be used in negotiations with payors and hospitals for options other than direct employment."
2. Create checks and balances for financial issues. The practice's finances must be handled with care and should include checks and balances to make sure all the numbers come out right. Dennis Crandall, MD, founder and medical director of Sonoran Spine Center in Mesa, Ariz., has implemented "safety" or "accountability" protocols in how the office staff handles cash, billing and posting.
"Make sure all of the money issues have redundancy in their processes so that you are comfortable the system is going to work," says Dr. Crandall. "Employees should have a sense that they can't be dishonest and not have it noticed. It will be noticed."
You can create a management team to oversee these issues or design the processes so everyone is accountable for their actions.
3. Invest in information technology. Patients, payors and referring physicians will demand reported outcomes in the future, and the best way to collect this information is through a good healthcare information technology system. These systems should interact with hospitals and other providers so you can stay on the same page.
"Invest in information technology in a way that you can measure and report outcomes, whether to payors or hospital systems, to prove what you are doing," says Todd Albert, MD, spine surgeon and president of Rothman Institute in Philadelphia. "Be able to measure patient satisfaction as well. All these things are publicly reported, so know what they are and be ahead of the curve before your statistics end up in the newspaper."
Once you are able to track your outcomes and define your quality, insurance companies and policy makers will come to you as they create treatment protocols. "You have to prove your method works, not just say it does," says Dr. Albert.
4. Provide patient care coordination. One of the reasons why DISC was able to contract with the U.S. Olympic Team and Red Bull athletes is their ability to provide quick coordinated care. The center has a VIP athlete coordinator to arrange each athlete's care before they arrive at the practice. Many times the athletes are flown in from locations around the country; once they arrive, the coordinator has their appointments with different specialists scheduled so the care is as seamless as possible.
"Our VIP athlete coordinator takes the call from Red Bull America or the Olympic athletes and coordinates their appointments," says Robert S. Bray, MD, a neurological spine surgeon based in Marina del Rey, Calif. "If a BMX Biker for Red Bull North America goes down, they want to call up and have the athlete imaged, diagnosed and treated the next day so they can return to practice as soon as possible. Many times, the treatments aren't surgical and we can provide them the same day. With that kind of concierge sports medicine, we were able to develop our relationships with elite athletes."
5. Explore initiatives to lower the cost of care. One of the biggest efforts of healthcare reform is lowering the cost of care. Stephen Hochschuler, MD, co-founder of Texas Back Institute, is working with his colleagues on several initiatives to lower the cost of care while remaining profitable as an independent spine practice. One of the potential opportunities will be investing in an ambulatory surgery center in the future, which will lower the cost of the minimally invasive procedures performed there and enhance the practice's ancillary revenue stream.
"Our hospital chain agreed to build 30 surgery centers over the next three years with a corporate partner," says Dr. Hochschuler. "For the average spine or orthopedic surgeon, this is a great opportunity to be part of the operation structure and make ancillary income where their own healthcare dollar is being tremendously compromised. That's a huge potential lucrative area for Texas Back, and we are looking at that very seriously."
Texas Back Institute is also invested in two physician-owned hospitals, although the Patient Protection and Affordable Care Act of 2010 has restricted their growth. ASCs may be the most viable way for surgeons to own and control their surgical environment in the future.
Another initiative Dr. Hochschuler has become involved in is cost control of implants. He works with PDP, which could be the disruptive business model of the future. PDP allows providers to purchase implants from manufacturers at the wholesale price, cutting out the distributor.
"The middle man is the distribution network, which gets 12 to 38 percent of the sale," says Dr. Hochschuler. "If you can get rid of the middle man, you can lower the cost of implants. PDP has a great model."
In the future, Texas Back Institute will be looking at bundled payments and other ways to assume risk in accordance with national healthcare provider trends. Providers are also marketing their services to patients more now than in the past, and patients are taking control of their healthcare experience.
"We've got to make the patient in charge of their healthcare dollar," says Dr. Hochschuler. "We need to get health savings accounts on a bigger level so patients can shop for a surgeon or program based on quality, cost and outcomes."
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1. Keep practice contracts flexible. With today's healthcare environment changing so rapidly, it's important to keep any contracts your practice makes — with the hospital or otherwise — flexible. "Maintain as much flexibility with your practice as possible," says William Stevens, MD, founder of the Center for Spinal Disorders and OSNA member in Phoenix. "The smaller your practice, the more flexibility you need on long term deals, such as lease contracts. Any type of long term contracts should be evaluated carefully because you don't know where you will be over the next few years."
Structure long term contracts so it will be acceptable if you have to make a change, whether due to future hospital alignment or another unforeseen occurrence. Large groups of orthopedic and spine surgeons are less dependent on this flexibility because they have more negotiating power with other entities in healthcare.
"When a practice is acquired by a hospital group, there is often a loss of flexibility in terms of patient referrals and other practice functions," says Dr. Stevens. "In Phoenix, the primary care physicians are selling their practice to the hospital networks and are required to refer within the network, even if they aren't happy with the quality of care from those surgeons. In the end, it really comes down to providing good care and being able to document the quality, which can be used in negotiations with payors and hospitals for options other than direct employment."
2. Create checks and balances for financial issues. The practice's finances must be handled with care and should include checks and balances to make sure all the numbers come out right. Dennis Crandall, MD, founder and medical director of Sonoran Spine Center in Mesa, Ariz., has implemented "safety" or "accountability" protocols in how the office staff handles cash, billing and posting.
"Make sure all of the money issues have redundancy in their processes so that you are comfortable the system is going to work," says Dr. Crandall. "Employees should have a sense that they can't be dishonest and not have it noticed. It will be noticed."
You can create a management team to oversee these issues or design the processes so everyone is accountable for their actions.
3. Invest in information technology. Patients, payors and referring physicians will demand reported outcomes in the future, and the best way to collect this information is through a good healthcare information technology system. These systems should interact with hospitals and other providers so you can stay on the same page.
"Invest in information technology in a way that you can measure and report outcomes, whether to payors or hospital systems, to prove what you are doing," says Todd Albert, MD, spine surgeon and president of Rothman Institute in Philadelphia. "Be able to measure patient satisfaction as well. All these things are publicly reported, so know what they are and be ahead of the curve before your statistics end up in the newspaper."
Once you are able to track your outcomes and define your quality, insurance companies and policy makers will come to you as they create treatment protocols. "You have to prove your method works, not just say it does," says Dr. Albert.
4. Provide patient care coordination. One of the reasons why DISC was able to contract with the U.S. Olympic Team and Red Bull athletes is their ability to provide quick coordinated care. The center has a VIP athlete coordinator to arrange each athlete's care before they arrive at the practice. Many times the athletes are flown in from locations around the country; once they arrive, the coordinator has their appointments with different specialists scheduled so the care is as seamless as possible.
"Our VIP athlete coordinator takes the call from Red Bull America or the Olympic athletes and coordinates their appointments," says Robert S. Bray, MD, a neurological spine surgeon based in Marina del Rey, Calif. "If a BMX Biker for Red Bull North America goes down, they want to call up and have the athlete imaged, diagnosed and treated the next day so they can return to practice as soon as possible. Many times, the treatments aren't surgical and we can provide them the same day. With that kind of concierge sports medicine, we were able to develop our relationships with elite athletes."
5. Explore initiatives to lower the cost of care. One of the biggest efforts of healthcare reform is lowering the cost of care. Stephen Hochschuler, MD, co-founder of Texas Back Institute, is working with his colleagues on several initiatives to lower the cost of care while remaining profitable as an independent spine practice. One of the potential opportunities will be investing in an ambulatory surgery center in the future, which will lower the cost of the minimally invasive procedures performed there and enhance the practice's ancillary revenue stream.
"Our hospital chain agreed to build 30 surgery centers over the next three years with a corporate partner," says Dr. Hochschuler. "For the average spine or orthopedic surgeon, this is a great opportunity to be part of the operation structure and make ancillary income where their own healthcare dollar is being tremendously compromised. That's a huge potential lucrative area for Texas Back, and we are looking at that very seriously."
Texas Back Institute is also invested in two physician-owned hospitals, although the Patient Protection and Affordable Care Act of 2010 has restricted their growth. ASCs may be the most viable way for surgeons to own and control their surgical environment in the future.
Another initiative Dr. Hochschuler has become involved in is cost control of implants. He works with PDP, which could be the disruptive business model of the future. PDP allows providers to purchase implants from manufacturers at the wholesale price, cutting out the distributor.
"The middle man is the distribution network, which gets 12 to 38 percent of the sale," says Dr. Hochschuler. "If you can get rid of the middle man, you can lower the cost of implants. PDP has a great model."
In the future, Texas Back Institute will be looking at bundled payments and other ways to assume risk in accordance with national healthcare provider trends. Providers are also marketing their services to patients more now than in the past, and patients are taking control of their healthcare experience.
"We've got to make the patient in charge of their healthcare dollar," says Dr. Hochschuler. "We need to get health savings accounts on a bigger level so patients can shop for a surgeon or program based on quality, cost and outcomes."
More Articles on Spine Surgery:
24 Spine Surgeons Discuss Most Exciting Trends for the Future
11 Spine Devices Receive FDA 510(k) Clearance in January
Economics, Politics & the Independent Spine Surgeon: Q&A With Dr. Craig Callewart