Now is a good time for practices with a leaner appointment book to assess their needs and decide how to position the practice for the future. Here are five best practices to follow that will help your practice succeed now and after the recession.
1. Hold off on staff layoffs, if possible
As patient volume drops, one solution is to lay off staff. When volume recovers, however, you will have to refill those empty slots. Although the Spine Institute of Arizona in Scottsdale has seen a 20 percent drop in private-pay patients, it is holding on to staff and waiting out the recession. "We don't want to lay off employees now and then hire new ones back when the recession is over," says Donna Lahey, the administrator of the practice. She says it costs $3,000-$4,000 to hire and train a new employee and the disruption would harm morale in the practice, which is made up of Ms. Lahey, two spine surgeons, two physiatrists, one chiropractor, one physical therapist, a physician's assistant and a staff of 24.
Retaining staff in slow times means finding them meaningful work that can benefit the long-term goals of the practice. The doctors' offices at the Spine Institute hadn't been painted in years. "We said, let's make some fun out of this," Ms. Lahey recalls. Staff broke up into small groups and competed for a $100 gift certificate for the best decorated office. Each group received paint and $30 for decorations, which went a long way at local discount stores. "The physicians were excited about it and it created a real bonding atmosphere," Ms. Lahey says.
Ms. Lahey concedes there are only a limited number of such projects and if volume fell much more, the practice would have to reduce employees' workweek by two hours and require them to take vacations now instead of carrying them over. She has also explored another alternative to layoffs: a staff-sharing arrangement between two nearby orthopedic practices that also have low volumes.
2. Train staff now for future efficiency
Employees with downtime present a great opportunity to enroll them in training courses that hone their skills and make them more efficient in the long run, according to Cynthia Dunn, a practice management consultant with the Medical Group Management Association, based in Cocoa Beach, Fla. When she advises practices, "one of the biggest problems I see is a lack of training," Ms. Dunn says. "Staff are not equipped to do what they need to do. Let's train our folks to utilize the tools we give them."
Coding and reimbursement courses, available from professional associations and in several on-line offerings, often cost less than $200 and are sometimes available for free through insurance companies, according to Shannon Doyle, an MGMA consultant based outside of Denver. He adds that now may also be a good time to get staff trained in reporting quality indicators for pay-for-performance initiatives. Current incentive payments are relatively low but both private insurers and Medicare are gearing up for more extensive incentives, he says.
Ms. Lahey is not sending staff to outside courses, but she is using downtime to cross-train them in-house. For example, her billing office trained a front desk clerk to seek authorizations for insurance coverage and a file clerk to mail out billing statements, freeing up the billing staff to deal with denied claims, which had been piling up. "We're more on top of everything now and that's because we have people with these extra skills," Ms. Lahey says. "The doctors have gotten accustomed to the extra resources, so when we're back to a full schedule we may need to hire somebody. We'd probably hire a 'float' who would be cross-trained in a variety of jobs."
3. Step up marketing that can target referring physicians and patients
Physicians and staff with fewer patients can now devote more time to marketing efforts that can win more patients in the long run and even the short term. In the past few months, Ms. Lahey says the Spine Institute has started a number of marketing initiatives:
- A newsletter for patients. Doctors write the articles for this new offering and employees format, print, fold, staple and mail it, at significantly lower costs than local printers;
- Physicians' presentations at local hospitals. Since last fall, doctors from the practice have been speaking to lay audiences on cutting-edge procedures such as artificial discs and minimally invasive surgery. About 50-60 people show up at this hospital-organized event and the practice gets around 15 referrals from it;
- Marketing visits to referring physicians. In groups of three, employees visit doctors in several medical office complexes, handing out brochures and doctors' bio cards; and
- An open house for referring physicians. Recently expanded to two events a year, its only cost is catering and liquor for about 120 attendees. Representatives from device makers demonstrate models of their products for free. Staff set up and tear down furnishings and do most of the serving, which gives them an opportunity to discuss the practice. Mr. Doyle likes this approach. "Any time you can bring your referring physicians together is a great opportunity," he says.
4. Renegotiate contracts to take advantage of a new economic landscape
Due to rapidly changing economic circumstances, now is an excellent time for your practice to renegotiate contracts with:
- Payors: As spine surgeons exit Arizona health plans to escape falling reimbursements, the plans have had second thoughts and some are now agreeing to higher rates to fill gaps in their networks, Ms. Lahey reports. So far, she says, two out of the practice's 15 payors have agreed to rate hikes, at 10 percent and 15 percent. The practice has also signed on a new payor at a 20 percent higher rate than Medicare. Mr. Doyle adds that bringing a physician into negotiations will raise the practice's credibility and improve chances for a reimbursement hike;
- Vendors: At renewal time, Ms. Lahey says her practice tells vendors "I'd like to stay with you but if you can't lower your rates, I'm going to have to go somewhere else." She adds, "Not a single vendor walked away from that" — even the practice's medical waste management company, whose rates were almost twice as high as competitors. Ms. Dunn also recommends reviewing lease agreements such as for printers and faxes; and
- Health insurance: with rates rising as much as 20 percent a year, "you've got to shop your insurance coverage," Mr. Doyle says. He recommends moving to a $5,000 deductible plan coupled with a medical savings account. But Ms. Lahey opposes a high-deductible plan, saying she has seen its effects on patients who cannot afford their bills. Instead, she is considering plugging into a group plan, such as one offered by the Arizona State Physicians Association, which offers lower rates than small employers can get.
5. Get in the front of the line for the upcoming rush to EMRs
Practices that install electronic medical records now, when schedules are less busy, will have the time and energy to get through the disruptive and time-consuming implementation phase. The Spine Institute is installing an EMR system this summer. "I'm glad we're doing it now, when we have a lot of time," Ms. Lahey says. "We've been looking at systems for a couple of years now, but our doctors were always very busy, so it was a slow process. In the past few months, however, we could speed it up because we had the time."
Once the EMR system is up and running at the beginning of next year, the Spine Institute will be eligible for the full federal incentive payments for EMR, which begin in 2011 and fall off after 2012. The American Recovery and Reinvestment Act, the economic stimulus bill, initially provides $44,000 per physician for practices with EMRs, but by 2015 that amount falls to $20,000 and penalties begin to kick in — starting with a 1 percent cut in Medicare reimbursements, which rises to 3 percent in 2017 and thereafter. Despite this relatively fast-paced timeline, Ms. Lahey reports that specialty-based EMR vendors are hungry for volume and agree to discounts because many spine practices are still not purchasing EMRs. Consequently, her practice was able to sign an EMR contract in mid-June at 8 percent below list price.
Mr. Doyle warns that federal incentive payments only come after EMR systems are up and running and won't cover the full cost of EMRs, which he estimates at roughly $50,000 per physician over five years, including maintenance. Ms. Lahey's practice could afford the costs because it had already budgeted for an EMR several years ago. But there are ways to bring the price down, such as asking the hospital to pay for part of the cost, which does not violate federal anti-kickback laws as long as your hospital pays 85 percent or less of the price of the software, according to Ms. Dunn.
Ms. Lahey adds that EMR will bring efficiencies in the following ways:
- Doctors' notes are typed directly into the system, so that they can be sent directly to referring physicians who appreciate timely communications;
- Doctors' notes available in real time also speed up payment for workers' compensation and some insurers, who require notes before payment; and
- Patients will be able to use interactive services on the practice's Web site.