ASCO Clinical Practice Series

Practice Management Series 2004 - 2005

Practice Management Curriculum

1. Adapting to Changes in Medicare 2. Generating Practice Efficiencies 3. Organizing for Service Expansion

Generating Practice Efficiencies

Streamlining work flow Increasing patient flow per physician Maximizing charge capture Managing expensive inventories Lowering 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 economy It’s all about… ↑ quality ↓ cost

The Old Days Median 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 $3,500 R 2 = 0.989

$3,000 $2,500 R 2 = 0.9902

$2,000 $1,500 $1,000 $500 R 2 = 0.9208

$ 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total Medical Revenue Total Operating Costs Rev. After Operating Costs

MMA Impact Per Oncologist with projections by Oncology Metrics $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $ 2000 Drug Cost 2002 Drug Revenue 2003 2004 2005 Drug Marginal Revenue

Practice Efficiency: Focus on Largest Expenses First AOHA/MGMA 2003 Report on 2002 Data Ancillary Supp staff 2% Support staff benefits 3% Mid Level Provider 1% Prof liability insurance 0% Clin. Support Staff 6% COGS 62% Physician 26%

Set Your Priorities

1. Drug Management 2. Physician Efficiency 3. Staffing

Benchmarking

Why?

 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

Benchmarking

How?

 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 Benchmarking

Using the MGMA AOHA Hematology/Oncology Cost Survey: 2003 Report Based on 2002 Data

Table 1.8b

2003 Report Based on 2002 Data

Per FTE Physician Count

Total Chemo Med Surg. Costs 45

Mean 25th Median 75th 90 th

$1,133,798 $ 751,859 $ 1,053,518 $ 1,387,087 $ 2,165,165

COGS Benchmarking

Using the MGMA AOHA Hematology/Oncology Cost Survey: 2003 Report Based on 2002 Data 1. Write down your COGS for 2004 2. Divide it by $1,250,000 per physician) (2004 trend based on 2002 data from MGMA/AOHA survey; median COGS 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

Drug Management

Drug 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?

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

Drug Management

Pharmacy 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

Drug Management – Looking Ahead

In 2006, CMS is proposing a Competitive Acquisition Program (CAP) for drugs Providers 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 1.8b

2003 Report Based on 2002 Data

Per FTE Physician Count Mean

Consultations & New Patients

39

308

25th

185

Median

231

75th

345

90 th

442

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?

Relative Benchmarks

1. 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 Flow Physicians Should…

Communicate with referring physicians – this drives practice growth See new patients – this drives practice growth Be seen at the hospital, participate in medical staff life See follow-up patients on a regular, clinically appropriate basis Delegate some follow-up visits to other providers as appropriate – PA, NP, RN Ensure quality of care throughout practice

Increasing Patient Flow Physicians Should

Not… Routinely be late for clinic Spend time filling out forms (ex. disability, tumor registry) Provide routine patient education Return routine patient phone calls (prescription refills, etc.) Micro-manage staff Undermine authority of administrator

Increasing Patient Flow Administrators Should…

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

Increasing Patient Flow Administrators Should

Not

…

Practice medicine or offer their clinical opinion to anyone, ever!

Undermine the clinical authority of any of the practice physicians Undermine the business and leadership authority of the physician leader

Increasing Patient Flow

Should you consider a Non-Physician Practitioner?

Also known as “mid-level providers,” includes PA, NP, CNS Increase patient volume at less expense than adding a physician Allow more flexibility in scheduling patient visits, more consistent schedule than physicians Generate revenue for practice even if physician is out of office Coverage for physician vacations – better continuity of care

Increasing Patient Flow Non-physician Practitioners Should…

Work as an adjunct to the physicians See routine follow-up patients, chemotherapy visits, other routine visits Allow physicians to see more new patients, consultations Serve as a resource for nurses, other staff

Increasing Patient Flow Non-physician Practitioners Should Not...

See new patients Practice beyond their state scope of practice

Practice Efficiency Staffing

Ensure that you are using all staff in the most appropriate way for the size of your practice Manage your overtime Task Analysis    Who does it?

Can anyone else do it?

How do they do it?

 Can it be done better?

Practice Efficiency Nurses Should…

Administer chemotherapy – patient assessment, check doses, discuss side effects, mix chemo in many practices Counsel patients – symptom relief, social issues Phone triage - answer patient’s symptom-related phone calls Patient education Help with drug assistance programs and indigent drug forms

Practice Efficiency Nurses Should

Not

… File Schedule appointments Handle pre-certs, pre-auths

Practice Efficiency Patient 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?

Practice Efficiency Chart 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?

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 2 nd insurance  Refer patients to appropriate resources - sources for 2 nd 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