Here he offers his insight on the challenges of running a medical practice today. Read on:
Tell us your story – about how you got into healthcare business consulting, and about how you got where you are today.
I graduated from the University of South Alabama. I had a great education, but my passion was music. After struggling for several months I decided it would be a good idea to put my degree to work while I continued to pursue my music career. I interviewed for a number of jobs, but none of the offers gave me the freedom I needed to follow my music career.
I eventually ended up in an employment agency and they had a job for an assistant financial manager at a small community hospital in Mobile, Ala. I came from a lower-middle class family, so I never knew there were business people in healthcare. I thought it was great. I worked in the small 38-bed hospital for five years.
In time they wanted me to move to the corporate office. To avoid leaving Mobile (and my band) I got another job in urgent care. In this new position, I opened a facility in Mobile for Humana (This is when they were a hospital company). After a few months they encouraged me to interview for a job in Atlanta. I did and started there the following week. In Atlanta, my responsibilities were managing five urgent care centers including two of the top three and three of the top 10 centers in the country. One day, a manager at one of the facilities I managed left to work for an OBGYN practice. After a few weeks she began calling me about working for the consultant that was working with her practice. I finally agreed to an interview, he hired me and I’ve been at Medical Management Associates Inc. (MMA) for the past 30 years.
Describe the more targeted or specialized services you provide.
Our firm is unique in the wide array of services we provide. We serve physicians in private practice as well as hospitals/health systems in their relationship with their physicians. Our approach combines an in-depth understanding of the problems and opportunities within the healthcare system with technical expertise in management, contracts, economics, finance, managed care, systems, health planning, statistics, demographics, and design. Our business objective is to provide specialized, comprehensive management resources for our clients.
If there are specific targeted or specialized services, they currently relate to hospital affiliations and regulatory issues. The current trend of hospital integration works for some physicians, not for others. It is critical that physicians understand their options in these deals, the broader impact they will face with regard to day to day operations and the potential risks in the future. Physicians often do not understand their ability to negotiate the transactions nor the specific short- and long-term issues. Additionally, we assist our clients in the ever changing healthcare regulatory environment. As most healthcare consultants know, Stark and Anti-Kickback are currently the areas of highest exposure.
What are the major challenges of managing medical practices today?
Practices are suffering from administrative and regulatory fatigue. The sheer amount of change and new information is overwhelming. The providers are used to new regulations, but the volume of new reimbursement options without guidance make staffing, strategic planning and budgeting very difficult.
Medicare and Medicaid are very complex with risks of being non-compliant, high even when the practice has attempted to be diligent in their compliance efforts. Then each commercial plan has its own set of rules for obtaining reimbursement.
When MACRA was passed to replace SGR for Medicare reimbursement, it promised a reduction in administrative burden and a breathing period to help practices acclimate to the new rules. This promise has yet to be realized. One of our consultants has a saying, “It’s hard to do things by the book while the book is still being written.” This is the truth of today’s reimbursement and regulatory climate. Practices have potential of higher collection and bad debt issues due to new high deductible patient insurance coverage. Insurance payer consolidation, health system expansion, new competition from in- specialty physicians as well as from other specialties have reduced any leverage the private physician may have had to negotiate better fees. It’s all but impossible to keep up with day to day operations and know all the other issues that are critical.
What have you found are the biggest benefits of the transition to EMR?
Many of our clients would argue there have not been any benefits and that the majority of the monetary benefits has been accrued by the payors. They complain that the process of entering data in the EMR system slows them down and there is no evidence of benefits. These arguments tend to come from physicians who are in the mid to late term of their career. The younger physicians trained on EMR easily adapt and do not tend to complain.
From my perspective, there are current and prospective benefits. Using an EMR integrated with the practice’s billing system ensures that the services provided are billed for. This reduces uncaptured charges and generally improves the flow and availability of information throughout the practice. The improvement of data availability also assists in the process of managing denied claims and requests for information. Further, there are net financial benefits with savings on transcription, time savings in not having to look for lost charts and the benefit of remote access from multiple locations.
The prospective benefit will become increasingly important as outcomes and value-based reimbursement expands. It has been difficult for practices that are not on EMR to accumulate the data that has been required for Medicare’s quality/value payments. We have seen this with Medicare’s PQRS, Value Modifier and to some extent in Meaningful Use. We will see expansion of these value-based payment models to private insurers as well. Having the data and knowing what to do with it will benefit all EMR users. Some system configurations make it difficult for a physician to extract data for their patient populations to determine gaps in needed screening and preventative care. EMR upgrades should address this deficiency with user-friendly repeats that will allow physicians to identify all patients who have not had colon cancer screening within “X” years for example. Outreach to these populations will be vital in the world of value based reimbursement.
How do you advise clients on selecting vendors for EMR and for transitioning to new systems? What are the smartest things practices can do? What are the biggest mistakes they make in this process?
The most critical selection criterion is that the physician understands how the EMR works and is comfortable with the process. They cannot get that with just a demonstration or talking to their peers. They can only accomplish this through hands-on experience. We recommend all physicians contemplating an EMR purchase to visit other practices in their specialty who are using the system.
Second, the billing system needs to be integrated with the EMR in order for it to be highly functional. This is not a problem with most major providers. Practices also need to select an EMR provider that is likely to survive the certain consolidation among vendors in the market.
I remember in the late 80s when there were hundreds of billing system vendors in the market. As long as they were selling systems everything was great. However, once the market was fully serviced, the vendors who didn’t have enough customers to support the cost of ongoing support and enhancements were selling out to their competitors. The practices that had these legacy systems wound up using unsupported systems or were ultimately forced to switch to a new system.
The same thing will happen with EMR systems, only in today’s market there are literally thousands of vendors. Therefore, we encourage selection of major vendors. Many of clients want to use systems designed for their specialty. While these specialty specific systems are tempting, there is no way to accurately predict which will endure. We anticipate at least some of these vendors will not survive.
As far as transitioning to new systems, planning is key. The process will differ depending on whether the practice is transitioning from paper records or an existing EMR. We recommend flow charting the process; identifying the champion physician; considering all the options with regard to scanning old charts; starting with one physician using the system; start with a couple of patients a day and work up to more as efficiency improves; consider transcribers; to name a few.
The biggest mistake is trying to convert all providers to the new system at one time. Using a new EMR system is a huge strain on the practice. Easing in to the process makes it more tolerable and identifies issues that need to be resolved along the way.
What would you love to change about EMR? What improvements would you like to see made?
There would be substantial benefit from an operational perspective if the entry of clinical information could be switched from the physician to another staff member. This can be accomplished at some level with the use of scribes. While this won’t fully be accomplished, it would be a benefit.
The biggest change would be improved integration with other EMR systems. This is not likely, given the proprietary nature of the industry. However, if a nationwide paperless record is the ultimate goal then we need a standardized format to be able to seamlessly transfer information between systems without the cost of expensive programming.
How has EMR impacted practice management?
As stated earlier, using an EMR integrated with the practice’s billing system ensures that the services provided are billed. This reduces uncaptured charges and generally improves the flow and availability of information throughout the practice. The improvement of data availability also assists in the process of managing denied claims and requests for information.
More importantly, practices that understand their data have the ability to negotiate with managed care plans on a level playing field (perhaps with more knowledge than the plans) are poised to succeed in whatever new reimbursement concepts come in the future.
What are you doing now to prepare for the future of healthcare?
The future of healthcare is a big unknown. The proposed payment models have not been proven, we are not sure of the long-term impact of consolidation among payers and providers and depending on the outcome of the upcoming election, regardless of who wins, we will face challenges we cannot begin to predict. For now, we are providing insight on how to best deal with the present challenges.
What healthcare trends interest you most today?
Historically, we have served physicians in private practice. We believe there are still opportunities for physicians to succeed without a direct affiliation with a hospital or health system. In the mid-90s we saw physicians roll into hospitals and a few years later roll back out. While the current affiliation trend has run longer and many physicians will stay with hospitals, we have started to see some of those deals expire. Additionally, there are physicians who are committed to remaining in private practice. We have and are continuing to develop the skills and strategies to assist them in the new environment.
How has the Affordable Care Act affected business?
We are definitely busy, but we are always busy. The biggest effect relates to the significant increase in hospital/physician affiliation. We have experienced a large increase in our work with hospitals and health systems as they need independent third parties to provide fair market valuations for the financial relationships with their physicians. We know physician economics and valuation so our role in these activities has increased. We’re also assisting our physician clients evaluate and negotiate affiliation opportunities. We have also spent a lot of time educating our practices on the meaning of rules and implication of penalties for non-compliance.
How is patient pay affecting the practices you work with?
There are positives and negatives to this. While more patients have health insurance coverage, they are often not clear about the coverage they have. Despite the publicity, having insurance does not always result in receiving timely and appropriate care. They may have chosen a less expensive coverage option with large copays or coinsurance. It requires the physician’s staff to spend additional time educating the patients on their financial responsibilities or searching for patient assistant programs to cover the large out-of-pocket expenses. Otherwise, the patient may opt out of a treatment or become a bad debt case.
What should practices be doing today to better position themselves for the future?
Education is the key. Participating in professional organizations is critical, not only for the physician, but also the key staff. Also, key business advisors can assist in insuring the practice is compliant. I always say, “you only know what you know”, but you have to know most of it; not only to remain viable, but also to remain compliant.
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