Categories
Committees

The Cost Of A Committee Meeting

I am on 29 committees that involve everything from our hospital, the broader medical center, our department, and the college. So, I spend a lot of time in meetings and so do a lot of other physicians. Your hospital probably has a committee for just about everything. Next time you are in a committee meeting, take a look around you and see if you can estimate the cost of the time of the people there.

We’ll start off with an assumption that the average physician makes about $270,000 and has $30,000 in benefits for a total of $300,000. Primary care physicians make a lot less, medical specialists make a bit more, and surgeons make a lot more. Now let’s assume that the average physician works 51 hours a week for 46 weeks out of the year (figuring holidays, CME, and vacation). That works out to about $130/hour

Let’s now say you are in a meeting with 10 physicians plus a few administrative personnel. The cost of that meeting in physician time alone is $1,300 per hour or $22 per minute. If you are not making a $1,300 decision, you probably shouldn’t be having that meeting. So, if the meeting was to decide how to orchestrate the department Christmas party for 50 people and you spent 15 minutes trying to decide whether to serve steak at $25/person or chicken at $22/person then you just spent $866 to make a $150 decision. You would have been better off just ordering the steak dinners and had the physicians on the committee spend an extra 15 minutes seeing one more return patient in the clinic.

This doesn’t mean that you should purge your hospital of all committee because sometimes you need physician input in order to preserve the physician’s sense of self-determination and democracy and some would argue that these are priceless. But you do have to be prudent given the high cost of meetings with physician members. For a medical director here are some considerations:

  1. Be organized. A half-hour or hour getting all of the background information and preparing for a meeting can save hundreds of dollars of physician time in a meeting.
  2. Have an agenda. Without one, your meeting can devolve into free-flowing anarchy and will expand to fill the hour with unproductive talk. An agenda gives you permission to cut off discussion before you lose control.
  3. Don’t be afraid to table an issue. If it looks like you are not going to be able to approve a motion or there is not enough information, don’t spend more time on it. This can also serve to reign in meeting participants who are being difficult by sending a signal that you are not going to waste other attendees’ time on issues that are not going anywhere.
  4. If you have a regularly scheduled meeting and you don’t have any discussion items, cancel the meeting.
  5. Schedule meetings strategically. Primary care physicians are in their offices from 8-5 so don’t schedule committee meetings at that time if you want them to attend. Hospitalists are under increasing pressure to get daily discharges out before noon so don’t schedule morning meetings for them. Surgeons and anesthesiologists often start their day at 7:00 AM and morning meetings are not good for them either. Emergency physicians who get done with their night shift at 7 AM are not going to want to come back to the hospital for a noon meeting when they are trying to sleep. Prime times for committee meetings for physicians are 7:00 AM and 5:00 PM.
  6. Use committees judiciously. If your hospital has too many committee meetings, it is hard to make decisions about anything. However, committee meetings are invaluable for building consensus for difficult decisions.
  7. Use electronic meetings judiciously. Although connecting by phone or internet can be a great way to minimize travel time for physicians in outlying practice sites, it is often too easy to become disengaged when attending a meeting by phone. It can be very tempting to put the phone on speaker mode and then do emails or charting in the electronic medical record.
  8. Committees as a defensive weapon. A medical director often has to make unpopular, no-win decisions. Sometimes, it is useful to be able to say “The committee decided that…” rather than “I decided that…”.
  9. Feed them and they will come. Serving breakfast or lunch during a meeting can allow busy physicians to make double use of an hour in the morning or at noon. But beware of huge boxed meals – too many calories will put everyone to sleep by the end of the meeting. To paraphrase Machiavelli, “It is better to serve both food and coffee but if you can only serve one, serve coffee.”
  10. Committees are immortal. It is hard to make a committee die, even after it has out-lived its use. If you have a single defined issue that needs to be addressed, create a time-limited workgroup rather than a committee.
  11. Be sure that there is a committee reporting structure. Make sure that it is clear where the committee’s findings and recommendations get reported to. For example, the Medication Safety Committee reports to the Pharmacy and Therapeutics Committee that in turn reports to the Medical Staff Administrative Committee that in turn reports to the Board of Trustees.
  12. Keep minutes. Documentation of the committee’s recommendations and findings need to be written down. Partly so that after the fact, everyone can agree on what was discussed and decided. If there is no documentation of the committee’s work, then the flames of conspiracy theorists in the hospital will be fanned with wild suspicions about what happens behind the conference room doors.
  13. Choose the committee chairman carefully. The chairman should not be the one who talks the most or makes unilateral decisions. He or she should be someone who encourages all of the members to talk and promotes consensus rather than makes unilateral decisions.

Committees are an expensive necessity in the hospital. Always be sure that the value of the committee’s work is greater than the cost of the committee meeting.

July 28, 2016

Categories
Hospital Finances Medical Education

Financing American Colleges Of Medicine

IMG_0715Recently, the Association of American Medical Colleges (AAMC) released a report on how American colleges of medicine are funded and how this funding has changed over the past several decades.

As a hospital medical director, this has enormous implications for hospitals associated with medical schools and the report is pretty sobering. Let’s take a look at 2 years: 1980 (the year I started medical school) and 2015, thirty-five years later.

In 1980, the biggest source of income for colleges of medicine was state governments which accounted for 29% of the total funding. Support from federal research was next at 22%. Income from clinical practice (both from physicians and hospitals) was also 22%. Tuition accounted for 6%.1980 COM funding

Jump ahead to 2015 and there has been a huge shift in where the money comes from. Now state governments dropped to 6% of medical school funding. Federal research dropped to 14% of medical school funding. But clinical practice income now accounts for 60% of medical school funding. Of that 60%, 18% comes from hospital revenue and the other 42% comes from physician revenue. Tuition accounts for 4%.2015 COM funding

It is not that the state governments are paying less. Indeed, in 1980, the states contributed $1,639,000 to medical colleges whereas in 2015, the states’ contributions rose to $6,990,000. The problem is that the total cost of colleges of medicine has exploded, rising from $5,645,000 in 1980 to $112,978,000 in 2015. In order to support this exponential increase in costs, medical schools have had to depend more and more on clinical practice income, from both physicians and hospitals.

On the surface, this might seem that the colleges of medicine are like giant parasites feeding off of the toil of physicians and hospitals but the reality is more complex. In 1980, most academic physicians were in private practices, with a rather small portion of their income coming from colleges of medicine; the physician practice income went to the physicians and not to the colleges. By 2015, most academic physicians were no longer in private practice but rather were employed by either the teaching hospitals or by the college of medicine (and sometimes the hospital and the college are essentially the same thing). Therefore, with the changes in physician employment, the total cost of a college of medicine has had to go up since the college now has to pay physician salaries but the amount that the colleges receive from clinical practice income has also gone up since the college-employed physicians clinical practice income is now credited to the college instead of a private medical practice.

So what is the implication of all of this to the hospital medical director? First, if you are a medical director of an academic teaching hospital, you will have an increasing percentage of your physicians employed by the colleges and universities rather than being in separate private clinical practices. Second, with 15% of college of medicine revenues coming from the academic teaching hospitals, these teaching hospitals will have additional expenses not borne by non-teaching hospitals. Although academic teaching hospitals do have additional federal income that non-teaching hospitals do not have in the form of federal direct graduate medical education and indirect graduate medical education funding, these funding sources alone will not sustainably cover the hospitals’ contribution to colleges of medicine in the future.

So what can we do as hospital medical directors? We are and for the foreseeable future will be inextricably intertwined in a symbiotic relationship with our colleges of medicine and academic physicians. We will need to recognize that our hospitals will be obligated to help support activities that are not historically part of the hospital mission, such as pre-clinical medical education and medical research. We also need to be stewards of the hospital’s resources since the hospital administrative leaders will rely on our expertise to advise them on where money should appropriately be allocated. And as part of being stewards of those hospital resources, we will need to hold the colleges and the physicians accountable to ensure that hospital funding is being used wisely and for the purposes that it was intended.

I still firmly believe that being an academic physician is one of the highest career callings in healthcare. And being a medical director of an academic teaching hospital is for me the culmination of that career. As medical directors, we face the controversies, conflicts, and challenges posed by the dynamic relationships between the hospitals and the colleges but in the end, there is no better job on the planet.

July 27, 2016

Categories
Emergency Department

The Vital Signs Of The Emergency Department

IMG_0575Is your emergency department sick or is it healthy? If you want to know if a patient is sick, you start
with the vital signs. Emergency departments are the same except that the vital signs are data and you have to know what data you need to know in order to assess the health and efficiency of your ER. At my hospital, every morning, I get an email with the data from the previous day. For me, this is just as important as a patient’s morning vitals are to a hospitalist. Some of the key data elements from our hospitals daily report are:

  1. Number of ER arrivals
  2. Number and percentage of patients who left without being seen
  3. Number and percentage of arrivals who were then admitted
  4. Number and percentage of arrivals who elope
  5. Number of psychiatry consults and length of stay of psychiatry patients
  6. Average time from arrival to first provider (physician, NP, or PA)
  7. Average time from arrival to admission decision
  8. Average time from admission decision to departure from the ER
  9. Average length of stay for patients discharged to home
  10. Overall average length of stay in the ER
  11. Number of emergency squad arrivals
  12. Number of patients in ESI 1-5 categories (ESI is the Emergency Severity Index with 1 being the sickest and 5 being the least sick)
  13. Number of hours of emergency squad diversion

For all of these values, we also have the average daily value over the past 30 days for comparison purposes. It is easy to be overwhelmed by data so you need to know which pieces of data are the most valuable. As the hospital medical director, here are the ones that I scrutinize:

Left without being seen percentage. This is the percentage of patients who show up in your emergency department who leave without being seen by a provider (i.e., a physician, NP, or PA). These are patients who sign in, take a look at how many patients are backed up in the waiting area, and then leave because they don’t want to wait. On the surface, you would think that these are patients with non-acute illnesses, like they think they have a cold or they missed a menstrual period and think they might be pregnant. However, when we have looked at it, a surprising number of these patients are ESI 2 and 3 and really did need to be seen by a provider. If the left-without-being-seen percentage is too high, then your emergency departments healthcare resources are out of alignment with your community’s health care needs. The average ER has about 2.5% of patients who leave without being seen. Although getting to 0% is probably unrealistic for most emergency departments, getting as low as possible is the goal and if your rate is > 2.5%, then you probably have some work to do.

Emergency squad diversion hours. This is the number of hours in a day that emergency squads are “diverted” to other hospitals. Importantly, this does not mean that the hospital is closed and the lay public (and investigative reporters) often confuse this. When an ER goes on diversion, it means that the hospital is not able to easily handle a lot of acutely ill patients and so the squads are diverted to other local hospitals that at that particular time are more able to handle acutely ill patients. In large cities, this works pretty well since hospitals are often just a few miles apart but in a rural area or a one-hospital town, this can result in significant delays in getting patients to a location where they can be managed. Importantly, the hospital will remain open for anyone who does not arrive by emergency squad (for example, walk-in patients) and also generally will remain open for time-limited conditions such as ST elevation myocardial infarctions (STEMIs). There are a lot of reasons why an ER might go on divert: the ER is overwhelmed with patients, multiple patients in cardiac arrest arriving at the hospital ER simultaneously, lack of empty ICU beds to admit critically ill patient to, lack of open regular medical/surgical beds to admit any kind of patients to, unexpected nursing staffing shortages, etc. When the ER goes on divert, not only are you unable to meet your community’s healthcare needs, but since a high percentage of patients arriving by emergency squad end up being admitted, you are turning away potentially lucrative hospital admissions.

Time from arrival to first provider. This tells you how long patients are waiting before they see a doctor (or NP or PA). If this number is too high, then either you don’t have enough providers at certain times of the day, you don’t have enough patient rooms in your ER, or your triage process is not efficient.

Time from arrival to admission decision. This tells you how long it takes your ER providers to decide that a patient needs to be admitted. This metric can be affected by all sorts of things: whether there are enough providers in the ER, how quickly your lab gets blood tests resulted, availability of x-ray and CT scan testing, etc. If this number is too high, then you are going to need to drill down to determine which of the many causes is responsible.

Time from the decision to admit the patient until the patient leaves the ER. This tells you how long it takes to get the patient out of the ER once the ER physician has decided the patient needs to be admitted. Like the last metric, it can be affected by many variables: how quickly a bed in a nursing unit is ready, how efficient your intra-hospital transportation department is, whether your admitting physicians (for example, hospitalists) evaluate patients in the ER before the patient leaves the ER for the nursing unit or whether they see the patient after arrival in the nursing unit, how efficient your admitting department personnel are, etc.

ESI categories. This tells you how sick the patients are that your ER is seeing. In our ER, about three quarters of the patients will have an ESI = 3, followed by ESI 4, ESI 2, and then equally small percentages of ESI 1 & 5. On the other hand, at an ER in a tertiary care hospital or in a trauma hospital, the most common ESI may be 2.  If your ER has too many ESI 4’s and 5’s, then it is likely that your community needs more places to for non-acutely ill patients to be seen such as urgent care facilities, primary care physicians who take add-on same day visits, or “minute clinic” facilities such as exist at many pharmacies.

Room turnover per day. You can calculate this from the number of patients seen in the ER (arrivals per day minus the number who left without being seen) divided by the number of patient rooms in the emergency department. In other words, it is how many patients seen on average in each of room in the emergency department. The higher the number, the more efficiently you are moving patients through the ER. But there is a limit and if the number is too high, then it can be a sign that you need more ER beds. Last year, our room turn number was 6.4, in other words, each room in the ER had 6.4 patients every day. That is a pretty high number so we opened several additional rooms in the ER during the busy time of day with a drop in our room turn number to about 5.2 which is more manageable.

Patient satisfaction score. This is a tough one. Almost by definition, the patients don’t want to be in the ER. Compared to patients who come into the hospital for an elective hip replacement who generally leave pretty happy, about the best you can hope for with ER patients is that they don’t leave too unhappy. So it is hard to have as high of a patient satisfaction score for patients seen in the ER compared to those coming in for elective surgery. Nevertheless, if your ER’s patient satisfaction score is low compared to other hospitals emergency rooms, then you’ll need to drill down to find out why. From purely a business standpoint, an unhappy ER patient pays as well as a happy ER patient but the unhappy ER patient is not going to come back to your hospital when he needs a hip replacement.

It’s hard to treat patients without vital signs and it’s hard to do process improvement in your emergency department without data. But equally important, you have to know what data you need and how to interpret that data.

July 25, 2016

Categories
Hospital Finances Inpatient Practice

The Three Most Valuable Specialists In Your Hospital

book and stethescopeFrom reading the title of this post, you’re probably thinking that I am going to list some surgical specialties, interventional cardiology, or gastroenterology since these specialties bring in financially lucrative procedure volume to the hospital. So what I am going to say is going to surprise you. I’m going to make the argument that the 3 most valuable specialists in your hospital are geriatrics, infectious disease, and nephrology. I know what’s going through your mind right now: “What in the world is he thinking about?”. Well, let me make my case and then you decide. And it all starts with CPT.

CPT codes, or the Current Procedural Terminology codes, are the coding numbers that are assigned to every service and procedure that a physician does, from an office visit to an appendectomy. So for example, CPT 99221-99223 code for the 3 different levels of new inpatient encounters and CPT 99251-99255 code for the 5 different levels of inpatient consultation encounters. For decades, those consultation codes charged by a specialist paid more than the standard new patient encounter codes that would be charged for an admission history and physical examination by a generalist. This makes sense – if you are a specialist and providing a specialty consult opinion drawing from your additional years of training and experience, you should be paid more than the generalist doing a standard history and physical exam.

But on January 1, 2010, Medicare got rid of the consultation codes and required specialists to use the same CPT codes that the generalists were using for the admission history and physical exam. The net result of that decision was that cognitive specialists (i.e., those that do not have a procedure that they do) saw a significant drop in their income compared to the procedural specialists (i.e., those that do a procedure, like cardiac stress testing or colonoscopy). The three subspecialties that were affected the most were infectious disease, nephrology, and geriatrics.

Every year, the Medical Group Management Association (MGMA) publishes the starting salaries for physicians in their first year after completing training. In the past, specialists made more money than generalists. It makes sense… if you do an extra 2-3 years of training as a subspecialty fellow, you should expect a return on investment for that training and so you should expect a higher salary. But since the elimination of the consult codes by Medicare, some specialists, namely those that don’t involve doing lucrative procedures, have seen their salaries drop to the point that there is no longer any return on the investment of the extra years of subspecialty fellowship. Here is the most recent data from the annual MGMA salary survey from 2015 (based on data from 2014).

Physician salary

 

With general internal medicine, family practice, and hospitalist medicine, all you need is 3 years of residency and you are ready to start practicing. For all of the other specialties, you have to do 2-3 years of additional fellowship training. For infectious disease and nephrology, there is no salary advantage to doing those additional years of fellowship training (geriatrics is not listed in the MGMA report but their salary is typically similar to general internal medicine). In fact, the cost of doing the additional years of fellowship training is that you are going to make less than a family physician or a hospitalist who stopped after 3 years of residency.

For any of my colleagues in academic medicine who are looking at these numbers and saying, “I don’t make anywhere near that amount even though I’ve been practicing for years”, relax. The MGMA data is largely derived from private practice physicians and not academic physicians and as has always been the case, you make a lot more in private practice than you do in academics.

All of this has not gone unnoticed by medical students and residents when choosing a subspecialty. Recently, the National Residency Match Program released the results of the 2016 resident and fellow match. The results paint a frightening picture for the future of the cognitive specialties.

NMRP

This graph shows the percentage of available fellowship positions that were filled by graduates of American medical schools (blue) and the percentage of fellowship positions filled by all applicants, including foreign medical graduates (orange). In keeping with the starting salary data, residents just are not going into geriatrics, nephrology, or infectious disease. There is simply no return on the time investment of doing a fellowship.

So what does this mean for hospital medical directors? Geriatricians, nephrologists, and infectious disease specialists are going to become increasingly scarce. It is going to be harder and harder to recruit these specialists. Of equal concern, there is a danger that the best and smartest residents will be drawn to the other specialties, resulting in an overall drop in the caliber of the new cognitive specialists in future years compared to past years.

We are fortunate at our hospital. The Director of the Division of General Internal Medicine and the Chairman of Internal Medicine have placed a high value on geriatrics. We have great nephrologists and one of the premier interventional nephrology programs in the country. And 2 years ago, the Director of the Division of Infectious Disease recruited one of the best clinicians I know as our hospital’s lead infectious disease specialist and director of hospital epidemiology.

If you have a good geriatrician, a good nephrologist, or a good infectious disease specialist, take good care of him or her because he or she is going to be hard to replace. And when you have strategic planning meetings with your hospital business leaders, speak up for these specialties because hiring them now before their supply drops further is going to be a good long-term business decision. For medical students who have always dreamed of a career in one of these specialties, take heart, because in a few years the invisible hand that governs the law of supply and demand in capitalism will cause their salaries to rise again in the future.

July 23, 2016

Categories
Hospital Finances Medical Economics

MOON Over Medicare Or MOONed By Medicare?

Moon: verb; to expose one’s buttocks to someone to insult or amuse them, see also the Center for Medicare and Medicaid Services.

So the good people at CMS have developed a new program designed to reduce the national unemployment rate for hospital case managers. It’s called “MOON”, or the Medicare Outpatient Observation Notice. This is the latest rule in the Observation Game, which was created and brought to you by Medicare.

In the Observation Game, the players are the patients, the hospitals, and Medicare, each of whom try to avoid paying as much money as possible when a patient gets sick. Unlike most games, in the Observation Game, the goal is not to win the most money but rather the winner is decided by who loses the least money. When the game gets too predictable to the point that all of the players understand how to pay the game, CMS changes the rules to make the game more interesting, sort of like the character President Snow in the movie The Hunger Games.

The basic premise of the Observation Game is that Medicare tries to pay as little as possible when a person becomes ill or injured and needs hospitalization. If that person has an illness that would normally require less than 48 hours in the hospital, then Medicare defines that hospital stay as “observation status” and the patient is considered an outpatient. It is only for an illness that would normally require a hospital stay greater than 48 hours that the hospital stay is considered inpatient. The important differences are:

  1. Inpatient status:
    1. Covered by Medicare Part A
    2. Medicare covers the cost of the hospitalization
    3. Medicare covers the cost of any drugs given during the hospitalization
  1. Observation status:
    1. Covered by Medicare Part B
    2. The patient has a 20% co-pay for the hospitalization
    3. The patient is responsible for the cost of any drugs through their Medicare Part D plan, or if they do not have a Medicare Part D plan, then the patient pays for them out of pocket

In the Observation Game, Medicare tries to get as many admissions into observation status as possible whereas the hospitals try to get as many admissions into inpatient status as possible. The patients end up being sort of by-standers in the Observation Game – they can reduce the amount of money that they lose when they get sick and need to come into the hospital by buying supplemental insurance and Medicare Part D plans but the only way that they can control whether their illness is going to result in inpatient status is by waiting until their illness gets so bad that it is going to take more than 48 hours of hospitalization to treat it.

In order to ensure that the hospitals are not cheating by declaring too many patients requiring hospitalization as inpatient, Medicare uses Recover Audit Contractors, or the RAC, which are sort of like the referees in the Observation Game. The RAC are companies that can review medical records of patients who have been hospitalized and then determine based on the documents whether or not the patient’s hospitalization qualified as inpatient status or not. If the RAC determines that a patient whose hospitalization was billed to Medicare as inpatient status did not meet the rules for being an inpatient (and instead should have been observation status), then the hospital has to pay back the money from that hospitalization to Medicare and then the RAC gets a commission based on the amount of money returned to Medicare. This is kind of like the referee in a basketball game getting paid more for every foul that they call.

In the past, Medicare found that just defining observation status as being hospitalized for less than 48 hours was not challenging enough for the Observation Game so it changed the definition of observation status to be hospitalization for less than 2 midnights. Therefore, a patient who is admitted to the hospital for 36 hours starting at 6:00 AM would be considered observation status (i.e., one midnight passes before discharge) whereas a patient who is admitted to the hospital for 36 hours at 11:00 PM would be considered inpatient status (i.e., two midnights pass before discharge). The hospital players of the Observation Game have pretty much figured out how to play the game with the 2-midnight definition of observation status versus inpatient status so Medicare has decided to change the rules a bit in order to keep the Observation Game from getting too dull.

So here is where MOON comes in. When a hospitalized patient is in observation status, the hospital has to have a patient sign a form notifying them that they are in observation status and therefore considered as being an outpatient with all of the addition costs that the patients will have to pay. This notice is called the Medicare Outpatient Observation Notice or MOON. On the surface, that sounds like a pretty simple rule but Medicare wanted to make the Observation Game more interesting so beginning on August 6, 2016, the MOON has to be given to the patient after 24 hours of hospitalization but before 36 hours of hospitalization. In other words, the hospitals have a 12-hour window during which time they have to have the patient sign the MOON. If hospitals don’t follow this rule, then they don’t get paid.

But here is the sad reality of the Observation Game. When a person gets sick or injured, it costs money to treat him or her. By using the rules of the Observation Game, if Medicare doesn’t have to pay for that treatment, then either the patients or the hospitals do. And if the hospitals have to pay for that treatment, then the hospitals are going to charge more to everyone else so that the hospitals can eventually cover their costs.

So think back to the definition: moon: verb; to expose one’s buttocks to someone to insult or amuse them. The next time you are hospitalized, if you get MOONed, were you insulted or amused?

July 23, 2016

Categories
Inpatient Practice

The Ten Commandments Of Consultation

Thirty years ago, Dr. Lee Goldman wrote an article titled “Ten Commandments for Effective Consultation”. I’ve taken some liberties with his recommendations in the context of practice in an era of the electronic medical record.

  1. No consult question is too small. If a physician requests a consultation, it is usually because he or she believes that they and their patient will benefit from your expertise.
  2. Weekends are the same as weekdays. Patients should expect the same level of physician care no matter what day of the week they happen to be in the hospital. New consults on Saturdays and Sundays should be seen promptly.
  3. Follow up your test results. Advising what test to order is one half of your responsibility as a consultant. Interpreting that test result in the context of the patient’s illness is the other half. As a consultant, you share responsibility for the tests that you recommend to the primary service.
  4. A consult is a gift. In the business of medicine, consultants survive by providing consultation. Refusing a consult is like refusing a birthday present.
  5. It’s not a request for consultation, it’s a request for collaboration. The admitting physician may not see your note until the next day and so tests or important medication changes may not be ordered for >24 hours unless you ensure that they happen promptly. On teaching services (with residents), call the resident to let him/her know what you want done. On non-teaching services, enter your own orders for tests or medication changes for the problem that you were asked to assist with or call the attending physician with your recommendations. Inpatient medicine has become a team sport and the patient who wins is the one who has the strongest team of physicians, not just a single strong player.
  6. Availability trumps ability. A consultant succeeds by providing the best customer service and the physician requesting consultation is the customer. Consults requested before 10:00 AM should be seen that day. Seeing patients promptly and being available by phone/pager to the primary service is best practice. If you need your car’s oil changed, would you give your business to the garage that is only open from 9 AM to noon or would you go to the garage that is open from 7 AM to 7 PM?
  7. The discharge is the most dangerous procedure in medicine. As a specialist, you are in the best position to know what is needed in follow up. Assist by scheduling outpatient testing or clinic appointments. Give specific recommendations for medication doses and duration after discharge (especially antibiotics). If monitoring labs are necessary for the treatment that you have recommended, either have those labs sent to you for action/review or make sure that there is a clear hand off to another physician who will take responsibility for those lab test results.
  8. Answer the question that you are asked. You may find additional medical problems that need to be addressed but never forget to respond to the initial question.
  9. Distillation is more important than regurgitation. With electronic medical records, it is easy to import pages and pages of test results. The physician requesting your consultation is not requesting you to restate all of the data retrievable from the computer, that physician is requesting your analysis of all of the data. Make your assessment and analysis easy to locate in your note. When it comes to background data in your consultation note, in general, less is more.
  10. Don’t be a one and done. Your initial impression and recommendation are valuable but your follow up of those recommendations is often even more valuable. See your consults daily until the problem that you were asked to address is resolved or stabilized. Consult follow ups should be seen daily, whether that day is a weekday or a weekend.
  11. And the Golden Rule of consultation: Consult unto your neighbor as you would want your neighbor to consult unto you. Enough said.

July 22, 2016

Categories
Physician Finances

40 Questions To Ask During Physician Contract Negotiations

Entering a used practice can be like buying a used car. You just never know where it has been or how well it is really running, regardless of what it looks like on the outside. At our hospital, physicians have a lot of different employment models with some employed by the University, some in small group practices, some who are in solo practices, and some that are in large multi-specialty practices with hundreds of physicians. Our fellows asked me to give a talk next month on what to look for as they begin their job searches for their future medical practices. Here is a summary of my thoughts… 40 questions to ask during job negotiations:

  1. What is the salary? BEWARE OF THIS QUESTION!! Salary ≠ Salary. There can be hidden benefits and there can be hidden costs. This is a question often best left to the end of the job interview. There is often considerably more to job satisfaction than income than money alone. Don’t say “yes” to the first job offer but do your homework and check the MGMA salary report as a general guide of what salary to expect.
  2. Will you be hospital-employed or privately employed? In 2002, 75% of physician practices were owned by physicians. By 2011, more than 60% were owned by hospitals. The current trend is definitely toward hospital employment and even if you are looking at a private group, there is a chance that it is negotiating an employment agreement. Although there can be advantages to either model, current healthcare economic policies and reimbursement make it easier to succeed in a hospital-employed model in most cases.
  3. Who governs the practice? In small groups it is the partners. In large groups it is typically a CEO and board of trustees. In hospitals it is usually a CEO and board of trustees. At Universities it is usually the Dean and board of trustees. In government agencies, it is an administrator or political appointee. Be sure that the governance places a priority on your interests.
  4. Who do you really work for? Particularly with hospital or academic employment, the leadership structure can be complex and more resemble a matrix than a hierarchy. With large organizations and practices, be sure you know who you will report to and who will be making the decisions that will affect different aspects of your job.
  5. How does the group define clinical productivity? RVUs? Patient encounters? Shifts? Billings? Receipts? Each of these has advantages and disadvantages. How clinical productivity is measured for one specialty may not be best for a different specialty.
  6. How many patients should I see? This is not only specialty-specific but can vary tremendously from one patient population to another within the same specialty. Hospitalists generally see about 1.5-2 patient encounters per hour or 15-18 encounters per day. But not all encounters are equal, for example, a hospitalist co-managing reasonably healthy patients admitted for joint replacement surgery can see far more patients per shift than a hospitalist doing primary management of complex medical admissions admitted through the emergency department. Ambulatory physicians should expect about 20 minutes per patient. 82% of physicians work 8-12 hours per day for an average of 10 hours per day and an average of 59.6 hours per week. For internal medicine it works out to about 110 patient encounters per week.
  7. Do I need a productivity ramp-up period? If you are an emergency room physician, anesthesiologist, trauma surgeon, or critical care physician, then the answer is no because you will have a full slate of patients your first day in the hospital. If you are a surgical specialist, a consultant in a competitive market or a primary care physician then the answer is likely to be yes. Ramp-ups give the new physician a guaranteed salary if they are not able to make their own salary with their own billings and are usually phased out over a 1-3 year period. Also, most physicians do not reach optimal clinical efficiency until about 7 years after completing their formal training, which is why physicians age 50-60 are currently the most productive physicians in the United States.
  8. What is the group’s payer mix? You can plan on bringing in about $34/RVU for Medicare, $25/RVU for Medicaid (depending on your state), and $30-70/RVU for commercial insurance. Self-pay patients can vary but most of the time will provide negligible reimbursement.
  9. Will my payer mix affect my income? In Ohio, it can take up to 180 days to get commercial insurance company provider approval. Therefore, building a practice may mean more self-pay and Medicaid in the beginning. If you plan to rely on inpatient unassigned ER admissions to build your practice, bear in mind that these patients will generally have a lower payer mix. The affordable Care Act Medicaid expansion states have much better payer mixes than those states that opted out of Medicaid expansion. States that did NOT adopt Medicaid expansion include: Alabama, Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.
  10. Who negotiates commercial insurance contracts? Small group practices will usually get the “standard” rates from insurance companies and this is typically 90-110% of Medicare on a per RVU basis. Large groups may have higher reimbursement from the same insurance companies, depending on their leverage. Huge groups or those with monopolies may get 150-180% of Medicare rates. If the hospital is sponsoring the contract negotiation with an insurance company, the focus may be more on hospital reimbursement rates than on physician reimbursement rates. Most patients don’t realize that when they get admitted to the hospital, the amount that 2 physicians get paid by an insurance company to provide a given service or do a procedure can vary depending on who those physicians are employed by.
  11. Are “easy” duties equally shared? There are some clinical activities that can generate a lot of income per physician work hour. Be sure that the more senior members of the practice are not hoarding all of these relatively easy activities such as EKG interpretation, PFT interpretation, bone density interpretation, reading cardiology non-invasive tests, EEG interpretation, EMG interpretation, and sleep study interpretation.
  12. Are there medical directorships? These can be a great way to balance your overall employment activity portfolio, much like having some bonds in your investment portfolio. These can take the form of hospital directorships, practice-owned lab/imaging directorships, governmental directorships, industry directorships, and university teaching salary lines.
  13. Is there a buy-in? This used to be pretty standard but is uncommon now and should be a red flag to you. There are some things that are appropriate for buy-in: property, equipment (depreciated), and accounts receivable. Think twice before buy-in for: referral base, patient charts, or practice equity.
  14. Can I moonlight? No two moonlighting activities are exactly the same and be sure you know what the rules are before you sign your employment contract. Expect on having some unexpected expenses in your first few years of practice so being able to make a little extra money can really help. These may take the form of extra hospital shifts, extra clinics, expert witness testimony, business consulting, honoraria for giving talks, or board memberships. In some groups, income from these activities belongs to the practice and in other groups, the income belongs to the individual physician.
  15. What intangibles will add to your job satisfaction? These can include teaching, research, publication, public health, community service, sports medicine, and medical volunteerism. Don’t underestimate the value of these things. In a recent survey of physicians, 17% said they were very dissatisfied and 25% said they were somewhat dissatisfied with their job. Only 41% of physicians said that they were very likely or somewhat likely to recommend a young person to go into medicine. I have lots of uncompensated intangibles in my job and that is one of the reasons that I’m so happy with my job.
  16. Are there plans to be an accountable care organization (ACO)? ACOs were started as a provision of the Accountable Care Act in 2012. They are created by physicians and hospitals combining to provide all of the healthcare for at least 5,000 Medicare beneficiaries for 3 years. The providers are jointly responsible for the care of the patients with a goal of reducing unnecessary tests, keeping costs down, meeting quality benchmarks, and focusing on prevention. Those ACOs that are successful get paid extra by Medicare. However, many ACOs have failed, resulting in lower income. ACOs’ existence is also vulnerable to who is in Congress and who is the President so there is no guarantee that they will still exist 3 years from now. The bottom line, beware of practices that are ignoring ACOs but also beware of practices that are counting on ACOs to survive.
  17. Does the practice use advanced practice providers? These can be nurse practitioners, physician assistants, CRNAs, clinical nurse specialists, or nurse midwives. The scope of practice of these providers varies from state to state so know the laws of the state you will be moving to. Also, there is a big difference between advance practice providers employed by a hospital versus employed by a physician practice. If they are employed by the hospital, then you the physician cannot use their documentation for your own notes in order to justify the level of service billed. It is possible, however, for the physician group to lease some of the advance practice provider’s time from the hospital enabling the physician to use the advance practice provider’s documentation as part of the physician’s note.
  18. Is there an electronic medical record? This is not as much of an issue now compared to a few years ago since now, most practices will have an EMR of some kind. However, you do need to ask a few questions. Does it meet federal EMR requirements? Does it interface with the hospital EMR? Does it interface with referral physicians? Does it interface with the billing department? Does it work for you or do you have to work for it (not all EMRs are equally user-friendly)?
  19. Are there restrictive covenants? Even though you think that your first job out of residency will be the one you will stay with for the rest of your life, it probably isn’t. Restrictive covenants can take many forms including: geographic non-compete, non-solicitation, hospital non-compete, and chart ownership. Restrictive covenants can be appropriate for some specialties but they must be reasonable. A 10 mile geographic non-compete clause may be OK for a thoracic surgeon specializing in robotic surgery. A 50 mile geographic non-compete is probably not OK for a hospitalist.
  20. What about call? Do all partners participate equally? Not all call is created equal, for example, is call taken at home or in the hospital? If it is home call, how frequently do you have to come into the hospital at night? How many hospitals do you cover when you are on call? Is there a surge plan in case you get overwhelmed with admissions or consults? Are there residents or hospitalists who are in the hospital covering the patients with you?
  21. What about shift work? If you will be working shifts (for example emergency medicine or hospitalist medicine), then who makes up the schedule? Does the new guy do all of the night shifts? Is there a shift pay differential for the undesirable shifts? Beware of productivity-based salary plans that have shift work because not all shifts are productivity-equal, for example, you probably won’t hit your RVU targets if you are primarily working the midnight to 8 AM shift in the emergency department.
  22. How will my success be defined? RVUs? Total income? Number of procedures? Quality metrics? Patient satisfaction? Readmission rates? Length of stay? Publications? Grants? None of these are necessarily bad measures of success but just know what the rules are and what is valued by the practice before you start.
  23. What is the history of the practice? Recent physician turnover can be a warning sign. A new venture may be riskier than an established group practice. Some turnover is OK – many/most physicians change jobs in their first 5 years of practice.
  24. What’s under the rug? Some of the things that they won’t put in the employment ad you read in a medical journal can include: Medicare fraud history; federal investigations such as HIPAA violations, tax fraud, Stark violations, or discrimination; employee civil suits; state Medical Board violations; and malpractice history. If there was recent attrition, why did the previous doctors leave? Always Google the practice and the senior members of the practice to be sure that there is no hidden dirt on the practice.
  25. Are there negotiable incentives? The salary may be non-negotiable, but there are a lot of other things that the hospital or practice may be willing to pay for. Sometimes, all it takes is just asking about student loan repayment, moving expenses, signing bonuses, board certification exam fees, DEA license fees, state medical license fees, practice advertising/promotion costs, and pager/cell phone/answering service.
  26. What are the benefits? Computer? Expense accounts (CME, travel, books & journals, equipment?), Sick time accrual? Vacation time accrual? Retirement? Maternity leave? Paternity leave? Tuition discounts? Health insurance? Life insurance? Disability insurance? Health club membership? Meals? These can really add up and can make a job more valuable even though the salary alone may be considerably lower.
  27. What is the practice overhead? There are some elements of overhead expense that all practices will have such as billing expense (“revenue cycle”), legal expenses, practice administration, rent, equipment, nurses, etc. Academic institutions will uniquely have additional expenses such as “Dean’s tax”, departmental tax, fellow salaries, research faculty support, and support of money-losing specialties. None of these are necessarily bad but you should know where every penny of your collected dollar is going.
  28. What is the collection rate? This is a point of confusion for most physicians. The gross collection rate is the amount that you get paid versus amount you billed and typically 40-60%. It is completely dependent on where the practice sets its fees and is largely irrelevant. The net collection rate is the amount you get paid versus the contractual rates. This should be as close to 100% as possible and should always be > 90%. The net collection rate is a reflection of billing efficiency and is highly relevant.
  29. What are the contract termination conditions? Most initial contracts are for 1-3 years. Frequent re-negotiation can be tedious but can protect you against changing medical economics. The contract should contain a termination clause. Typical “without cause” termination is 90 or 180 days and typical “with cause” termination is immediate.
  30. Where will you actually be practicing? Most practices will have multiple locations that they practice in and just because your initial interview was at the flagship hospital does not mean that you will be spending all or even any of your time there. Know if you will be working at an outpatient clinic, an inpatient hospital, an urgent care, doing telemedicine, an LTACH, an affiliated hospital, or a nursing home.
  31. Do you have a unique marketable skill? This can be negotiated into a higher salary than the standard base salary and can include expertise in interventional endoscopy, interventional bronchoscopy, cardiac MRI, endoscopic ultrasound, robotic surgery, laparoscopic surgery, or experience in a specific disease.
  32. Does it feel right? For most physicians, that sense of it “feeling right” was one of the main factors in deciding what residency to choose. That same sense is helpful for your first job after residency and can be affected by, the partners, the practice, the administrator, the hospital, and the community.
  33. What kind of malpractice do they have? “Claims made” means that the insurance coverage period covers the period of time the claim is filed. Claims made policies require purchase of a tail to cover any claims filed after the coverage period. “Occurrence” means that the insurance coverage period covers the period of time when the actual event occurred and it does not require purchase of a tail.
  34. Who pays malpractice? The contract will usually say who pays for the annual premiums but be sure that you know who will pay for a tail insurance policy if you leave the practice. The cost of the tail can vary depending on the cost of the regular premium, the physician’s specialty, and how long the physician worked at the practice before resigning. Tail coverage can be very expensive.
  35. What is the retirement plan? There are a bewildering number of retirement plan options including defined benefit pension plans, defined contribution pension plans, 401a plans, 401k plans, 403b plans, 457 plans, Social Security, IRAs, and SEPs. If you assume that you will work for 30 years and then live for 15 years after you retire and you are now making $150,000/year and you estimate you will need 80% of your annual income in retirement, then you are going to need about $5,000,000 by the time you retire. It is not as difficult to achieve as you might think but it is very important that you start early in your career. Be sure you know what your retirement savings options are and then take advantage of them early in your career to the best that you can afford.
  36. How difficult was the contract negotiation? Was it a struggle? Was it fair? Your first negotiation with the partners or the hospital will not be your last.
  37. Did they give it to you in writing? Some of the warning signs to be on the look-out for include a partner’s spouse who is involved in practice administration, an “acting” chairman (academic position), resistance to provide details in writing, no incentive bonus, a history of frequent physician turnover, and partners who are all old or all young.
  38. Is the contract assignable or non-assignable? In the event of a potential group acquisition, consolidation, or merger will you be obliged to work for the new group (assignable contract) or will you be free to leave (non-assignable contract).
  39. What happens if you leave? Can you cash in your unused vacation time and does it accrue from one year to the next? Can you cash in your unused CME time or unused sick time? Do you get to keep your accounts receivable or will they stay with the practice?
  40. Do I need to have an attorney review the contract? Maybe…The bigger the practice, the less negotiable the contract but it is usually worth a few hundred dollars for the peace of mind that an attorney will give you that you are not being taken advantage of.

 

July 21, 2016

Categories
Committees

The Committee Menagerie

Recently, my son jumped up from the dinner table and ran outside. It turns out he was chasing a Pokemon on his iPhone. There are hundreds of different Pokemon and as it happens, there are also dozens of different creatures that inhabit the committee menagerie. Whenever I sit down at a hospital committee meeting and look out over the attendees, there are always a few distinct species that are there, each with its own fairly predictable behaviors and powers. Here are some of the more common ones:

Snoozeum. A nocturnal beast who sleeps during the day. In committee meetings, it will occasionally wake up for donuts or free lunch. Harmless but during meetings, can be annoying when snoring and can be disconcerting when it has undiagnosed sleep apnea.

Hyperbolator. Easily identified by its unique ability to use 50 words in a 10 word sentence. He has a symbiotic relationship with snoozeum and is the only creature who will cause snoozeum to sleep despite availability of donuts.

Drone-onicus. Although evolutionarily related to Hyperbolator, this species possesses considerably greater endurance than Hyperbolator and is able to suck the life out of a meeting by speaking for up to 30 minutes on a single breath without pause. It typically becomes increasingly tangential with its thoughts and speech the longer it talks. It has the unique quality to turn any committee attendee into a Snoozeum and can often be identified by bringing 40 PowerPoint slides for a 5 minute presentation.

Obfuscatam. This animal can be identified by its sound. When asked a question that it doesn’t like, it will answer with a response to another question that it does like. More often found in political habitats, Obfuscatam does sometimes venture into the hospital habitat where it leaves a trail of head scratching physicians uttering “What did he say and what does that have to do with anything?”.

Negatorus. This is a species that is a remote ancestor of Eeyore of the hundred acre wood. It never met an initiative that it likes and has the ability to see the worst possible outcome of any new venture. It is convinced that something bad is always going to happen. It becomes agitated when exposed to sunny days and puppies.

Textasaur. With thumbs that move as fast as hummingbird wings, Textasaur is in constant motion. Not much is known about its facial features since it rarely looks up from its smartphone. Usually found near electrical outlets in order to maintain its phone’s seemingly high metabolism rate. Textasaur is harmless in large committees but in small committees of 3 or 4 attendees, Textasaur can be highly annoying.

Typeasaurus. You’ll never see a Typesaur as it never attends meetings in person. The only true evidence of its existence is during conference calls. Characterized by the lack of a mute button on its phone, it uses the speaker setting on its phone in order to free up its hands to type on its keyboard. By placing its phone strategically close to its keyboard, it is able to amplify the key strokes for everyone on the conference call to hear and is easily able to drown out all voices on the conference call. It is believed that  the loudly amplified keystroke noises are a mating call for other typeasauruses.

Ruminatadon. Moving at sloth-like speed, Ruminatadon thrives in committees and can chew on a single decision for an entire hour without swallowing. Usually requires an additional month to fully digest any proposal and asks for a follow up committee meeting before it will make any decision.

Granddadasaur. It starts most comments with “Back when I was a resident…”. It laments the loss of the paper medical record and longingly recalls delightful hours spent waiting at the radiology film library window. Outside of the hospital, it often submits letters to the local newspaper editor believing that political change alone can bring back jobs from a happier time, such as blacksmith, canal boat captain, and slide rule manufacturer.

Rantasaur. This creature can be identified by its ability to change color from pale to bright red when it speaks. Rantasaur is perpetually angry at some other species and has a perception of perpetual victimization. It has been known to undergo spontaneous combustion during particularly severe tirades.

Narcissizard. This species cannot let a meeting or grand rounds go by without asking a question or making a comment. Most of its utterances don’t have much to do with the topic at hand but the animal is certain that the meeting attendees cherish its every word. It can also be found in the surgery locker room looking into the mirror and asking itself questions, then smiling.

Copernicusipus. Convinced that the entire hospital revolves around its own territory, this species is unfamiliar with other habitats within the hospital. With an insatiable appetite for hospital resources, if not tightly reigned in, the creature can single handedly consume the entire hospital budget for a year. Often found to express indignation when a committee votes to budget one unit to get clean bedsheets for patients while denying its personal request for a second double expresso moca latte caffeinator machine for the physician lounge in its own habitat.

Intimidatadon. This carnivorous beast possesses large fangs which it frequently bares in order to frighten other species into getting its way. It is highly venomous and particularly malodorous. It is able to go for up to 6 months without having anything nice to say about anyone.

July 20, 2016

Categories
Hospital Finances

Articles about hospital charges will never get you a Pulitzer

Every year, an eager young reporter will call up hospitals in some large U.S. city and ask how much they charge for procedures like a hip arthroplasty, MRI, or obstetric delivery. He or she will become outraged to find out that there is enormous variation in the amount that different hospitals charge and write a newspaper article exposing the “high cost” hospitals and hoping to be rewarded with a Pulitzer Prize. All I can do is shake my head and sigh.

If you are a foreign prince coming to the United States to get your hip replaced, this information may be valuable to you but if you are an average American, the hospital charge is irrelevant. The reason… almost nobody pays the amount that appears on the hospital charge list.

If you are 68 years old, the cost of your hip replacement is going to be (almost) the same at any hospital you go to and that is because the hospital and the orthopedic surgeon get paid the amount that Medicare will pay for a hip replacement regardless of what the hospital or the doctor charges. I say almost the same because there are some minor adjustments in what Medicare will pay based on the geographical location of the community, whether the hospital is a teaching hospital, etc. but the amount is pretty close for all hospitals.

For people under age 65 on Medicaid, it works the same – regardless of how much the hospital “charges”, Medicaid pays only the same fixed amount. For those people under 65 who have commercial insurance, it is a little different: the insurance company will usually have a standard rate that they will pay regardless of the hospital charge and when the hospital and the insurance company negotiate a contract every few years, the hospital will agree to what that rate will be. Big hospital organizations can often leverage their size or notoriety to negotiate rates that are higher than the “standard rate” (but that is a topic for a separate post).

For most hospitals and most physicians, the “charge” for a hip replacement will be 1.5 to 3 times higher than what commercial insurance companies will pay. So why set the charges so high if it doesn’t affect how much you get paid? Two reasons:

First, the hospital (or doctor) always wants to set the charge for a procedure higher than whatever the highest-paying insurance company will pay for it so that they don’t leave money on the table. For example, lets assume Medicare pays $400 for an MRI test, insurance company A pays $450, and insurance company B pays $500. If the hospital charges $400 for the MRI, then that is all insurance company A and B have to pay so the hospital will leave $50 from insurance company A and $100 from insurance company B on the table. On the other hand, if the hospital charges $600, then they will get paid $400 from Medicare, $450 from insurance company A, and $500 from insurance company B.

Second, sometimes, the hospital will get paid whatever they ask for with their charges. This doesn’t happen very often but if your hospital has a lot of foreign princes flying in for their hip replacement, then it makes sense to ramp up the charges since that foreign prince will pay whatever you charge him. There are a few rare occasions when an insurance company will pay whatever the “charge” is – in my experience, this mainly happens when a lawyer or an insurance company pays a physician to do an independent medical examination for disability determination. The hospital charge can also apply to people who don’t carry insurance; this was pretty common before the Affordable Care Act when the percentage of our hospital’s patients who were uninsured was running about 13% but since the ACA was enacted and Medicaid was expanded in Ohio, our uninsured percentage has dropped to < 3%. Most of those who remain uninsured have low incomes and the hospitals will usually negotiate some reduced charge based on the patent’s ability to pay or write it off completely if the patient is indigent.

If you want to find out what Medicaid pays your doctor for a procedure or service, you can look up the current Medicare Medicare Physician Fee Schedule Search – regardless of what your doctor charges, this is what he or she is going to get paid by Medicare.

So next time you come across an article about unfair hospital charges written by an infuriated reporter, do what I do… skip to the sports page.

July 19, 2016