Pat Kroken

Healthcare reform is game changer but nobody can yet fully articulate the impact of the new rules. How do you plan for the future when there are so many unknowns? This is the second article in a series that examines how healthcare reform is likely to affect radiology practices and how they can prepare for drastic changes to come. 



 To plan for life under healthcare reform, it is important to look also at other changes looming in the near future, especially since so many of us have a tendency to procrastinate when a deadline is several years away. As mentioned in the first article in this series, (

Surviving healthcare reform: Get lean, learn the insurance game

), it is time to get our radiology house in order with the goal of developing a lean and flexible business entity with the capacity to adjust to major financial changes. There is still more we don’t know than we do know about the demands of healthcare reform, but the relationship of several expectations to existing programs provides some hints. 



. Accountable care organizations are one of the mechanisms planned to increase efficiency and reduce administrative costs. Of course we don’t have clear definitions yet of what it takes to qualify as an ACO, but so far they sound a lot like the Physician Hospital Organizations (PHOs) that cropped up in the 1990s as an effort to reduce costs by “aligning incentives.” Aligning incentives frequently meant the hospital employed physicians or otherwise integrated them under a PHO model. Many of these organizations foundered as hospitals learned that physicians as employees are less productive than they are in the private practice setting. In most parts of the country, the PHO concept failed to achieve the goals of improving care and reducing costs.  

 Preliminary ACO development activity has begun, although much of it seems to be concentrated in large multispecialty groups that would like to make sure they meet the structural definitions so they can be players in the new world of reform. In some parts of the country, radiology practices have moved to ensure an early place at the negotiating table. But overall, our specialty seems to have adopted a “wait and see” attitude. I expect the intensity of ACO development will vary widely from one market area to another (probably depending on the PHO local track record) and that radiologists may find it beneficial to be included, but will probably not be leading the charge. My recommendation? Pay attention to what’s going on, prepare to cooperate if it makes sense, but don’t be the drum major in the parade. 



. There is little room for argument regarding the growing emphasis on quality and patient safety. Radiology practices have generally been proactive in regard to accreditation and radiation safety issues, but as nonradiologist imaging facilities proliferated, ignorance of radiation safety sometimes crept in. In these instances, accreditation seems to have been viewed as additional “overhead,” especially when it represented a voluntary program with costs that did not result in additional revenue. 

 As of Jan. 1, 2012, accreditation of advanced imaging modalities is no longer optional, thanks to the Medicare Improvements for Patient and Providers Act of 2008. While itself not a product of healthcare reform legislation, the move to mandatory accreditation will help Medicare “thin the herd” of imaging service providers to reduce costs and is indicative of the types of changes likely to occur in the future. Again, physicians are inclined to agree with the emphasis on quality. Radiologists will no doubt applaud having the quality bar raised across the country. 

 What else can we expect? The Medicare Physician Quality Reporting Initiative (PQRI) is currently a voluntary program, with financial rewards tied to the submission of successfully completed indicators. Medicare’s website advises, “Eligible professionals will have the opportunity to use participation in the PQRI program to improve the care of the patients they serve through the evidence-based measures that are based upon clinical guidelines. Participating in PQRI is a way to prepare for future pay-for-performance programs.” The key words here are “Future pay-for-performance programs,” which are mentioned (but yet undefined) in the healthcare reform law. 

 With mandatory accreditation imminent and requirements for quality reporting increasing, what does it mean to the radiologist as a physician and small business owner? The costs of administrative overhead will continue to rise while reimbursements decrease. This isn’t a new song, but represents the addition of many new verses to the familiar tune of doing business in radiology. Theoretically, physicians should fare better as the promise of “insurance for all” is fulfilled. At the same time, however, payment restrictions are increasing and most growth is predicted to occur in Medicaid, the least desired insurance class.

Like many small businesses across the country, medical practices look to a future of great uncertainty. How do you plan for that? Most practices are hunkering down, slowing investments in new imaging equipment and business expansion while seeking ways to be more productive. Maximizing technology on the business side of the practice may free up staff time to maintain documentation and manage the accreditation and quality programs. Again, nobody argues with the goals of quality and patient safety but getting there without excessive duplication of effort needs to be a goal-and there aren’t signs that will happen. 




Ms. Kroken is a consultant and principal in Healthcare 

Articles

Healthcare reform is game changer but nobody can yet fully articulate the impact of the new rules. How do you plan for the future when there are so many unknowns? This is the second article in a series that examines how healthcare reform is likely to affect radiology practices and how they can prepare for drastic changes to come.

Surviving healthcare reform: Setting a strategic direction

We know healthcare reform will change the rules, but what can radiologists do now to be proactive? This is the first article in a series that will examine how healthcare reform is likely to affect radiology practices and how they can prepare for drastic change. 

 


 So far, few radiology practices, and none that I know of, have expressed relief that healthcare reform finally passed so we can offer services in the new, “more fair,” world where everyone will have health insurance. We don’t like the new regulations it will bring because we don’t like the unknown, and to date, government “help” has not done us many favors. We know that advanced imaging procedures have become targets because spending has increased rapidly and attempts to control its growth have not been successful, no matter how much reimbursement has been cut. 

 The behemoth of healthcare reform promises one thing for sure: our lives will change, both as business owners and as providers of healthcare services. When you consider the impact of the Health Insurance Portability and Accountability Act (HIPAA), which was all of 16 pages when passed into law, the thought of seeing more than 2000 pages roll out of Washington is overwhelming. Rather than simply run screaming into the night, what can we do right now to prepare for the future? 



. In order to minimize the impact of further fee reductions and increasing overhead, the time to begin ferreting out revenue leakage and reducing business costs is now. It isn’t unusual to “find” $250,000 to $500,000, and sometimes $1 million in a larger practice, in revenue that is being lost due to ponderous, outdated billing processes. (The radiology practice is one of the few businesses in the country that can lose that much revenue and still be in business.) 

 While billing and collections represent one of the more fertile areas for process improvement, it isn’t the only one. Most imaging centers focused on reducing costs as the impact of the Deficit Reduction Act ravaged profitability, but the emphasis was usually on the large-scale, more obvious areas, such as renegotiating equipment leases and maintenance agreements. Those are obviously excellent targets, but the second round of activity should focus again on those simple processes, such as scheduling, registration, and the entry/transfer of billing information. If there is duplication of effort, it costs in terms of increased error rates (and denials) as well as increased time, which usually equates to more people and higher overhead. Errors made at the front end of the revenue cycle result in delayed (or denied) payment and then ripple through the entire billing/collections process as numerous other people work to correct the problems and resubmit claims. 

 The goal of this exercise is to drastically improve efficiency and lower the cost of doing business so the practice can successfully weather future revenue hits. As much as we are supposed to be jumping up and down in glee at the thought of all the newly insured patients, healthcare reform can work only if costs are reduced, and that means increased denials and/or rationing of services. 



. The rules are about to change and one of them will impact practices fairly quickly as employers. Health plans will continue to raise the cost of premiums; they must to accommodate the requirement to cover preexisting conditions and other criteria imposed by new regulations. Healthy subscribers have always paid for the sick ones and now there will be more sick ones. And there are numerous predictions that the “young and healthy” will continue to opt out and pay the fines, which are still cheaper than insurance premiums. 

 It’s time for all of us to learn more about health plan options, and your insurance broker will be a good source of knowledge. The “you can keep your insurance plan if you want to” promise has some serious catches and there are severe restrictions on grandfathered plans. As a small business, it is incumbent on owners to make prudent decisions because costs could potentially escalate-or members of the group could suddenly find themselves with very different coverage options. This is no longer an “automatic renewal at the last minute” exercise. 

 Again, the goal at this initial phase is to become as lean and efficient as possible, increasing the effectiveness of the infrastructure while reducing the cost of doing business. The strong and flexible business entity has the best chance of weathering future economic storms. So while we wait for the specifics of new operational realities and the threat of the unknown, it can be time well spent. 




The next article will examine predictions about Accountable Care Organizations and other likely changes to the world of medical imaging, through not only healthcare reform, but related regulatory activity as well. 

Ms. Kroken is a consultant and principal in 

. She can be reached by e-mail at pkroken@comcast.net.

Business consultant Pat Kroken discusses the need to batten down the hatches before provisions of the healthcare reform bill blow in next year. She suggests ways to improve internal billing and collection processes and find lost money.

This is the third and final article in a series reviewing why and how radiology practices set themselves up to lose their long-held professional services agreements. 

Protecting your radiology contract: How did we get here anyway?

, how hospitals view “quality” from a business perspective, and 

Protecting your radiology contract: Quality from the hospital’s perspective

, preceded it. What steps groups can take to turn an adversarial relationship to a collaborative partnership is the subject of this third article. Included is a challenge to change how we conduct business, with the goal of long-term success for everyone involved. 




 For the hospital-based radiology practice, the ultimate success of the group is inextricably linked to the success of the hospital or health system. It’s true a certain amount of radiology business is almost guaranteed to come through the doors of the hospital emergency department, but we have long recognized the desired growth is in outpatient imaging. The outpatient arena is also the traditional battleground for imaging business. Just as radiologist-owned imaging centers have lost market share to entrepreneurial activity and former referral sources, the hospital outpatient business has been fertile ground for all competitive activity. 

 There are several common complaints voiced by radiologists when discussing their relationship to hospital administration: 

. If the top administrative post changes, most of the supporting roles do as well, and it seems to be happening more frequently. You can be assured somebody will be responsible for the profitability of the radiology department-for turning around what is viewed as an undesirable situation or improving performance in targeted areas. This can lead to either a this-too-will-pass attitude (often considered obstructionist) from the radiology group or frustration due to constantly reintroducing the group to a series of people revolving through the door.

. This may be related to changes in hospital leadership but can also represent the hospital’s reaction to shifts in national trends. It is manifested in the working relationship as, “Yeah, well they promised 

 six years ago, too, and never delivered, so why should we believe them now?” The perception once again is that the radiologists are not on the team and/or may be blocking progress rather than facilitating change.

 Demands may involve a disruptive physician, failure to comply with accreditation requirements such as critical results reporting, or complaints from technologists or medical staff. The situations are uncomfortable and easier to ignore than correct, so the practice leadership takes that easier path while complaining about micromanagement and the hospital’s insistence on making a big deal out of small issues. However, there is a hospital administrator who will take heat until these issues are resolved. Failure to resolve may also equal “career fatal” for that individual, so there will be a sense of urgency behind these requests.

Knowing hospital administrators have been willing to terminate long-standing relationships in today’s environment-some with high-quality physician groups-what needs to change in the common dynamic? How can a stagnant or adversarial relationship evolve to a collaborative effort that will be valued by hospital administration and move the radiology professional services agreement out of the spotlight? 

 The first step is an honest gut check. If you were to step back and view your business relationship from the eyes of hospital administration, based on the quality factors discussed earlier in this series of articles, how does your group fare? Where would you be on the continuum? 



 How far do you have to go to achieve “valued partnership?” How do you begin to make it happen? 

 Hospital administrators have proven receptive when the radiology practice initiates the following steps: 

 Request a meeting to discuss radiology issues and concerns

 and express a desire to establish a working committee to deal with them. At a minimum, this means having the radiology practice leadership set aside all history and complaints regarding the past. The goal is to start with a clean slate, an open mind, and the willingness to make changes as needed. Of course on that basis, it is fair to expect changes from both sides of the table.

 with representation by key decision-makers from both the hospital and the radiology group. Other players (hospital IT for example) can be added on an as-needed basis as specific service elements are addressed.

 Be willing to have difficult issues placed on the table

. This may involve anything from personnel behavior issues to business relationships, especially if the group owns imaging centers that compete for hospital business. (And it doesn’t matter if the previous hospital administration turned down the opportunity to participate in them).

 and expect it to move slowly. When compared with the agility of a radiology practice, hospitals move ponderously and must involve numerous administrative layers to correct what may seem like a very basic issue, such as efficient, user-friendly scheduling. However, this is the opportunity to correct infrastructure problems that are a source of frustration to the physicians and also represent market barriers in terms of functioning as a competitive entity.

 Expect to be asked to participate in business development activities

. For the most part, hospitals are willing to take the lead in terms of marketing but want to be assured the radiologists will offer strategic support. Since the link between successful marketing and day-to-day operations is critical, this again provides an opportunity to address poorly functioning hospital infrastructure processes.

 Commit fully to the success of the effort

. This means all radiologists in the practice support commitments made by physician leadership, even if it means changes in behavior from members of the group (or is a concession you personally would not have made). You will be judged on results-just as you will judge the hospital’s commitment to the relationship based on what gets done on its side.

The good news? Not all topics must be checked off the to-do list for the relationship to solidify on a new level. Progress will be recognized and long-standing tensions can be relieved early in the program as long as both parties work cooperatively to address common challenges. This also establishes a forum to address new issues while they are young and before they grow into large, emotionally charged problems. 

 This type of relationship may represent a new way of thinking for the old school radiology group. You know the group, the one whose members feel the professional services agreement is an entitlement and the hospital is lucky they show up for work each day. (While usually unspoken, this attitude is communicated clearly by the group’s behavior). 

 Times will continue to grow tougher for both hospitals and radiology practices. We have only begun to hear about the challenges ahead with healthcare reform, regulatory activity changing the rules of the game, and an economic climate that promises to tighten down further. The rough-and-tumble good old days, when there was a hefty profit in virtually every imaging venture, are gone. And a competitive marketplace, where teleradiology companies are adapting to take over radiology contracts, is in full play. Collaboration is critical, and if our hospital partners can’t find it in the current arrangement, they now have options to look elsewhere. 

 Our future as hospital-based physicians depends on better understanding where we are and where we need to be as valued business partners and then adapting to ensure mutual success. Those who fail (or refuse) to play by new, evolving rules can too easily find themselves discarded. 




This is the third and final article in a series reviewing why and how radiology practices set themselves up to lose their long-held professional services agreements. What steps groups can take to turn an adversarial relationship to a collaborative partnership is the subject of this third article. Included is a challenge to change how we conduct business, with the goal of long-term success for everyone involved.

Protecting your radiology contract: Steps you can take

This article is the second in a series reviewing why and how radiology practices set themselves up to lose long-held professional services agreements, how hospitals view “quality” from a business perspective, and what steps groups can take to turn an adversarial relationship to a collaborative partnership. Included is a challenge to change how we conduct business, with the goal of long-term success for everyone involved. 




 If you talk to any radiologist or practice manager about what makes his or her group unique, the answer is consistently “the quality of our physicians.” Groups typically seek to recruit from the top radiology programs in the country and many place a premium on subspecialty skills and training, often carefully crafting a service offering that meets a desired need for clinical excellence. 

 Not to diminish the physician emphasis on quality, but if you step back to look from the viewpoint of radiology’s customers, competent physicians are an assumed component. Hospital professional services agreements and/or credentialing requirements usually specify board-certified radiologists, and the expectation of highly competent physicians exists until evidence to the contrary emerges. Referring physicians and patients anticipate top clinical quality as well, so again, this is an assumed baseline. 

 How then, does a hospital measure quality? The answer is likely to be right there in most professional service agreements, providing they have been dusted off and updated within the past 10 years or so. And even if they are not addressed in the hospital contract, quality concerns are defined on a fairly regular basis by hospital administration-although these expectations are often interpreted as trivial griping and, therefore, frequently dismissed. In other words, there are specific service elements important to our hospital customers, some of them defined by accreditation bodies such as the Joint Commission, some by regulatory requirements, and others as an attempt to prevail in a competitive marketplace. 

 While the priority list may vary from one healthcare entity to another, there is some consistency and it’s reasonable to assume the following issues will be included: 



. The issue of “critical results reporting” is a Joint Commission mandate and involves not only the prompt turnaround of written radiology reports, but calling results when indicated. The hospital will include an emphasis on getting final reports signed and will frequently have standards against which performance is measured. Hospital complaints in this area are usually associated with only a few physicians in the group who are chronic offenders. 



. A Q/A overread program may be a requirement of both accreditation organizations and hospital bylaws. There is always an expectation that the hospital will demonstrate an active and effective Q/A program, including a method to follow up on problem cases. The criticism of hospital administrators often has to do with inconsistent participation from all members of the group (rather than whether a program exists). And, once again, it’s likely only a few physicians in the group place the entire practice in the spotlight. 



. Every group in the country can probably identify the radiologist the techs and staff avoid or who is most likely to say, “I’m too busy, take it to Dr. X.” Over time, such behavior adds up in the negative, especially as it impacts department throughput and staff morale. Everyone will react to stress from time to time (and be forgiven), so this is more about group culture and attitudes toward nonphysician personnel. It is easy for a group to ignore the results of referring physician, internal (emergency department for example), and staff surveys as just another nuisance activity. But rude behavior and resistance to administrative processes are ultimately detrimental. The tendency to ignore bad behavior is common and these situations are unpleasant to resolve, but more groups now recognize the liability associated with failure to correct problems that involve a small minority of physicians. 



Participation on medical staff committees

. It takes only a few conversations with hospital administrative staff to learn their perception of radiologists is that too often the only meetings they show up for are capital budget meetings, where they then expect to receive most of the available funding for new equipment. Failure to participate in hospital initiatives and on committees is seldom the primary reason for hospital dissatisfaction but will be listed when the litany of “service issues” ultimately hits the fan. 



Other administrative/medical director duties

. If you haven’t pulled the professional services agreement from the file in some time, it would be worth reviewing other administrative expectations. They may include developing joint process-improvement initiatives, participating in the implementation of new technology, conducting educational sessions for technologists and medical staff, or assisting with marketing/business development activities. Too often these activities get lip service for a year or so and are thereafter ignored. 

 The saddest thing about this dilemma is that a highly competent radiology practice, one with “quality” radiologists, can lose a contract over basic service issues, nonphysician interpersonal relationships, or other common administrative expectations. And it cannot be overstressed that the behavior of only a few physicians in the group can jeopardize the stability of an entire practice. You probably know their names. 

 If the hospital moves from being perceived as a golden goose to being considered the practice’s largest customer, what changes would we make to ensure a long, mutually successful business relationship? 




Next: What does it mean to partner with your hospital in practical, operational terms? Previous article: 