Here are 10 proven ways to profit from gastroenterology in 2011.
1. Open doors on evenings or weekends. Add hours to the end of the day or open the facility on weekends. Barry Tanner, president and CEO of Physicians Endoscopy in Doylestown, Pa., says his company manages several facilities that have regular Saturday hours. "Weekend hours for a busy facility can prove very successful," he says. "They are great for patients." Saturday hours, which typically are limited to mornings, are routinely the first slots to be booked for the whole week, he adds.
Extending hours of operation at Berks Center for Digestive Health in Wyomissing, Pa., has allowed patients to come in later in the day, according to John Gleason, the administrative director of the center. The center has also added weekend hours. However, a center would have to have enough volume to stay open through the afternoon to be open in the evenings, says Eric J. Woollen, vice president of managed care at Practice Partners in Healthcare, based in Birmingham, Ala. "It would not be practical to send staff home for a few hours during a lapse in cases and have them come back in the evening," he says. "Since GI centers can start as early as 6 in morning, volumes would have to be pushing the seams to go into the evenings."
When all is said and done, GI centers must have high volume to survive, Mr. Woollen adds. "For a single-specialty GI center, volume drives reimbursement," he says. Mr. Tanner agrees. He calculates that if a GI procedure room operated just eight hours a day, it would produce about 16 cases per day or roughly 4,016 cases per year. "While full utilization is usually not possible, due to cancellations and no-shows, it is certainly reasonable to aim for 80 percent utilization or about around 3,200 cases annually," he says.
2. Stay single-specialty. Mr. Tanner is a proponent of single-specialty GI centers. "We still believe that single-specialty has the advantage of efficiency and quality from many perspectives, including staffing, block-scheduling, training, equipment and supplies, patient satisfaction and benchmarking," he says. "Many of these issues will be even more key as healthcare continues to evolve and accountable care organizations gain traction." As ACOs attempt to manage the full cycle of care for each type of patient, they will need to bundle GI patients in practices with the procedures they receive in GI ASCs.
Multi-specialty centers may be less efficient, he adds. "Mixing utilization with specialties that have longer OR times makes it more difficult to schedule efficiently," Mr. Tanner says. GI cases such as colonoscopy and EGD usually last 15-30 minutes and recovery lasts about 45 minutes, but orthopedics or podiatry procedures can take much longer. Single-specialty can also help attract GI physicians. "All things being equal, would a GI physician rather be in a single-specialty GI facility if that opportunity exists? I think that the answer would be a definite yes," he says. "However, from a physician recruitment standpoint, I don't believe that physicians will chose to practice in any particular area simply due to the availability of a single-specialty ASC."
Mr. Woollen believes both single-specialty and multi-specialty scenarios can be successful for GI. "This is one of those cases of 'flip a coin, pick heads or tails,' " he says. "If the current physician-utilizers are maxed out in the volume of cases they are bringing to the ASC and you still have open time, then you may want to consider adding a specialty. A GI case doesn't pay as well as say an orthopedic case." But he added that the projected volume and reimbursement of a new specialty has to be worth buying the new equipment and training staff to handle the cases. "If you are a high-volume GI center and you are efficient, you may not need to bring in another specialty," Mr. Woollen says. "Single-specialty ASCs can take advantage of synergies and run efficiently. It is less complicated." These centers have the same types of cases, same expectations and same turn-around times.
3. Market colonoscopies. Under the healthcare reform law, insurers are required to cover the entire cost of screening colonoscopies, but do most Americans know that? "We are beginning to see an increase in marketing in general," Mr. Tanner says. "Marketing definitely does have its place and we know that it can have a positive impact." Much of colonoscopy marketing would be done at the practice level because the focus is on making patients aware of the need and the care that GI-physicians provide.
Mr. Tanner believes marketing can be implemented in part through e-mail and social media. "In today's information age, characterized by instant feedback, I believe that up-to-date patient-communication portals are the key," he says. "As healthcare changes, and as patient awareness grows and patients do more homework on their own, prior to consulting with a physician, I believe physicians are starting to see a need for remaining relevant in today's electronic age."
ASCs should perform community outreach, looking into the areas of the community that are not getting screened for colon cancer, according to Rick Jacques, president and CEO of Covenant Surgical Partners. Marketing will be a challenge, however. A report in the Archives of Internal Medicine found that sending email messages and Web-based risk assessment tools to patients about colorectal tests and even following up with phone calls had only modest success.
4. Renegotiate payor contracts. GI-negotiators advise that many payors, if pressed, would agree to increase their fees, especially if the facility can demonstrate high quality. "I simply believe that all contracts should stand on their own," Mr. Tanner says. "While there are numerous elements of all contracts that are similar, rates can vary geographically and demographically, based upon several factors that are not directly tied to CMS reimbursement."
While Medicare payments to GI centers fell in the past four years during the phase-in of the Outpatient Prospective Payment System, many private payors stayed with the old grouper system to pay GI ASCs. This has been a godsend to GI centers. "We try to avoid any third-party payor contracts getting linked to Medicare OPPS," Mr. Tanner says. Mr. Woollen cautions that centers need to make sure that contracts that stay with Medicare groupers need to account for inflation since 2007, when the groupers ended. "Read the contract carefully to make sure it isn't referring to current Medicare rates and always research your costs," he says. If the payor wants to switch to OPPS, "remind them that other procedures, such as general surgery and pain management, are also in that group," he says. "If you lower the whole category you're going to penalize other specialties as well."
When GI centers negotiate for groupers, their biggest selling point is that their costs are much lower than the hospital's. In fact, at Northwest Michigan Surgery Center in Traverse City, Mich., the price of a colonoscopy is about half that of the local hospital, according to CEO Jim Stilley.
5. Sign up more GI physicians. "Gastroenterologists have an incentive to become partners in an ASC if they have not already done so," Mr. Woollen says. With Medicare reimbursements falling, "GI docs want to find a way to earn those revenues back," he says. "Give them a trial run. They can come in, do some procedures and see how it works. But if they bring in only five cases a month and you need 20 cases, it may not be a good fit." If these physicians do work out, Mr. Tanner says they might be fast-tracked to ownership status, giving them a firm stake in the enterprise. "We often see ASC ownership being made available to physicians in the first one to three years, but it can be quite variable," he says. "In areas where it is particularly difficult to recruit, we tend to see shorter wait times to ASC ownership." The physician can earn a substantial amount of ancillary income from an ASC ownership, sometimes as much as he earns in professional fees, according to Mr. Jacques.
"Unaligned gastroenterologists are still out there, but overall, the pool has been shrinking," Mr. Woollen says. "There are not many left who have not already invested in an ASC or joined a hospital system. However, some practicing physicians may relocate to the area and newly graduated physicians may arrive." Newly minted physicians tend to join existing groups. "If the partnership is expanding, the ASC can benefit," he says.
6. Engage your employees. An ASC that engages employees can help the center reach optimum levels of efficiency. This can be done through frequent staff meetings, engaging in staff recognition and openly encouraging physician participation, Mr. Tanner says. OR teams who work closely with physicians can reach optimum efficiency levels. "The physicians are typically very busy and often not very proactive in terms of team-building and staff-management," he says. "The ASC administrative team needs to establish the overall tone of the facility and work constantly to set a positive example and to reinforce the style, the character and the overall atmosphere of the ASC." For example, Kendall Endoscopy and Surgery Center in Miami provides opportunities for physicians and staff to socialize and create strong bonds, such as at yearly holiday parties.
7. Improve patient satisfaction. Patients' opinions about the care they receive "are almost always heavily influenced by how they are treated at the front desk right through to recovery and discharge," Mr. Tanner observes. "It is the interactions they have all along the way that help them to judge the quality of care." That first 30 seconds when the patient walks through the door can often be the determining factor. "Much of this is well within the control and responsibility of ASC administration," he says.
In satisfaction surveys, patients often provide thoughtful suggestions to help the ASC improve, Mr. Woollen says. Patients' criticisms can turn into useful advice. One example might be a patient saying he did not have a separate room to discuss issues, which is an important consideration in complying with the HIPAA privacy law. When reviewing patients' responses to surveys, "look for good ideas," he says. He adds that patient satisfaction surveys are moving from paper to digital format, which gets a slightly higher response rate, with about one-third of surveys filled out and returned.
8. Reach out to referring physicians. Affiliated GI practices should be encouraged to reach out to primary care physicians who refer cases to them. "Ease of patient referrals is a major concern," Mr. Tanner says. "The professional practice should be tracking and carefully monitoring physician referral patterns." When referrals become difficult, wait times lengthen and patients complain about how they were received. "This can have devastating effect on referral patterns," he says. To address this problem, some GI practices have designated "practice representatives" who work as liaisons with primary care practices, he says. The representatives stay in touch with referring physicians and their staff and assist them to make the patient experience a great success.
9. Work with the hospital. Mr. Tanner says GI-driven ASCs need to develop closer relations with hospitals. In past years, "many ASCs have prospered by removing case volume from the hospital," he says. "Now I believe there is a need for a more cooperative and collaborative relationship with the hospital that involves more coordination of care."
With the advent of ACOs, hospitals may reach out to ASCs to build partnerships, he says. But even if they don't join ACOs, hospitals have developed a fair amount of market power. In markets with significant physician employment at hospitals, "the hospital is a formidable influence on referrals," Mr. Tanner says. "This trend cannot be ignored. Nor can one of the underlying motivations of the hospital, control over referral patterns. Determining strategically how to work with and interact with the hospital and its employed physicians may become a critical survival factor." Mr. Woollen agrees that relationships with hospitals have become more important. "Because hospitals now have many primary care physicians, it's important to reach out to them," he says.
10. Consider a joint venture with a hospital. Hospitals have been forging joint ventures with surgery centers, even acquiring total ownership and turning them into hospital outpatient departments. But when converting to an HOPD, gastroenterologists lose their entire ownership share and thus give up an important alternative source of income. Joint ventures with hospitals, on the other hand, can be promising. "We have a GI center in the hospital space," Mr. Woollen says. "It takes an enlightened hospital to partner in one and it can be an tricky relationship for a surgery center unless the hospital agrees to be a partner."
Mr. Tanner adds: "We now actively seek ways to partner with the hospital while still retaining physician independence. There need to be physician-controlled incentives to deliver highly efficient high-quality care."
Mr. Woollen warns, however, that it may not be possible for a partnering ASC to share the hospital's substantial leverage in managed care contracts. If the center is under a separate tax-identification number from the hospital, the insurer will probably require a separate contract. "The decision is up to the insurers," he says, "but they are not going to want to pay hospital rates to an ASC if they can help it." The center can, however, use the hospital's leverage for other payor issues, such as overcoming payment delays and getting the responses to its queries, he says.
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