Optimizing Your Practice Through Service Values

1. Optimizing Your Practice Through Service Values Jonathan W. Berlin MD, MBA ARRS 108th Annual Meeting Business & Practice Management Seminar April 13, 2008

2. Disclosure of CommercialInterest Neither I nor my immediate family members have a financial relationship with a commercial organization that may have a direct or indirect interest in the content of this presentation.

3. Presentation Overview • Changing Landscape: Increasing Patient Consumerism, Quality as A Prerequisite • Quality and Service • Differing Perceptions of Patients & Providers • Quality Versus Loyalty • Their differences & Importance of Loyalty • What Does This Mean for Radiology?

4. Changing Healthcare Landscape • The healthcare landscape is changing • Gradual shift from employee based healthcare insurance to greater individual choice, and expense. • Greater co-pays and deductibles • More non-covered healthcare services.

5. Shift in Healthcare • “Traditionally, employers selected health care products for their workers and paid for most of the services. • Increasingly…those costs are being passed on to individuals, who now decide what products to buy, as well as where, when, and how to buy them.” http://www.mckinseyquarterly.com/article_page.aspx? ar=1951&L2=12&L3=63&srid=17&gp=0 Accessed 3/15/07

6. Increased Expenses Are Driving the Change • “The underlying force propelling (the movement toward increasing individual responsibility) is medical inflation, which is rising two to three times faster than general inflation, so companies are increasingly reluctant to bear the full cost of health care.” http://www.mckinseyquarterly.com/article_page.aspx? ar=1951&L2=12&L3=63&srid=17&gp=0 Accessed 3/15/07

7. Increasing Healthcare Costs for Corporations • General Motors now spends about $1,525 on health care for every car it produces - or roughly $6 billion in 2005. • Ford spends more on health care than on steel • Starbucks spent more on health insurance for its employees in 2005 than on raw materials needed to brew coffee. http://www.rightreality.com/articles/ health_care_neither_you_nor_your_company_can_afford_it.html Accessed 4.9.07

8. Increased Utilization of Imaging • On average, between 1998 and 2001, utilization per Medicare enrollee increased 16% per year for MR imaging and 7%–15% per year for CT, US, interventional radiology, and nuclear medicine, while that for radiography increased 1% per year. • Which radiology procedures cost more? Radiology 2005;234:824-832.

9. Utilization of Radiology Services is Increasing • Diagnostic imaging services paid under Medicare’s physician fee schedule grew more rapidly than any other type of physician service between 1999-2003. • Evaluated another way, the average growth of physician services during this period was 22% -- for imaging it was 45%. http://www.medpac.gov/publications/congressional_testimony/031705_ TestimonyImaging-Hou.pdf, Accessed 12.4.07

10. Percent Growth in Medicare Spending Per Beneficiary Controlled for Price, 1999-2003 http://www.medpac.gov/publications/congressional_testimony/031705_ TestimonyImaging-Hou.pdf, Accessed 12.4.07

11. Increasing Co-Payments and Out of Pocket Expenses • Increasing corporate expenditures can be addressed by increasing out of pocket expenses for healthcare. • People who have to pay for their healthcare use less and are more discerning.

12. Percentage of Healthcare Expenses in Individual Hands • “By 2011 the fate of $550 billion to $600 billion of premiums will be in the hands of individual decision makers, not employers or the government.” • McKinzie Quarterly, March 2007

13. Trends To Individual Spending Producing Greater Transparency • This is leading to trends to facilitate decision making for healthcare consumers • These changes include: • a greater emphasis on healthcare quality • transparency of health care quality & outcomes data • Transparency of price data

14. Mission of the US Dept. HHS Value Driven Website • Health care transparency provides consumers with the information and the incentive, to choose health care providers based on value. • Consumer choice…motivates the entire system to provide better care for less money. http://www.hhs.gov/transparency/ Accessed 3/7/06

15. Is This Change Irreversible? Don’t Rely on Government • “It is highly unlikely that the health care system will ever return to a more wholesale environment. • The biggest impediment is the under-funded Medicare liability of $30 trillion—more than 2.5 times the US gross domestic product. • This liability makes it extremely difficult for any government to assume responsibility for rising health care costs.” http://www.mckinseyquarterly.com/article_ page.aspx?ar=1951&L2=12&L3=63&srid=17&gp=0 Accessed 3.15.07

16. Where Does Radiology Fit In? • Radiology co-pays are increasing at the same time that consumers are becoming more conscious of quality and service. • Our insurance: outpatient radiology services only covered at 90% in 2008, 95% in 2007, and 100% in 2006 • How is radiology responding? Imaging Economics February 2007 p. 35

17. Quality as Measured by Radiologists • Quality as Measured by Radiologists: • Appropriate Ordering by Clinicians (ACR appropriateness criteria) • Protocol Selection: Type of Protocol and Contrast Usage Adapted from Mayo Clinic Radiology Quality Map Events and Metrics, Imaging Economics February 2007

18. How Radiologists Measure Quality • Patient Examination: Complication Rate • Interpretation of Exam: Accuracy, Standardized Report, Usefulness of Information in Report to Clinicians • Finalization of Report: Typographical or Textual Error Rate in Report, Timeliness of Report Signings Adapted from Mayo Clinic Radiology Quality Map Events and Metrics, Imaging Economics February 2007

19. Adapted Mayo Clinic Quality Map • Is Communication to Referring Physicians Accomplished in a Timely Manner? Are Referring Physicians Satisfied with the level of Communication? • Outcomes: Is the Health Outcome Improved for Patients? Adapted from Mayo Clinic Radiology Quality Map Events and Metrics, Imaging Economics February 2007

20. The Essential Nature of Quality • Quality Measures such as these are ESSENTIAL for any radiology practice, and they are admirable as well. • Swenson: Three Reasons for Greater Attention to Quality: • Differentiation Among Providers • Quality Measures Will Increasingly Be Required by Payers • Moral Imperative: The Physician’s Role Quality: The Differentiator in a Flat World, Imaging Economics February 2007

21. Quality Measures • Quality Measures will Increasingly Become a Prerequisite for Radiology Practices • They are essential for survival and not optional • However…are they enough??

22. Lingering Questions About Quality and Health Care • To examine this question requires asking some additional questions: • Do patients and Health Care Providers have the same means and experience to assess quality? Do they measure the health care experience the same way? • Are adapting quality measures enough, or should health care organizations also pay attention to other factors such as patient “experience”?

23. 2006 Airline Quality Rating 2006 Airline Quality Rating http://aqr.aero/aqrreports/AQR2006final.pdf Accessed 3/7/07

24. 2006 Airline Quality Rating • Flights On – Time • Denied Boarding • Mishandled Baggage • Customers Complaints: Over sales, Fares, Refunds, Animals, Customer Service, False Advertising, Discrimination, Reservations / Ticketing / Boarding 2006 Airline Quality Rating http://aqr.aero/aqrreports/AQR2006final.pdf Accessed 3/7/07

25. What is Missing From This Rating System?

26. Airline and Airplane Safety Data is Absent • Airline Safety Data • Number and Frequency of Crashes • Number and Frequency of Near Misses • Number of Fatalities and Injuries from Crashes • Airplane Safety Data • Age of Airplane Fleet • Maintenance Records of the Fleet

27. Pilot Safety Data is Missing • Pilot Safety Data: • Age and Experience of Pilots • Number of Pilots in Airline with Substance Abuse Problems • Exam Scores of Pilots • Age and Type of Simulator Equipment Airline Pilots Trained On

28. Reasons For Airline Data To Be Missing • Why is airline safety data missing? • Because it is not really questioned by customers. As a generalization, customers assume competency of the airline, the pilot, and the equipment. • Other Industries are Similar to This – Competency is Generally Assumed • Auto Industry: When we rent cars do we specify those with low crash rates? • Elevators / Escalators • Bridges / High Rises / Balconies / Porches / Fire Safety

29. Patients Do Not Measure Efficacy • In the same manner, healthcare quality data is not as readily accessible by customers for clinical efficacy or outcomes. • That doesn’t mean it’s not important – it only means that customers notice other qualities as well, and these other qualities impact on them, sometimes in a more personal and up-front manner.

30. Efficacy Versus Experience in The Hospital Setting • “Hospitals spend their efforts in clinical results and process improvement (which) can be measured objectively. The patient, however, judges quality by his or her perceptions, something that … cannot be verified in the same way as outcomes. The patient is judging the overall experience of being in the hospital.” Lee F. If Disney Ran Your Hospital, Second River Healthcare Press, 2004

31. Importance of Experience • “Patients will make clinical decisions based on non-clinical information.” • Case of the “Dead Fish” in the waiting room aquarium – the patient thinks, “If they can’t take care of a fish, how can they take care of me?” Gabriel BA. Your Complete Guide to Patient Service, Physician’s Practice, March 2008

32. Is Proven Clinical Efficacy Enough?

33. Experience and Service Increasingly Important • “I’ll tell you what keeps me awake at night. The quality of our clinical care is …proven and we’ve been able to attract patients from great geographical distances because of it. But…all our trend data shows that consumers are becoming more demanding and will continue to be. It’s in our best interests to offer the service levels and experience that patients are starting to seek.” • Phyllis Marino, Associate Director of Marketing, Cleveland Clinic http://www.interplaygroup.com/docs/Beyond_Patient_Satisfaction_ An_Interplay_Whitepaper.pdf Accessed April 2007

34. How are We Doing? • How are health care organizations and providers doing in addressing the patient experience?

35. Quality and the Patient’s Perception – The Case of Gerald • “Too often when I speak with my son’s doctors, we end up talking about him as if he’s not even there. (At one) doctor visit…his pediatrician was so clearly pressed for time that she worked on (my son) like she was part of a race-car pit crew.” Cullen T. The Wall Street Journal. 2/22/07. Putting “Care” Back in Health Care

36. The Subjective Nature of The Health-Care Experience • “It’s rare that I walk away from one my family’s doctor appointments or dental visits with a good feeling. It’s not that my family is in poor health or that we’re not receiving proper treatment. Rather, it’s feeling that our health-care providers just don’t have time to care about my family.” Cullen T. The Wall Street Journal. 2/22/07. Putting “Care” Back in Health Care

38. Introducing Patient Loyalty • Why is the patient experience important? • Because it correlates to patient loyalty. • Loyalty: A patient's likelihood to return to a healthcare facility (Gallup) http://www.bartleby.com/61/44/L0274400.html Accessed 4.9.07, www.gallup.com Accessed 4.9.07

39. Examining Customer Loyalty Economics • Two companies: one with customer retention rate of 95%; the other with retention rate of 90% • Both companies acquire new customers at 10% per year • The company with 95% customer retention increases net customers by 5% per year and can double in size in 14 years; the company with only 90% customer retention does not change its customer amount in that same time. Reichheld FF. The Loyalty Effect 1996 Harvard Business School Press

40. The Loyalty Effect • 1. Loyal customers insure steady growth • 2. Sustainable growth enables the organization to attract and retain the best employees • 3. Loyal employees reduce costs and improve quality • 4. Loyal customers insure steady volume so that profits can be put back into the system Reichheld FF. The Loyalty Effect 1996 Harvard Business School Press

41. The Importance of Loyal Patients • Healthcare may be different than the car business • However, it does stand to reason that loyal patients will seek further care, if needed, at the same facility. • Additionally, loyal patients have the power to suggest referrals, increasing business.

42. Measuring Loyalty • The question then becomes: • How do we measure loyalty? • Among our patients • Among our staff • How do we increase loyalty? • Among our patients • Among our staff

43. Physician – Patient Relationship Most Important Factor • The overwhelmingly powerful determinant of patient satisfaction and loyalty in the group practice setting…is the interaction between the patient and the physician. Our studies have shown that this factor does more to explain patient satisfaction and loyalty than all other factors combined. The Satisfaction Monitor Jan/Feb 2001 Drivers of Patient Satisfaction in the Group Practice Setting Jerry Seibert, MA, President - Parkside Associates http://www.pressganey.com/products_services/readings_findings/satmon/article.php?article_id=186 Access 3/7/07

44. Increasing Patient Contact in Radiology • What does this mean for radiology? • How often do we introduce ourselves to patients? How often do we call patients with results? How often do we go over exams with patients? • Have we ever had experiences with patients where they were upset that we called them? • Should we be increasing our patient contact? • Could these changes foster patient loyalty?

45. Patient Preferences for Test Results from Radiologists • Over a 10 day period at University of Texas, patients in body imaging, mamms, and ultrasound were asked the following: • Did they want the radiologist to tell them if the results were normal • If the results were abnormal, did they prefer to hear the results from their primary care doctor or did they feel entitled to an immediate explanation of their test results. • 92% of patients wanted the radiologist to tell them if the results are normal. • If the results are abnormal 87% wanted the radiologist to tell them. • CONCLUSION. Most patients prefer to hear the results of imaging examinations from the radiologist at the time of the procedure rather than to hear them later from the referring physician, regardless of the findings. Disclosure of imaging findings to patients directly by radiologists: survey of patients' preferences. AJR Am J Roentgenol. 1995 Aug;165(2):467-9

46. Patients and The Internet • According to recent surveys, approximately 79% of patients have internet access • Of those, 70% would like to have access to their medical test results on line. • Are we as radiologists doing enough to communicate with patients? Gabriel BA. Your Complete Guide to Patient Service, Physician’s Practice, March 2008

47. Things To Think About For Radiology? • Does the average patient in our department: • Know what a radiologist is? • Know who is interpreting their study? • Talked to any of the radiologists in the department?

48. Prerequisites for Adequate Care • “As with non-healthcare industries, the number one reason for patient dissatisfaction is lack of courtesy, respect, and attention... Merys RM. The Importance of Service in the Healthcare Setting: Building a Patient Friendly Practice. Medical Group Management Association

49. Zagat and Wellpoint Physician Evaluation System • Zagat Survey and Wellpoint Health Insurance launching free on-line consumer ranking of doctors available to select members in its Blue Cross and/or Blue Shield licensed subsidiaries. • Qualities doctors will be evaluated on: • Trust • Communication • Availability • Office Environment http://www.chicagotribune.com/features/chi-1104_zagat_d_r_nnov04,1,1307466.column Accessed 11/5/07 http://phx.corporate-ir.net/phoenix.zhtml?c=130104&p=irol-newsArticle_general&t=Regular&id=1065430& Accessed 11/5/07

50. Wellpoint – Zagat Collaboration • The four qualities of trust, availability, communication, and office environment mirror the Zagat restaurant guide of food, décor, service, and cost • The rating system is “solely designed to reflect a consumer’s experience with a physician and not to reflect the quality of the care they received.” • “It gives consumers the power to make smart decisions about selecting doctors based on other people’s experiences.” Nina Zagat http://www.chicagotribune.com/features/chi-1104_zagat_d_r_nnov04,1,1307466.column Accessed 11/5/07 http://phx.corporate-ir.net/phoenix.zhtml?c=130104&p=irol-newsArticle_general&t=Regular&id=1065430& Accessed 11/5/07 http://www.usatoday.com/money/industries/health/2007-10-21-wellpoint-zagat_N.htm Accessed 11/5/07