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POSITIONING YOUR PRACTICE FOR SUCCESS / SURVIVAL: MEETING THE CHALLENGE. Bob Orzechowski , MBA, SPHR Chief Operating Officer Berks Hematology Oncology Associates, Ltd . West Reading, PA roberto@berkshemonc.com ( tel ) 610.374.4404 ext. 111. OBJECTIVES.

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positioning your practice for success survival meeting the challenge
POSITIONING YOUR PRACTICE FOR SUCCESS / SURVIVAL: MEETING THE CHALLENGE

Bob Orzechowski, MBA, SPHR

Chief Operating Officer

Berks Hematology Oncology Associates, Ltd.

West Reading, PA

roberto@berkshemonc.com

(tel) 610.374.4404 ext. 111

objectives
OBJECTIVES

After This Session You Should Be Able To:

Identify the Primary Business Management Challenges in a Private [Hem-Onc] Medical Practice

Identify Potential Tools & Interventions to Address Those Challenges

Recognize Linkages (interrelationships) Between the Various Components of the Business, the Necessity & their impact on the enterprise

slide3

OBJECTIVES continued…

  • Discuss specific examples of successful and less successful strategies & tactics
  • Respond adequately to questions and concerns
4 universals of any organization
4 UNIVERSALS OF ANY ORGANIZATION
  • MISSION - What do we want to accomplish?
  • PEOPLE - HUMAN CAPITAL - the cumulative skills and knowledge of employees
  • STRUCTURAL CAPITAL - the physical and intangible assets (systems, databases)
  • PROCESSES - how it all happens
it s a business but
It’s a Business, but……..

“The soul of practicing medicine is a solemn social contract under which patients surrender themselves to us and trust us to do what is best for them.”

  • Joseph Simone, M.D.

US – “right vs wrong”

THEM – “win vs lose”

positioning
POSITIONING
  • A Strategic Concept
    • Good tactics will not compensate for a bad strategy
  • A Process To Envision And Realize The Future
  • Leadership & Management Imperative
the five tasks of strategic management

THE FIVE TASKS OF STRATEGIC MANAGEMENT

1. DEVELOPING A CONCEPT OF THE ORGANIZATION AND FORMING A VISION OF WHERE THE FIRMSHOULD BE HEADED (THE MISSION: defines purpose & direction, determines priorities, reflects values)

2. TRANSLATING THE MISSION INTO SPECIFIC LONG-RANGE AND THEN SHORTER-RANGE PERFORMANCE OBJECTIVES

3. CRAFTING A STRATEGY: (Where does the organization want to be?)

4. IMPLEMENTING A STRATEGY: (How can the organization get to where it wants to be?)

5. EVALUATING PERFORMANCE AND INITIATING CORRECTIVE ACTION: (How will the organization know when it has arrived?)

slide8

BHOA's mission is to provide the highest quality health care in our sub-specialties of medical oncology and hematology.

BHOA values honesty, integrity and respectful behavior in all our dealings with each other, patients and all other stakeholders.

bhoa background
BHOA BACKGROUND

42 years of caring

5 physicians & 4 Physician Assistants

EMR in 2004; continuous investment in IT

Pharmacy & inventory mgmnt systems

Practice Mgmnt. & analytics software

IT Infrastructure – intranet, cable modems, DSL, hardware, supportive perihperals

inbound / outbound digitized faxing

all in-office, lab & hospital interfaces

1990 – 2004: 7,800 sq. ft. & 17 chairs

2005: 32,000 sq. ft. & 37 chairs & beds

more background
MORE BACKGROUND

700 + Payers or plans

50% Medicare

15% HBS

15% CABC

7% non-risk bearing local PPO

7% MA & Uninsured – We See Everyone

P&T Committee

Coding Committee

Clinical Trials Program

In-House (“retail”) Pharmacy

No Hospital “Turfing” Option

still more background
STILL MORE BACKGROUND

14 FTE RNs - in infusion suite

2003-05: from 55 FTEs to 65 FTEs

2006 - 07 TURNOVER = .05, or ½ %

2008 T/O = 1%

2009 T/O = 10%

2010 T/O = 1%

slide12
Lab – CMP, Tumor Markers, CBCs, etc.

DRO = 22 - 30 days

Gross revenue up 5% - CY09 –CY10

Net revenue even

Drug costs up 10%

Payroll ratio decreasing from10% to 8%

Most other non-drug costs decreasing

No “Brownbagging”

bhoa the what or how
BHOA: THE WHAT or HOW

BASIC USMC MODEL FOR LEADERSHIP

Sense of Mission – Important, Urgent

Aligned Values – Ours & Yours

No Peacetime – Caring Never Stops

Excellence, not Perfection

Constant Learning & Training; Invest in People

Adequately Equipped; Low & Hi-tech

Autonomy & Accountability

“LADIES & GENTLEMEN WORKING WITH LADIES & GENTLEMEN”

more what or how
MORE WHAT or HOW

Respect - Involved, Listened to

No “ Witch Hunts”:

Flexibility & Accommodation

Empowered - Autonomy & Discretion

Constant training, & info flow

Coupled with Accountability

Reliance & Trust - To do the Right Thing

Recognition & Celebrations

common practice management challenges in medical practices
COMMON PRACTICE MANAGEMENT CHALLENGES IN MEDICAL PRACTICES

1. Quality Care - complexity. It is increasingly difficult to provide guideline based care profitably: Increasing options & variables for treatment

Prognostic/predictive factors

Oral oncolytics and medication management

Aging population, Chronic conditions

Fragmented or limited information exchange among stakeholders

Technology – the medical science, labs, EMR, data & information flow, infrastructure design / re-design

slide16
Other Quality challenges -operational or physical:
  • Long lead times for new patient appointments
  • Habitual patient rescheduling
  • Inadequate employee training, SPV. & support
  • Low levels of privacy
  • Dosing errors and waste
  • Unreasonable patient wait times
  • Inadequate infrastructure and other physical plant constraints
slide17
2. HR: Productivity & Performance Management

Leadership, Management & Organization

  • Compliance with laws & regulations
  • Creating & maintaining a culture where trust, open communication & respect are expected and enforced
  • Workflow & processes designed & managed
slide18
3. Financial Management
  • Affordability- cost structure managementFigures as a % of non-Dr. costs

80% -Drugs

9% -non-Dr. (non-Provider) payroll

1.7% -Med-Surg

1.6% -Rent

1.0% -Health Insurance

.9% -Payroll taxes

  • So, about 5% (monetized)of all non-Dr. costs are available to budget for all other non-Dr. expenses
  • You can not cost-cut your way to prosperity
slide19
3. Financial Management – cont’d

Higher administrative (indirect)costs

  • Payorrequirements (pre-auth. Specialists, )
  • Regulations – HIPAA, HITECH, Compliance, eSecurity
  • Technology and staff resources required to provide clinical decision-support in the caregiving process.
slide20

COMMON PRACTICE MANAGEMENT CHALLENGES IN MEDICAL PRACTICES

  • 4. Revenue Cycle Management (THE “TOP LINE”)
    • Limited service line portfolio
    • No pay @ time of service – cash flow impact & higher admin. costs
    • Failure to properly intake patients, pre-auth Tx & counsel patient
    • Maintain coding & documentation competencies
    • Complete charge capture
    • Complete & timely follow-up on claims held or rejected
    • Adequate & enforced A/R and collection policies
    • Optimal & managed fee schedule & payer contracts
slide21
4. Revenue Cycle Management (cont’d)
  • Payer Strategies Sophistication
  • Clinical guidelines & pathways constraints
  • Prior authorizations
  • Reduced or delayed payments
  • Changes in plan benefits
  • Multiple plans and relationships
  • Outsourcing to specialty care vendors (PBM, ICORE, P4, etc.)
slide22

COMMON PRACTICE MANAGEMENT CHALLENGES IN MEDICAL PRACTICES

  • 5. Management & Leadership
    • Recognize the importance of investment in technology
    • Recognize the need for investment in people – skills, competencies
    • Collaborate to determine & install adequate and appropriate controls
    • Committed, communicative leaders who shape values
    • Base decisions on sound data & processes (dashboards)
    • Appropriate governance
slide23

COMMON PRACTICE MANAGEMENT CHALLENGES IN MEDICAL PRACTICES

  • 6. Practice Development (Demand Management)
    • Excellent patient relations skills
    • Excellent telephone skills
    • Thorough referral management program
    • Focused & diligent payer management program
meeting the challenges some solutions

MEETING THE CHALLENGES:SOME SOLUTIONS

RESOURCE MANAGEMENT

TALENT MANAGEMENT

DEMAND MANAGEMENT

SUPPLIER MANAGEMENT

resource management
RESOURCE MANAGEMENT
  • Technology investment
    • Enables productive & efficient tactics such as eRx, PQRI, QOPI and regimen analysis
    • Enhances appropriate (and possibly cost-effective) clinical decision making, Clinical Trials management, optimal charge capture and coding & EoB analysis
    • Enables patient counseling, financial analysis, efficient caregiving & revenue enhancement opportunities
    • Lower costs over time, improved quality, payer leverage, branding, patient relations and shared data to all stakeholders (portals)
talent management
TALENT MANAGEMENT
  • Human Capital Investment
    • Enables productive & efficient decision making
    • Encourages the pursuit of continuous improvement in methods and processes
    • Enables skill & knowledge growth
    • Encourages engagement & cooperation
    • Enhances retention and a constancy of purpose aligned with the practice’s mission
slide27

MEETING THE CHALLENGES

  • Personnel Productivity Tactics
    • Optimal job & process design at all levels (“Organization”)
    • Adequate, appropriate & constant training
    • Accountability (performance mgmt)
    • Adequate & communicated policies & expectations
    • Fair & reasonable support and reward systems; pay, benefits, recruiting, selecting, training, communication & engagement
demand management
DEMAND MANAGEMENT
  • Business Development Investment
    • Enables brand-building
    • Supports cooperation with downstream entities (payers and their allies): value based contracting
    • Becomes more critical as the rate of change escalates
    • Strengthens referral sources & clinical trials sources
    • Focuses on opportunities to add value to the caregiving continuum and aligns everyone with the practice’s mission
    • Difficult for competitors to replicate
supplier management
SUPPLIER MANAGEMENT
  • Upstream Entity Investment
    • Builds credibility
    • Encourages cooperation for various initiatives
    • Identifies & strengthens business relationships
    • Offers opportunities to add value, reduce costs, obtain business intel and favorable terms & conditions on products and services
proper positioning
PROPER POSITIONING
  • The firm will successfully compete for employees & patients
  • The firm will have more satisfied, productive, loyal employees
  • “Better” productivity metrics
  • ESPIRIT de CORPS
  • A “virtuous cycle” of gains upon gains
  • Sets the stage for better care giving (mission critical)
  • Optimizes the practice’s intellectual capital – this is the sum & synergy of your knowledge, experience, relationships, processes, market presence and community influence
take away messages
TAKE AWAY MESSAGES

Sound Strategic Management is Critical for Continued Success.

Know and Understand Your People, Numbers & Your Processes.

Applied Knowledge is Power - Use what you learn, and always be learning

Understand Both the Economics for Your Business And for the Human Factors

Take Responsibility for Your Business & Yourself

take away messages1
TAKE AWAY MESSAGES

Physician – owner compensation will continue to experience downward pressure.

Productivity & efficiency improvements are possible.

Employees will be the source of such improvements.

Managers & leaders will be integral to the business’ success as clinical & technological demands on providers increase.

If you keep doing what you’re doing, you’ll keep getting what you have (or even less).