Sustainable solutions for practice profitability: too often, IT solutions for group practices generate, at best a quick fix. Forward-thinking group practice managers will evaluate technology for its capacity to enhance long-term profitability - Physician Practice Management

Health Management Technology, Jan, 2004 by Frank Rhie, Gina Volmert

Finding ways to make a medical practice more profitable seems to be an ongoing battle for practice managers. While the effort seems never-ending, so, too, does the array of products, services and consultants that promise to find the solution.

However, one-time savings are no longer enough. The challenge for IT professionals within medical groups today is to find the tools and operational procedures that will target the areas of the practice that provide the most potential for sustainable savings through increased productivity and optimal capacity utilization. The result to the practice will be lower overhead expenses, increased revenue and, when properly implemented, a more satisfied workforce.

The key areas to address through technology to produce sustainable savings in physician group practices are:

* Physician productivity;

* Capacity utilization, and

* Staffing.

Physician Productivity

Physician productivity goes well beyond how many patients can be seen in a day. The first step toward improving physician productivity is to gather baseline metrics such as total revenue per physician, total revenue per full-time employee (FTE), total revenue per square footage and total revenue per number of patients.

Once the metrics have been gathered, the practice can compare productivity with benchmarking data from public of private sources, such as the Medical Group Management Association, or set its own productivity goals.

Technology, whether software programs or a practice management system, is essential to both gathering and analyzing productivity related data. Key features that should be incorporated into technology to enhance track and measure productivity include:

* Ability to store Relative Value Units by procedure, such as Resource Based Relative Value System, so that the practice can better analyze relative value and units of productivity by procedure and physician;

* Reporting capabilities that can track and summarize revenue and workflow events (e.g., scheduling and waiting room time) by procedure and physician;

* Quantifiable data that can be used for compensation and bonuses; and

* Workflow management tools to determine whether productivity can be increased with an improved time-utilization mix for lower-paying procedures or increased use of allied professionals such as nurse practitioners and physician assistants.

Capacity Utilization

Capacity refers to a number of elements, including:

* The number of patients a physician can see in an hour or a day;

* Staffing requirements to accommodate patient volume;

* The infrastructure to handle communication needs such as phone lines, fax, e-mail or postal mail, and space requirement to handle patient visits as well as the infrastructure requirements to house medical records.

The metrics for capacity utilization may include patients per physician, FTE staff, square footage of space and number of phone lines. Many factors will influence these denominators, such as staff, space requirements, communication infrastructure and existing office workflow.

Improved capacity management can also address one of the key challenges of physician practices today: patient scheduling and flow. The average wait in a physician office today is more than 20 minutes. Few areas provide more frustration to staff or patients than excessive wait times or poor scheduling.

To address the area of capacity, technology adopted should offer a workflow management system to ensure that patients are seen promptly and that resources are properly allocated to address patient needs.

A key area impacting capacity is the storage of patient records. While the number of rooms required to see patients will remain constant, as the practice grows--and as the amount of paperwork per chart grows--the need for medical records storage will only increase. While there are many arguments for adopting an electronic medical record (EMR), its ability to help manage capacity should also be considered.

Staffing

One of the highest cost centers for medical groups today is staffing. It is estimated that it now takes 4.5 staff members to support a single physician in practice today. Technology can help manage staffing issues by automating routine tasks such as chart pulls, filing, pharmacy callbacks and forwarding patient information to other providers.

Adding technology doesn't necessarily equate to reducing staff. Valued personnel can be assigned to other neglected areas such as collections, ensuring accurate eligibility and following up with unpaid claims.

This is a critical area for practices to examine. It is estimated that 34 percent of claims submitted to insurers are automatically denied due to inaccurate of incomplete information, and that of those automatically denied, 90 percent do not receive follow-up. If automation and technology can create cost savings and efficiencies, staff can be allocated to other key areas such as patient or customer relations or billing.

To address the area of staffing, the technology used should be able to perform the following tasks: