Building the Model Practice

Corporate-style governance, subspecialization, and choosing the right administrative staff members all play roles What does the ideal radiology practice look like? It is likely to include subspecialization, according to Lawrence R. Muroff, MD, FACR, president and CEO of Imaging Consultants Inc in Tampa, Fla. He believes that subspecialization strengthens the hand that a practice holds. “If, for example, you are a superb women’s imager, you may be seen as indispensable to your hospital’s breast surgeons, which makes your practice just that much less vulnerable to the institution’s administrative whims,” he says. “Subspecialization also serves as a defensive wall against encroachment by other medical specialties: Cardiologists and others tend to be less successful at capturing your turf if you can provide something they cannot.” Subspecialization was a strategy that Riverside Radiology Associates, Columbus, Ohio, arrived at over time, the 70-radiologist group’s president, Mark Alfonso, MD, recalls. “Our doctors are fellowship trained in all of the radiology subspecialties, including musculoskeletal, neuroradiology, mammography, body imaging, nuclear medicine, and interventional radiology,” Alfonso says. “We did not start out this way; we evolved into subspecialization after realizing it’s not enough merely to describe findings. One must also speak the language of the referring physicians, which helps them tremendously with patient management. As a result, we have become well known as a center of excellence for radiology within Central Ohio, branching out statewide.” The Corporate Governance Model A highly efficient governance structure also is characteristic of exemplary radiology practice models. Without that, a group will find itself at a distinct competitive disadvantage, according to Muroff, a respected, nationally known practice advisor. “An efficient governance structure enables the group to act decisively, appropriately and—in the best of circumstances—proactively,” he says. “It also permits good decisions to be made speedily. Speed is important because you need it to help you get out in front of the competition. For example, if you’re going to introduce a new service, it’s better to be the first in the market to do so rather than the seventh, since the first one up with the new service is the one with the best chance of dominating the market.” You are less likely to be first if your decision-making apparatus is creakily encumbered, he explains. Muroff believes that the optimal governance structure for radiology groups is the one embraced by companies outside of health care. “Call it the standard corporate model,” he says. “Radiology practices can benefit from adopting this model because they, themselves, are corporate-type businesses. They may see themselves as small, neighborhood businesses, but given that they typically bring in $5 million to well over $100 million a year, they hardly qualify as such. Neither can they be run like a neighborhood business.” Some radiologists blanch at the suggestion of patterning their practices after the likes of Microsoft or Federal Express. They see medicine and business as mutually exclusive. Muroff contends that it is wrongheaded to view things that way. “There is nothing to say that good business and good medicine cannot coexist,” he says. “In fact, a compelling argument can be made that, if you practice good business, you will be able to practice far better medicine, since you’ll have more resources at your disposal.” Two features of the corporate model of governance are a mission statement and a business plan. “Many organizations turn their mission statements into warm and fuzzy public-relations tools, but that is not their purpose,” Muroff insists. “A mission statement spells out the goals of the organization in a way that provides guidance to the leaders and to the rank and file of the organization. A business plan provides even more specific guidance in the form of timelines for accomplishment and structures for assigning tasks and securing accountability.” Governance Infrastructure The corporate model places the ultimate responsibility for carrying out the mission statement and business plan in the hands of a CEO, but a mistake that many radiology groups make after hiring one is failing to maintain frequent interaction with that leader. “I’ve seen radiologists, after finding and bringing aboard an excellent nonphysician business executive, think that they’re now free to be clinicians and just read images all day,” Muroff says. “It can’t work that way. There needs to be ongoing dialogue between the business leadership and the radiologists.” That dialogue is most productive when it flows through an executive committee made up of a demographically representative sample of the practice. “If the executive committee reflects the composition of the group, decisions it makes will probably be appropriate to more of the diverse interests composing the group,” Muroff says. In addition to the executive committee, Muroff recommends at least three other committees: finance, marketing/business development, and operations. The last is particularly important because, in order to be efficient, the corporate model of governance must enjoy the support of an effective business infrastructure. The need for practice building and good governance is not confined to large practices. Casper Medical Imaging in Casper, Wyo, is a group of six radiologists (some of whom are fellowship-trained subspecialists). It staffs a hospital and an outpatient imaging center, and it leveraged a solid administrative team to fuel practice growth.

"We’ve gone from being a small outpatient office of just a few radiologists to a full-fledged set of businesses that include joint ventures with our hospital, a billing operation that handles 120,000 CPT® codes annually, and another half a million claims and payment transactions." —Geoffrey Smith, MD, FACR, president Casper Medical Imaging, Casper, Wyo

Geoffrey Smith, MD, FACR, group president, also serves on the ACR Board of Chancellors as a representative for small and rural practices. He says, “We’ve gone from being a small outpatient office of just a few radiologists to a full-fledged set of businesses that include joint ventures with our hospital, a billing operation that handles 120,000 CPT® codes annually, and another half a million claims and payment transactions. Over a decade ago, we outsourced all of our business management and financials to a company located in another state,” Smith says. “Internally, we handled collections and some bookkeeping. We had a bookkeeper who assembled checks and handed them to someone to be signed—and did so without providing much in the way of supporting documentation. Our administrative staff consisted, by and large, of high-school graduates: We didn’t need people with an advanced education because the nature of the administrative work being handled in-house was not particularly sophisticated or specialized.” Smith continues, “Now, we have a salaried practice administrator holding a master’s degree, and we’ve replaced the bookkeeper with an accountant whose job description grew into that of a controller. The quality of personnel we’re employing in our business office has also increased dramatically, with many of them being college educated. We still outsource, but only those few functions involving complicated financial or legal issues.” An important goal for Casper Medical Imaging is to make sure that its administrative team does not fall into counterproductive habits. It achieves this with the help of a personnel manual created 15 years ago and updated a number of times since then. “The manual is a half-inch–thick package detailing everything an employee of ours needs to know in order to be an effective, contributing member of our staff,” Smith says. “It’s turned out to be foundational in our cultivation and management of a sizable number of employees in an increasingly complex business environment.” Casper Medical Imaging also has a mechanism in place for preventing friction among employees and promoting cohesiveness. Smith says, “We have a liaison committee made up of one radiologic technologist and one front-office staffer. They spend a fair amount of time planning the annual Christmas party and other social functions, but they also address small problems involving our internal communications or day-to-day processes—problems not big enough to make their way to the middle-management level, but still consequential enough to cause discord or disruption, especially if not dealt with and allowed to fester.” The Technology Piece Beyond subspecialization, good governance, and a solid business infrastructure, a radiology group, in order to be considered ideal, requires the support of cutting-edge technology. “Without the technology piece, you can’t really claim to have an ideal practice model,” Marcia Flaherty, CEO of Riverside Radiology, explains.

"Your technological capabilities all have to be the best possible, so that you can provide the level of service necessary to put your practice in the strongest competitive position." —Mark Alfonso, MD, president Riverside Radiology Associates, Columbus, Ohio

Riverside Radiology has done well with that particular element, judging by the equipment that it owns. “We have a PACS, which we acquired in 2003,” Alfonso says. “Having this system in place is what allowed us to take our subspecialty model and then spread it, bringing images to the subspecialist versus sending bodies to various locations to read. In support of PACS, we developed, from the ground up, an IT infrastructure that made it possible to create a company, so that we could outsource our PACS capabilities to practices and hospitals that cannot afford the PACS structure we have developed.” Alfonso voices the view that any technology acquired by a group—whether in IT or modalities—must be state of the art. “Otherwise, it’s like owning a sports car with four flat tires. Your technological capabilities all have to be the best possible, so that you can provide the level of service necessary to put your practice in the strongest competitive position,” Alfonso says. To illustrate the point, Flaherty mentions several recent technology initiatives undertaken by the practice. “We’re working on the development of 3D reconstruction across our infrastructure, which will support the work of our radiologists in a more effective fashion and, by extension, increase our customer-service focus,” she says. “This fits right in with our subspecialty model because the 3D reconstruction capability allows us to provide more specific information and remarkable images to the referring physicians.” She adds, “We also have a number of integrated systems we rely on not only to provide interpretations, but also to manage the functions of our practice. These include systems for billing, electronic medical records, dictation, email, texting, and other communication tools. This infrastructure is allowing us to increase the support for our radiologists at the hospitals we cover by developing our own 24/7 transcription service. The reality is that it’s hard for these hospitals to have transcriptionists available on a 24/7 basis, but without 24/7 transcriptionist support, it poses a challenge for us with regard to turnaround time. What we’re doing, in response, is using our technological capabilities to support a pool of transcriptionists who can, from one location, provide around-the-clock service to all of these different facilities.” Clearly, the ideal radiology practice model consists of many elements that require much planning and no small investment of resources. Some groups may conclude that the investment is too costly and that the rewards are too few. Muroff believes that would be a mistake. “Moving toward the ideal is not just a worthwhile goal, but an imperative for any group that wants to survive in the years ahead,” he says. “The next 10 years are going to be far more difficult for radiology than the 10 years now past. Groups will need to be the best they can be, and striving for the ideal ought to be at the top of their list of things to do.” Additional Reading -The Excellence Formula