Customizing Practice Management Solutions for Effective Operations, Growth and Sustainability
Managing a radiology practice to achieve increased effectiveness and improved productivity is essential not only for survival, but also to maintain positive cash flow in today’s healthcare environment. Incorporating practice management services into revenue cycle management (RCM) strategies can further amplify radiology billing and support future growth and sustainability.
“To sustain a successful radiology practice, you really need to look at the health of your business overall, in addition to running your RCM program efficiently. Both sides have to be strong,” says Neal Peterson, director of business development with Zotec Partners. “RCM is getting the monies in the door, practice management is what you do with it after it is in the bank.”
With declining reimbursement rates for key radiology exams, many practices are stepping up their revenue cycle management programs. Practices need to be able to better monitor their revenue, by following up on denials, developing better self-pay and high deductible payment protocols that will lead to increased collections. RCM strategies utilize business analytics and financial modeling to identify trends and predict future revenues based on historical data and utilization. While focusing on RCM is certainly key, there are other complimentary services that will bolster the long-term success of a practice as well.
Solutions providers like Zotec offer practice management services in addition to RCM to radiology practices. Running a practice truly like a business requires focus on all areas, in addition to managing revenue.
Customized practice management solutions
Practice management is about having a strategy and executing it effectively, which requires more sophisticated management expertise than ever before.
“In the pre-DRA world, a successful practice was measured by the quantity of its monthly deposits and its measurements of patient satisfaction,” Peterson says. “Today a successful practice is measured by how strong their relationships are, their ability to compete and the financial strength of their organization, among other elements. And there are resources available to help practice managers and radiologists evaluate and strengthen their business operations, make informed business decisions, and have more time to focus on patient care.”
Practice management services should offer the consultative or staffing support needed to provide strategic advice, whether it is for general business services, mergers and acquisitions, or hospital or carrier contract negotiations. Customizing solutions to fit the needs of each individual practice, practice managers can and should work directly with the group administration, or even serve as the administration if need be, to provide customized practice management solutions.
“The overwhelming majority of our practice management clients have full-time practice administrators, and we work in tandem with them to supplement their strengths. There have been instances, however, when a practice doesn’t have the need for a full-time administrator, but still needs the expertise and knowledge from time to time,” explains Peterson. “Many of our larger clients have a full C-suite servicing their group. Another benefit of practice management is if a group loses a team member who is a major asset, such as a CFO or COO. There is typically an experienced radiology professional who knows the business in the interim while the group searches for a new candidate. In this regard, practice management is a fail-safe and insurance policy.”
RCM analytics also carry over into practice management. With the use of practice management data, radiology groups can benchmark their practice data against similar practices across the country.
“Of course, the best way to benchmark progress is against yourself,” Peterson says, “but it’s extremely helpful to see how other groups operate. What are other groups paying shareholders versus non-shareholders? How much vacation do other practices offer?” Ideally, a group would aggregate and survey that data for maximum transparency and benefits. Similarly, if a practice uses data in tandem with RCM services, they get the best of both types of analytics—reporting based on practice data, as well as financial modeling.
Peterson believes the services are symbiotic, “We believe better RCM is served with information, data and experience that are built into the practice management solutions, and vice versa.”
General business services
In addition to outsourcing RCM functions, many radiology practices outsource general business services as it can be cost prohibitive to staff many of these functions in-house. While basic functions such as human resources, payroll, and accounting may be easier to hire or replace, other business operations may require more sophisticated expertise usually held by more experienced and higher-salaried professionals. It can be very beneficial to work with a solutions provider that handles many similar types of practices, and can offer basic service outsourcing, as well as higher level expertise; and a complete understanding of industry specifics.
“There’s nothing too general about business services for a radiology practice,” Peterson continues. “Take for instance by-laws, benefit plans or retirement. Many radiology practices are considering creating new by-laws or amendments and creating retirement plans whereby all radiologists in the group feel their needs are being met; both the one’s contemplating retirement and those just coming in to the practice. Another area we have had great success with is renegotiating medical malpractice coverage for our groups. Consulting with an expert who may have developed models that were successful in previous engagements may offer a practice an alternative that may be successful for them.”
Ultimately, the expertise gleaned from a practice management expert should be shared with a radiology group so it can benefit from best practices. A solid understanding of how other practices are strategically investing in mobile and communication infrastructures, for example, or investing in decision support tools, or structuring their practice models can help to formulate a practice management strategy and support long-term growth and sustainability for another practice.
Development and growth
The current landscape in healthcare is dominated by a steadily increasing consolidation. Consolidation in any industry is an effort to bring together different groups with the desired effect of increasing market share and perhaps more importantly, to strengthen one’s position at the bargaining table. Radiology is no exception.
The consolidation in the radiology market is influenced by a multitude of considerations. A larger practice offers a more diverse subspecialty service line, and being bigger equates to more power in contract negotiations, and often in attracting the most talented physicians.
“All radiology practices are interested in protecting their current business and ensuring future growth. There are different paths that can be taken to achieve that goal. When we consult with a practice about growth and development, we’re out there making sure they’re asking the right questions,” Peterson says. “It could be a matter of developing a new practice model; one based on productivity and reimbursement, replacing the long standing lump and divide model. It also could mean strategic growth through a merger or acquisition.”
Peterson continues that mergers and acquisitions should be pursued only with ideal partners, with opportunities that are both appropriate and strategic. Evaluating potential partners is a complex process, but culture, by far, should be a key consideration.
Demonstrating value
Consolidation alone, however, is not enough to meet the increasing demands and expectations of health systems. Practices should always strive to maintain or reestablish their positions as product and service leaders to become information providers that can help referring physicians and patients become better medical decision-makers.
“We work with our practice management clients to ensure that they are consistently working with the hospital, not just during the negotiation period, and that they understand what is important to the hospital and try to align their goals,” Peterson says. “This type of collaboration really serves to demonstrate the practice’s value.” To ensure sustainability and profitability, radiology practices must be able to continuously evidence their contribution to hospital care initiatives through collaborative and demonstrable analytics.