The oft-repeated truism that you cannot change what you cannot measure has a less frequently repeated corollary: You get what you measure. This has been a hard-learned lesson for radiology practices, many of which—empowered with detailed information on radiologists’ productivity—have linked some portion of compensation to work RVUs. Practices are learning that creating incentives for productivity in this way can make radiologists focus on stack burning, to the exclusion of important nondiagnostic work.
Further, radiology practices are under increasing pressure to become more engaged with the health-care system and to provide better service to both patients and referrers. The advent of consumerism in medicine, a result of escalating copayments and deductibles, puts patient satisfaction at a premium. As hospitals look at emerging care- and payment-delivery models, physician interaction and cooperation has never been more important to their administrators.
As a result, models for creating incentives for nondiagnostic productivity are beginning to emerge, and radiology practices are finding that they have much to gain from developing formulas that reward more than diagnostic productivity. In addition to resolving common practice conflicts, they also provide a welcome and organic opportunity for strategic thinking. By defining the goals that the practice sees as important enough to merit incentives, it cements its vision for the value proposition that it aims to deliver to patients, referrers, and affiliated health-care organizations.
Case in Point
There are many ways to approach developing a formula for measuring both diagnostic and nondiagnostic productivity. A method that is being employed by one client practice of Medical Management Professionals Inc (MMP) involves the basic unit of measurement for radiologist productivity, the RVU. The practice maps the RVUs for each individual physician against the amount of time that he or she works to develop a figure for average RVUs per hour. This figure is then applied to the amount of nondiagnostic time that the partners in the practice deem appropriate, across multiple sectors of physician activity.
For instance, the practice offers a teaching program at its hospital; radiology residents participate in the practice’s night call. The practice partners decided that lectures for residents and other teaching-program activities deserved recognition and assigned them RVUs accordingly. Participation in hospital boards and medical executive committees was given an RVU number, as were referring-physician outreach and activities related to management of the hospital’s imaging centers. Diagnostic and nondiagnostic RVUs are, of course, measured and tracked separately.
The initial results of this initiative have been surprising to many of the practice’s top producers of diagnostic RVUs. Often, there is an inverse correlation between diagnostic and nondiagnostic productivity counts, confirming that radiologists who are less productive diagnostically tend to be spending their previously unaccounted-for time on practice-building activities—and that those who are most productive diagnostically are often doing little to enhance the practice’s position. Quantifying the value of these activities lends meaning to conversations about productivity and helps reduce emotions about workloads.
Initiating the Conversation
The RVU approach is by no means the only way to quantify nondiagnostic productivity. Radiology practices should, however, begin by defining average diagnostic productivity, then work from there to determine the value of an appropriate unit of time—most likely to be an hour—of work.
From there, the partners should initiate a conversation about which nondiagnostic activities they want to support through incentives—bearing in mind, of course, that you get what you measure. Standard areas might be integration with the hospital community and medical staff, interaction with referring physicians and/or patients, marketing activities, or participation in the management of outpatient imaging facilities.
Most important, the formula should be flexible and subject to annual review. If necessary, the partners should be able to revise it as the practice’s needs change, or if it becomes clear that an activity is not as important to the well-being of the practice as they originally believed. The ultimate goal of the conversation is to determine how the practice can best position itself to be competitive in its market; linking this discussion to financial incentives changes it from a soft concept to something that can be quantified by data. Assessing the impact of the change on an annual basis will allow the practice to understand which of its nondiagnostic activities are best supporting its goals.
Strategic Thinking
Radiology practices can be forgiven for feeling too beleaguered for strategic planning, a term that often calls to mind dreary, weekend-long retreats. Facing declining reimbursement, jeopardized hospital contracts, and softening volume, many radiologists are already overwhelmed. These, though, are the reasons that strategy has never been more critical for radiology practices. Diagnostic productivity is, of course, of utmost importance, but it is also the nondiagnostic activities of radiologists that maintain and grow volume.
The conversation about productivity and compensation provides a welcome back door to strategic thinking. It enables the practice’s partners to define their goals in a way that is succinct, productive, and easily reinforced. By quantifying the nondiagnostic activities that build the business (in addition to the diagnostic activities that are the business), radiology practices can, at long last, effectively strike a balance between the two, positioning themselves for a more engaged future.
David Myrice, CPA, MBA, is a senior finance manager and practice administrator with Medical Management Professionals Inc (MMP).