Reducing Overhead?

[CardioPlus]

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I saw this video on CNN about a Family Practice that opened with 2 docs, no staff, and thought it was interesting. The model cuts out any supporting staff completely so they can spend more time with the patients. Although they see less patients per day, their overhead is thus almost eliminated and kept to a minimum.

http://www.cnn.com/video/#/video/health/2009/08/04/hcif.ideal.medicine.cnn

I was just wondering if anyone had seen this type of practice in real life or had any thoughts (which seems to be the way docs operated back in the day)? Also, do you think this is a practical business solution, or do you think the docs are just "trying to buck the trend in regards to the dwindling time docs see patients on average," while taking a monetary hit? Thanks everyone, I look forward to hearing your responses!

 

[JaggerPlate]

I saw this video on CNN about a Family Practice that opened with 2 docs, no staff, and thought it was interesting. The model cuts out any supporting staff completely so they can spend more time with the patients. Although they see less patients per day, their overhead is thus almost eliminated and kept to a minimum.

http://www.cnn.com/video/#/video/health/2009/08/04/hcif.ideal.medicine.cnn

I was just wondering if anyone had seen this type of practice in real life or had any thoughts (which seems to be the way docs operated back in the day)? Also, do you think this is a practical business solution, or do you think the docs are just "trying to buck the trend in regards to the dwindling time docs see patients on average," while taking a monetary hit? Thanks everyone, I look forward to hearing your responses!

Super interesting. Here are my thoughts:

1. I always thought a doctor who made house calls would really bring something unique to the table (as long as everything was done safely) and bring a lot of business and low overhead into their practice.

2. I'd be really interested to see what their take home salaries are like. It seems to me that the cut in overhead is obvious, but I'm not sure if this is balanced out by the fact that they see so many fewer patients. My guess is that it could be close to a wash.

3. I wonder how much of their time they spend doing clerical BS that normally no doc would do because they don't even have a patient coordinator or someone to do billing.

Interesting model for sure. Guess time will tell if it catches on.

 

[tuffguy13]

Very interesting. I am under the impression that with the current state of health care, the amount of paperwork is a bit ridiculous. They've got less money to pay for employees wages (less cost) but less patients coming in (less revenue) plus they spend more time working on paperwork. I also wonder if this model of no employees at the office would translate well for other specialties that have their own offices.

 

[Laryngophed]

Super interesting. Here are my thoughts:

1. I always thought a doctor who made house calls would really bring something unique to the table (as long as everything was done safely) and bring a lot of business and low overhead into their practice.

2. I'd be really interested to see what their take home salaries are like. It seems to me that the cut in overhead is obvious, but I'm not sure if this is balanced out by the fact that they see so many fewer patients. My guess is that it could be close to a wash.

3. I wonder how much of their time they spend doing clerical BS that normally no doc would do because they don't even have a patient coordinator or someone to do billing.

Interesting model for sure. Guess time will tell if it catches on.

I agree with you here, but I think that even if it comes out to be a wash (for number 2) I think the patients ultimately win. The docs see fewer patients but given that they are PCPs, these patients get more time with their docs. I think this plays directly to the desire of many PCPs to form and develop relationships with their patients in an effort to attack health care as a team.

I personally think that if it comes out as a wash financially, it's a win (for everyone really) in that respect.

 

[scummie]

I personally think that if it comes out as a wash financially, it's a win (for everyone really) in that respect.

Ah, except when it comes back to paying back those student loans.

True, the patient gets more time with the physician. Overhead is a beast in almost every service profession, really. I think there are other ways to minimize overhead besides cutting out all the intermediate personnel.

You could change your office space to lower the costs of rent, switch to EMR (if you're good with computers), use just one nurse instead of two, increase visits costs, etc. Of course, this is all easier said than done and I'm just a pre-med who doesn't know anything really about running a medical practice.

 

[Laryngophed]

Ah, except when it comes back to paying back those student loans.

True, the patient gets more time with the physician. Overhead is a beast in almost every service profession, really. I think there are other ways to minimize overhead besides cutting out all the intermediate personnel.

You could change your office space to lower the costs of rent, switch to EMR (if you're good with computers), use just one nurse instead of two, increase visits costs, etc. Of course, this is all easier said than done and I'm just a pre-med who doesn't know anything really about running a medical practice.

Maybe I did a poor job articulating my point. When I said it comes out as a wash, I meant that the no staff model produces the same net income for the docs as the high staff/high patient volume model.

 

[scummie]

Maybe I did a poor job articulating my point. When I said it comes out as a wash, I meant that the no staff model produces the same net income for the docs as the high staff/high patient volume model.

Ah, gotcha!

 

[JaggerPlate]

I agree with you here, but I think that even if it comes out to be a wash (for number 2) I think the patients ultimately win. The docs see fewer patients but given that they are PCPs, these patients get more time with their docs. I think this plays directly to the desire of many PCPs to form and develop relationships with their patients in an effort to attack health care as a team.

I personally think that if it comes out as a wash financially, it's a win (for everyone really) in that respect.

Definitely a win for the patients, and it's really cool you think that way!! I think that as far as more patient care and less paperwork, concierge medicine is really something to look into. It's really hard for physicians to set up these types of practices, but it's definitely better, direct patient care without the paperwork.

 

[SoCar]

This really couldn't be implemented throughout the system given the fact there is already a physician shortage and if doctors see less patients than that shortage would be even more glaring.

 

[group_theory]

Super interesting. Here are my thoughts:

1. I always thought a doctor who made house calls would really bring something unique to the table (as long as everything was done safely) and bring a lot of business and low overhead into their practice.

2. I'd be really interested to see what their take home salaries are like. It seems to me that the cut in overhead is obvious, but I'm not sure if this is balanced out by the fact that they see so many fewer patients. My guess is that it could be close to a wash.

3. I wonder how much of their time they spend doing clerical BS that normally no doc would do because they don't even have a patient coordinator or someone to do billing.

Interesting model for sure. Guess time will tell if it catches on.

I've seen this done at a few private practices. Usually they are small practices with not too many physicians. If your practice is big, then the paperwork as well as losing organizational efficiency gets to be a problem.

Billing and insurance becomes a nightmare -getting the right billing form for various insurnace (state medicaid, medicare, sCHIP, workman comp, blue cross, aetna, cigna, tricare, etc) ... determine the right co-pay. Also you have to submit these bills to insurance companies, keep track of account-receivables, reimbursement denials, etc. Also to submit claims you need appropriate ICD9 codes (and wasting time looking up ICD9 codes*). At the same time you need someone to man the phones, schedule appointments and follow-ups, and also send letters (or phone calls) reminding people about their appointment. Remember, thanks to our legal system, if you don't send a reminder to patients about their appointments (and send certified letters reminding them of their missed appointments) and sometime medically happens to them (injury/death), you can be liable for medical malpractice. Also you need someone to take the phone calls from patients who are sick seeking advice

There's also paperwork associated with insurance - prior authorizations and denials. Again if you don't help your patient appeal a denial, and sometime bad happens to the patient, then you can be liable (but not the insurance company who issued the denial).

In addition, you have to be able to keep track of your cash flow and make sure all the bills are paid on time.

A small practice can get away with this. But I can't see a medium size practice or large group practice getting away with this - there's too many complexities (include physician personal billing code that is difference with each insurance companies)



Now to JaggerPlate's questions,

Home visits - Medicare does reimburse for home visits but the reason why so few doctors do home visits is the opportunity cost involved. In 2005, Medicare will reimburse $110 for a detailed (level 4) home visit. The visit can last 30-45 minutes (but can easily exceed that, especially if you're in a home environment with the patient and start talking about nonmedical stuff, ie life). Physicians that do home visits get a lot of satisfaction out of it. But time wise, each visit (including transportation time) can take an hour or more. For that hour, you could have 3-4 patients (at 15-20 minutes each) in the office - billing level 3 or level 4 for each visit. Basically in that hour, you could have made $110 (plus transportation cost) if you did the home visit, or you could have billed $50-$80 per patient (for a level 3-4 visit) for the 3-4 patients you saw in that hour. The differerences adds up over time.

And for the elderly, they seldom only see one physician (a PCP) but have other specialists involved in their care too. But the physicians that I know who do house calls, they get great personal satisfaction out of it.




*example of how ICD9 coding can be confusing - here's an example for hypertension (and just hypertension).

401.0 - Malignant essential hypertension
401.1 - Benign essential hypertension
401.9 - Unspecified essential hypertension -hypertension occurring without preexisting renal disease or known organic cause
402.00 - Malignant hypertensive heart disease without heart failure
402.01 - Malignant hypertensive heart disease with heart failure
402.10 - Benign hypertensive heart disease without heart failure
402.11 - Benign hypertensive heart disease with heart failure
402.90 - Unspecified hypertensive heart disease without heart failure
402.91 - Unspecified hypertensive heart disease with heart failure
403.00 - Malignant hypertensive renal disease without renal failure
403.01 - Malignant hypertensive renal disease with renal failure
403.00 - Benign hypertensive renal disease without renal failure
403.11 - Benign hypertensive renal disease with renal failure
403.90 - Unspecified hypertensive renal disease without renal failure
403.91 - Unspecified hypertensive renal disease with renal failure
404.00 - Malignant hypertensive heart and renal disease without heart failure or renal failure
404.01 - Malignant hypertensive heart and renal disease with heart failure
404.02 - Malignant hypertensive heart and renal disease with renal failure
404.03 - Malignant hypertensive heart and renal disease with heart failure and renal failure
404.10 - Benign hypertensive heart and renal disease without heart failure or renal failure
404.11 - Benign hypertensive heart and renal disease with heart failure
404.12 - Benign hypertensive heart and renal disease with renal failure
404.13 - Benign hypertensive heart and renal disease with heart failure and renal failure
404.90 - Unspecified hypertensive heart and renal disease without heart failure or renal failure
404.91 - Unspecified hypertensive heart and renal disease with heart failure
404.92 - Unspecified hypertensive heart and renal disease with renal failure
404.93 - Unspecified hypertensive heart and renal disease with heart failure and renal failure
405.0 - Malignant secondary hypertension
405.01 - Malignant renovascular hypertension
405.09 - Other malignant secondary hypertension
405.1 - Benign secondary hypertension
405.11 - Benign renovascular hypertension
405.19 - Other benign secondary hypertension
405.9 - Unspecified secondary hypertension
405.91 - Unspecified renovascular hypertension
405.99 - Other unspecified secondary hypertension

 

[CardioPlus]

haha wow those codes look intimidating! Maybe I'll just stick with the front office staff 😎

 

[jkmph]

This is analagous to the French model. French docs have little-to-no overhead and most primary care practices are composed of just physicians who do all their own scheduling, billing, etc.

 

[just one]

It only comes out to be a win if the patient CAN BE SEEN. If all physicians did it, the physician shortage would be magnified due to each physician seeing fewer patients. I know of some specialists in my area that can't see new patients for months, imagine if it was on this system.

 

[JaggerPlate]

It only comes out to be a win if the patient CAN BE SEEN. If all physicians did it, the physician shortage would be magnified due to each physician seeing fewer patients. I know of some specialists in my area that can't see new patients for months, imagine if it was on this system.

I get that less patients can be seen, but where does the issue of quality come into play?? Is it better to have physicians see 100 patients a day for 2 minutes each like an assembly line, or is it more beneficial to maybe have a physician only see a dozen patients, but to comprehensively screen, treat, etc??? Sometimes I neglect to see the point of seeing/having as many patients as possible.

 

[just one]

I get that less patients can be seen, but where does the issue of quality come into play?? Is it better to have physicians see 100 patients a day for 2 minutes each like an assembly line, or is it more beneficial to maybe have a physician only see a dozen patients, but to comprehensively screen, treat, etc??? Sometimes I neglect to see the point of seeing/having as many patients as possible.

I agree it is a fine line, but I guarantee quality is very low if you never get seen

 

[JaggerPlate]

but I guarantee quality is very low if you never get seen

No argument there.

 

[Tekar]

Group Theory's post was awesome and makes great points. Thanks for your insight.

I see a couple issues here. First, your list of ICD-9 codes could not have further demonstrated the complexity of the profession we are all entering. It's overwhelming, but it is the knowledge of that system that allows physicians to be properly compensated. Not checking the proper box because you didn't know it existed but you did something for the patient leaves money on the table. If you work by yourself, get to know medical coding, take the class that coders take, hell get a damn near degree in it. If you work for a ginormous practice, pay someone who knows it inside and out, pay for someone to learn it inside and out, and then suture them to your hip and never let them go. The cost of their salary will more than be made up by the money they find that was lost. Ask hospitals why they have care coordinators.

I see this model working in a very small practice for a couple reasons. First, you don't need to hire a 50k nurse, a 35k ma, and 80k worth of billing and office staff because you spend a good deal of money up front to get an EMR that does a ton of this for you. The scheduling and the billing information is put into the computer by the physician at first visit and because of the personal relationship, likely stays updated and is updated easily. Part of educating the patient is educating them about e-mail and how to use it to communicate with their doctor. Then the reminders are e-mailed.. just as they do. The complexity of the billing is exactly what HIPAA is really intended to fix..oh yes, you don't need to hire a HIPAA coordinator. A good brand new, completley modern EMR should handle all of the insurance/records crap seemlessly. By not being afraid to do the dirty work of medicine, doctors can eliminate the need for a nurse and ma to do vital signs, injections, etc.

I see a moderate sized practice losing more money here than a very small or a very large. The very large can spread out the required administrative costs much better.

I suspect this practice really only takes patients with insurance or cash paying with some free care when it is needed. Keep in mind here also, they don't have to worry about being embezzled from by any body because they both see the accounts. The money in this practice is much simpler this way. That said, good luck taking a two week back packing trip through Europe. Course, that barrier comes crashing down with the power of the internet, skype, etc. Who knows. We all talk about cutting the rising cost of medicine, the administrative stuff is the rising cost.

 

[Tekar]

I get that less patients can be seen, but where does the issue of quality come into play?? Is it better to have physicians see 100 patients a day for 2 minutes each like an assembly line, or is it more beneficial to maybe have a physician only see a dozen patients, but to comprehensively screen, treat, etc??? Sometimes I neglect to see the point of seeing/having as many patients as possible.

yes, I suspect medical schools might have to grow and admit a few more people. It's not like they suffer from a shortage of qualified applicants.

 

[pianoman511]

Group Theory's post was awesome and makes great points. Thanks for your insight.

I see a couple issues here. First, your list of ICD-9 codes could not have further demonstrated the complexity of the profession we are all entering. It's overwhelming, but it is the knowledge of that system that allows physicians to be properly compensated. Not checking the proper box because you didn't know it existed but you did something for the patient leaves money on the table. If you work by yourself, get to know medical coding, take the class that coders take, hell get a damn near degree in it. If you work for a ginormous practice, pay someone who knows it inside and out, pay for someone to learn it inside and out, and then suture them to your hip and never let them go. The cost of their salary will more than be made up by the money they find that was lost. Ask hospitals why they have care coordinators.

I see this model working in a very small practice for a couple reasons. First, you don't need to hire a 50k nurse, a 35k ma, and 80k worth of billing and office staff because you spend a good deal of money up front to get an EMR that does a ton of this for you. The scheduling and the billing information is put into the computer by the physician at first visit and because of the personal relationship, likely stays updated and is updated easily. Part of educating the patient is educating them about e-mail and how to use it to communicate with their doctor. Then the reminders are e-mailed.. just as they do. The complexity of the billing is exactly what HIPAA is really intended to fix..oh yes, you don't need to hire a HIPAA coordinator. A good brand new, completley modern EMR should handle all of the insurance/records crap seemlessly. By not being afraid to do the dirty work of medicine, doctors can eliminate the need for a nurse and ma to do vital signs, injections, etc.

I see a moderate sized practice losing more money here than a very small or a very large. The very large can spread out the required administrative costs much better.

I suspect this practice really only takes patients with insurance or cash paying with some free care when it is needed. Keep in mind here also, they don't have to worry about being embezzled from by any body because they both see the accounts. The money in this practice is much simpler this way. That said, good luck taking a two week back packing trip through Europe. Course, that barrier comes crashing down with the power of the internet, skype, etc. Who knows. We all talk about cutting the rising cost of medicine, the administrative stuff is the rising cost.

Unfortunately this would NOT work, even in a small practice. A good EMR is great, but it does not run your practice for you. Who will answer the phones during the day ? Not having a MA or RN to room for the physician adds a good 5-10 extra minutes to each visit to do vitals, chief complaint, get prescription renewal information. As has been pointed out earlier, there is also all of the insurance related paperwork with referrals, prior authorizations, worker's comp paperwork, etc. This is all stuff that ancillary staff can either mostly or completely take care of with minimal input by the doctor. Add that to the physician having to dictate or transcribe his notes on each patient and you are already behind. Unless you only plan on seeing 5-6 patients a day and devoting the rest of the day to the above "stuff", it's gonna be a 10-12 hour day, every day (minimum) and you risk missing things because you can't monitor the fax, phones, prescription line and see patients at the same time. Yes email is great, but currently there are still many patients (especially elderly) who don't have access. Also, how are you going to be checking your email every second while seeing patients ? And how are you going to schedule all of your patients who call for urgent visits when you can't be by the phone all the time ?

 

[TopQuark]

I get that less patients can be seen, but where does the issue of quality come into play?? Is it better to have physicians see 100 patients a day for 2 minutes each like an assembly line, or is it more beneficial to maybe have a physician only see a dozen patients, but to comprehensively screen, treat, etc??? Sometimes I neglect to see the point of seeing/having as many patients as possible.

I shadowed a few doc's that work for a huge organization (two words, starts with a K), so I thought I'd add a few comments. Can't speak for all PCPs everywhere, but from my experience in working in the clinic and shadowing said doc's, I would argue that most see only about 20-30 pts a day. Still a lot, but also a lot less than 100. I'd say average time ~10-20 min. Not a lot, but enough to meet the medical needs of the pts and a lot more than 2 mins. I realize you are exaggerating to make a point, but let's not go overboard. Very interesting, I'd like to write more on this later

 

[Biology101]

It is a nice thought that doctors could do it all, however, thats alot of additional work. They wouldnt see more patients, obviously, and how much longer could they spend with each patient, if they have to do 3-4 hours of paper work a day. Its just not feasible...

 

[JaggerPlate]

I shadowed a few doc's that work for a huge organization (two words, starts with a K), so I thought I'd add a few comments. Can't speak for all PCPs everywhere, but from my experience in working in the clinic and shadowing said doc's, I would argue that most see only about 20-30 pts a day. Still a lot, but also a lot less than 100. I'd say average time ~10-20 min. Not a lot, but enough to meet the medical needs of the pts and a lot more than 2 mins. I realize you are exagerating to make a point, but lets not go overboard. Very interesting, I'd like to write more on this later

Hahaha, 'two words, starts with a K.' I probably used too much hyperbole in my statement ... I didn't really mean 100 patients a day.