By Greg Thomson, CPA
Vol. 16 No. 8 P. 10
In today’s health care environment, managing a hospital-based radiology practice and achieving increased effectiveness and improved productivity for business survival is no easy task. While strong revenue cycle management (RCM) strategies can amplify a group’s billing and accounts receivable results, incorporating practice management services can also support future growth and sustainability for a physician practice.
In order to sustain a successful practice, radiologists and their administrators really need to look at the health of the business overall, in addition to running its RCM program efficiently. Once a group has the revenue from its RCM, it can use practice management strategies to effectively apply it. Both sides have to function smoothly.
Effective practice management always consists of the following four S’s:
Creating a Strategy
A successful practice used to be measured by the quantity of its monthly deposits and its metrics of patient satisfaction. These days, a successful practice is measured by how strong its relationships are, its ability to compete, as well as its financial strength. Practice management is about having a strategy and executing it effectively, which requires more sophisticated management expertise than ever before.
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. To customize these solutions to fit the needs of each individual practice, practice managers can and should work directly with the group administration, or even serve a role as the administrator, if necessary.
RCM analytics also carry over into practice management. With the use of practice management data, physician groups can benchmark their practice against similar practices across the country.
The best way to benchmark progress is against your own practice, but it’s also extremely helpful to see how other groups operate. What are other groups paying shareholders vs nonshareholders? How much vacation do other practices offer? Ideally, a group would aggregate and survey those data for maximum transparency and benefits. Similarly, if a practice uses them in tandem with RCM services, it gets the best of both types of analytics—reporting based on practice data, as well as financial modeling.
The services are truly symbiotic. Better RCM is served with information, data, and experience that are built into the practice management solutions, and vice versa.
Supporting Your Staff
While certain functions such as human resources, payroll, and accounting may be easier to hire or replace, other business functions in imaging may require sophisticated expertise usually held by more experienced and higher-salaried professionals. There is nothing too general about business services for a radiology practice. For instance, practices should look to amend bylaws and retirement plans for changing practice dynamics or regulations even when most radiologists in the group feel their needs are being met, whether it is those contemplating retirement or those just coming in to the practice. Another area might involve renegotiating medical malpractice coverage for the group. Consulting with an expert who has developed models that were successful in previous engagements can offer a practice an alternative that may be successful for them.
Planting Ideal Seeds
Radiology practices are interested in protecting their current business and planting seeds to ensure future growth. There are different paths that can be taken to achieve that goal. Asking the right questions is critical to that growth. It could be a matter of developing a new practice model, one based on components of productivity and reimbursement that replaces the long-standing lump and divide model. It could also mean strategic growth through a merger or acquisition.
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 is always a key consideration.
Striving to Serve
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, and to become information providers that can help the hospital, referring physicians, and patients become better medical decision makers.
One way hospital-based physician groups can demonstrate value is to consistently work with hospital administration, not just during the negotiation period, to fully understand what is important to the hospital and to align goals. This type of collaboration and continuous evidencing of their contribution to hospital care initiatives serves to ensure practice sustainability, profitability, and ultimate success.— Greg Thomson, CPA, is a vice president of practice management with Zotec Partners.