By participating on finance committees, cardiologists may guide hospital’s financial decisions rather than merely abide by them. Reginald J. Blaber, MD, a physician executive, pushes colleagues to dig into spreadsheets to find savings and opportunities to improve their cardiovascular service line.
Blaber, executive director of the Cardiovascular Institute and vice president of cardiovascular services at Lourdes Health System in Camden, N.J., shares his experiences in this Q &A.
Should cardiologists be involved in financial issues?
In my view, [physicians] can either add value or destroy value. If there are two physicians and they achieve the same quality outcome, but one has a higher cost, then his care has a lower value. In an age when we have only a certain number of dollars to deal with, physicians who can deliver high-quality care most efficiently will win.
How can physicians gain financial knowledge?
We gained that through a partnership with the hospital system and the finance committee. The first year we spent just learning each other’s language.
Does a formal education help? I don’t understand accounting. I can read a spreadsheet and I can sniff out inconsistencies. Cardiologists don’t want to be a CFO but we want to participate in the discussion about how the service line will move forward in terms of day-to-day operations and capital allocation. So much of what we do is capital intensive.
What value does the physician bring to finance committees?
The data are 91 to 99 percent of all costs associated with healthcare are driven by the physician’s pen. The physicians who understand the financial backend of things will look at them in a different way in terms of what they choose to do. That doesn’t mean they will choose the less costly thing. It means they will be mindful about being as efficient as possible.
As an example, when we first started this endeavor, our PCI supply costs at the hospital were about $3,000 per case. With our physicians, we looked at our interventional cardiologists and what their costs were and how that broke down in stents, balloons, wires, catheters and what types of drugs, and we put that next to their quality. We saw a $2,500 spread from the least expensive to most expensive physician per angioplasty. We saw there was no difference in quality. That begged the question, if there is no difference in quality, what is the extra $2,500 buying us?
Physicians on the finance committee started diving into this and other procedures. They started looking at savings from decreasing the length of stay without increasing the readmission rate. [They realized], ‘If we do that with enough patients, we will generate enough savings so we can invest more money back into the cardiovascular service line. Ah! That’s what is in it for me.’
At our institution, we are exceedingly transparent with our financial data. We found that the more transparent we are, the more engaged physicians are in becoming our partner.
What does the hospital bring to the finance committee?
First, I would say the data. The hospital has been looking at the data for years but not necessarily sharing it with physicians. The hospital brings an understanding of how to run a business to the table.
But here’s where the magic happens. Physicians are really good at looking at numbers. We may not understand accounting but if you teach us, we will apply what you teach us. We will point out the inconsistencies in your data.
That happened a lot when we first started looking at the data. The hospital’s numbers were wrong. There was nobody there to look at the data from a clinical standpoint and say, ‘Huh, this is inconsistent with what we are doing or what we talked about.’ It generated this conversation between the administration and the physicians.
We learned that we will never show physicians the data again before it is fully vetted. Physicians came to respect the hospital for doing that, for not wasting their time with bad data. Then at the meetings, because we had good data, we had amazing discussions back and forth between finance and the cardiologists.
How did you vet the data?
It might be we were looking at contribution margin data and profit and loss on a series of electrophysiology cases. We would look at the contribution margin on an inpatient vs. and outpatient ablation. It might be that we would see quarter to quarter that suddenly the contribution margin dropped dramatically.
Rather than present it to our docs, we started digging