Small Practices Find New Ways to Stay Afloat

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Innovation in the desert

“At the end of the day, healthcare is a volume business,” says Brian J. Silverstein, MD, senior vice president of The Camden Group in Chicago, which handles the integration of groups among other services. “The U.S. healthcare model is trying to migrate from a volume-based payment system to one based on performance. While it may be five to 10 years before that model is set, there are incremental pieces being put in place.”

Until we shift away from the present volume-based model of reimbursement, small cardiology practices, such as Desert Cardiology of Tucson, Ariz., are doing what they can to not only survive but bring added value to their services.

Desert Cardiology, which has served two hospitals in the northwestern portion of the city for 20 years, has seven cardiologists (four interventional, two invasive, one noninvasive), as well as one electrophysiologist and one nuclear medicine physician. Two years ago, the practice opened a sleep lab as a way to generate more revenue and address the increasing number of heart patients with obstructive sleep apnea. At the lab, which is separate from the other six clinics, studies are read by a qualified sleep physician. Follow-up visits for compliance and status are conducted by a cardiologist.

“It’s a profit center for us,” says Jeff Askam, the practice’s CEO. “It has helped solidify our existing relationships with referring physicians, as well as bring in new referrers, because 15 to 20 percent of these patients are from outside referrals.”

The practice has three echo techs but realistically needs only 2.5 to perform their stress and rest studies. Rather than layoff a tech or reduce hours, the practice now offers a carotid intima-media thickness (CIMT) ultrasound scan, an indicator for heart disease risk. The practice pays a fee to Medical Technologies International to use their CIMT knowledge-based software. Not covered by insurance, the CIMT offering resulted in 400 cash studies last year, generating a profit for the practice, Askam says. “More than half of referrals came from outside physicians, again helping to solidify existing referral relationships, as well as develop new ones,” he says.  

To counter the reimbursement cuts to practices for nuclear cardiology, the group decided to “grow their way out of the potential hole” by increasing growth in new patients, each of which is “worth about $800 in the first year,” Askam says. The practice hired a full-time marketing person to help identify potential referring physicians and to strengthen  internal processes so that current referrers don’t slip through the cracks. “We tried to make life easier for the referring physicians and this person has had a significant impact on them,” Askam says.

Another profit-making initiative undertaken by the practice involves imaging oncology patients. One of Desert Cardiology’s physicians noticed that an occasional oncology patient would need an echo study. The practice put together a proposal for the large group of oncologists in the area. The oncologists wanted a guaranteed 24-hour turnaround for each echo report. The practice now has their business.

The group also is in the process of buying a new nuclear camera that, unlike its current camera, can handle thallium as well as technetium studies. Imaging time is faster by nearly 40 percent, potentially increasing throughput and decreasing radioisotope dose, Askam says. “It’s a potential revenue stream, but not necessarily something that will control costs.”

In addition, the practice spent time with staff polishing its customer service and initiated a series of cardiology-specific lectures at retirement communities, which are free and include refreshments. The first lecture, which drew about 80 participants, resulted in about five new patients “almost immediately afterwards.” The second lecture drew about 120 participants and resulted in another round of new patients. “If these people experience a cardiology issue, we want them to remember us,” Askam says.

“In today’s economic environment, practices have to be creative; they need to leverage their relationships with hospital and community physicians,” Askam says. “Physicians might tend to get complacent. Our physicians try—at least once a day—to call a referring physician on a medical issue to remind him or her that we are here. Before the rise of hospitalists, it was easier to stay in touch with primary care docs. Now you don’t see them as much, and we have to find a way to stay in front of them.”

Mile-high ingenuity

Like many private practices, Parkside Cardiology in Colorado Springs, Colo., is feeling pressure from all sides, but the most difficult aspect is the reimbursement climate, says William C. Lueck, executive director of the group. “The 2010 Medicare Physician Fee Schedule hit us hard. We’re in a very competitive environment; we’re the third largest practice in the area and the only practice that significantly covers both regional hospital systems.”

Parkside consists of seven cardiologists (three interventional and four general), along with 18 FTEs in one location. Last year, the practice lost a cardiologist, but recruited another later in the year. “It will probably be the last one we recruit for a while,” says Lueck.

Between this year and last, the practice laid off 10 percent of its workforce, reduced hours by 10 percent in the remaining employees and froze wages. Positions that will open due to attrition could possibly remain open. “We are already lean,” Lueck says, “with less than three FTEs per physician, which is a low average in cardiology.”

With a leaner staff, the practice relies more on the EMR to have reliable data to make the best clinical decisions. The practice is utilizing American College of Cardiology (ACC) appropriateness criteria to help map care; partnering with the ACC PINNACLE network to submit quality data and potentially be eligible for pay-for-performance bonuses; and exploring the Physicians Quality Reporting Initiative (PQRI). “We’re also making ourselves ready for the 2011 stimulus money by analyzing the meaningful use criteria and ensuring our practice is ready to be compliant.”

The group abandoned a CT scanner in early 2009, which they co-owned with vascular surgeons. Two full-time sonographers handle a high-volume echo service line and while the echo cuts have hurt Parkside, the drastic reduction in nuclear cardiology reimbursement “has been devastating,” Lueck says. He and colleagues are considering PET options, such as a mobile unit, strategic partnerships with existing PET scanners or owning a scanner. Their revenue also has been reduced by 3 to 5 percent by the elimination of consult codes.

Regarding hospital integration, Parkside has discussed the topic, not yet with any seriousness, but would rather remain a solo practice. “I wonder if we understand everything on the hospital side,” Lueck says. “I don’t believe CMS will sustain the dichotomy of a payment structure where physician offices are paid a lot less for similar hospital services. The next step would be for CMS to cut the reimbursement for those same services in the hospital setting. We could be jumping from one sinking ship to another.”