The Business of Medicine: How ASC Physician Owners Can Become More Financially Aware
Urfan Dar, MD, and Joshua Siegel, MD, and Kenneth Pettine, MD, are physician owners of ASCs who take active roles in their centers' business operations and management. Dr. Dar is a pain management physician, owner and medical director of Theda Oaks Surgery Center in San Antonio, Texas; Dr. Siegel is the director of sports medicine at Access Sports Medicine and Orthopaedics in Exeter, N.H.; and Dr. Pettine is a spine surgeon and founder of The Spine Institute and Loveland (Colo.) Surgery Center.
The three physicians discuss why it is crucial for physicians to have at least a basic understanding of their ASC's business operations and how less involved physicians can renew their efforts to take more active roles.
The importance of paying attention to ASC finances.
It is critical for physician owners to get involved in a center's finances, Dr. Dar says. After looking at reimbursements, he and his ASC team realized Blue Cross Blue Shield was only paying $25 for intra-articular hip injections without any rationale. This discovery led them to move the procedure to an office setting.
"Every physician owner has to be aware of the financial feasibility of any procedures performed in the ASC," Dr. Dar says.
Neglecting to monitor the financial side would be irresponsible for physician owners, Dr. Siegel says. While patient safety outcomes and the delivery of care is first priority, increased regulations, changes in health plans and reimbursements now demand more attention than ever before.
"Complacency and a passive approach will most certainly have negative financial impacts on the long term sustainability of an ASC and for the individual physicians involved," he says.
Becoming more engaged and business-conscious physicians lets physicians know their efforts are being appropriately compensated.
"I cannot begin to emphasize the importance of keeping a finger on all of this and would also expect monthly reports which can be easily read," Dr. Pettine says. "If you are given financial information that is not comprehensible, then request information which is easily understandable."
Steps to becoming more financially aware.
Some physicians will always be more financially-inclined than others, Dr. Siegel says. The other half will rely on nurse directors, ASC administrators and other key staff members.
"As physicians we need to make a commitment to continuing to educate ourselves on the healthcare laws and using our staff as a resource," he says. "We should have an understanding of surgical coding and be aware of the various contracts and allowable of the many different insurance companies we service."
A simple step toward learning more about the business is to attend all business meetings, Dr. Dar says. This can also help a physician learn more about payer contracts and reimbursements. Communication with staff members is also necessary to being on the same page and being able to adapt to any industry or financial fluctuations.
Encouraging business and administrative staff to get involved in healthcare trade groups can also help the entire center to be more aware of healthcare legislation and get advice on updates, Dr. Siegel says.
Dr. Pettine also recommends engaging with accountants outside of the ASC to make sure all financial records are being kept accurately and in line with legal regulations.
Managing in an uncertain environment.
The entire industry is a tumultuous time for many aspects of the business of healthcare, from the Patient Protection and Affordable Care Act to the upcoming ICD-10 implementation and reimbursements drops. All of these changes will have repercussions for physician owners.
For instance, ICD-10 requires a significant initial investment for technology updates, staff training and may negatively impact cash flow in its first few months. The PPACA will require ASCs to stay as lean as possible, and reimbursements drops may challenge surgery center management to find additional income sources.
"Taking a close look at all processes and procedures, contracts and finding any other ways to improve efficiencies while delivering exceptional care will have a direct correlation to the long term sustainability of the ASC," Dr. Siegel says. "In some markets, it may benefit the ASC to consider partnering with a larger organization with more leverage in negotiating contracts to maximize payments among other advantages."
Challenges for physician owners.
One of the biggest challenges can be demanding schedules and figuring out how to add business duties into an already full day. These demands placed on surgeons can make it difficult to invest the time in researching and understanding the financial or business side of a practice or ASC.
"I think that for most physicians, maintaining a general awareness and relying on an administrator and management staff can help overcome these challenges," Dr. Siegel says. "But some physician oversight is still vital to the long term success of the ASC and will insulate the organization in the case of a sudden departure of a key staff member or if other circumstances arise where the physician is required to get more involved."
Another challenge unique to physician owners can be when great patient care demands a less than optimal business decision. Dr. Dar has worked with patients who use assisted transportation and will need to occupy a bed for four to six hours. While this is not the most operationally efficient arrangement, it's what the patient needs for proper care.
"We still do this since theses patients need care and have no where to go," he says.
Encouraging peer involvement.
It is key to remember that ownership is a team effort, as all physicians in a center must be involved for the ASC to be successful, Dr. Siegel says. Physician owners should work to motivate other physicians in the center to engage in good business practices.
"If there is a majority partner, the majority partner must respect and acknowledge the local healthcare delivery model and give the physicians significant leeway in hiring decisions, financial decisions and facilitate the productivity of the physicians," he says.
Encouraging other physicians to be involved and contribute feedback will positively impact an ASC's financial health.
When the business and clinical intersect.
Physicians who are less invested in the financial side of their practice will often be unaware of ways they could increase their productivity or efficiency and benefit the ASC.
"For instance, if a physician partner insists on using non-contracted, high cost non-reimbursable instruments over contracted equipment the center already owns, it can significantly impact the financial feasibility of the center," Dr. Siegel says.
When physicians take active roles in the ownership of their centers, they will become better business managers but also better physicians who are giving their patients more cost-effective care.
Physicians are the best people in the healthcare industry to understand how to best control costs. However, the industry needs them to have increased participation in the business of medicine, he says.
"We have done a poor job as physicians at retaining autonomy over the delivery of healthcare and have given it up to non-physicians who ostensibly 'understand' the economics better," he says. "This loss of control has led to continual double-digit increases in the costs of healthcare without commensurate increases in outcomes."
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