At the 11th Annual Spine, Orthopedic & Pain Management-Driven ASC Conference on June 14, leaders from four pain-management ambulatory surgery centers shared their experiences improving profits and forming referral relationships in a panel session moderated by Barton Walker, JD, a partner at law firm McGuire Woods.
The panel included Barry Karlin, PhD, CEO of Prospira Pain Care based in Mountain View, Calif.; Fred Davis, MD, president and co-founder of Grand Rapids, Mich.-based ASC management firm ProCare Systems and clinical assistant professor at Michigan State University College of Human Medicine; Scott Glaser, MD, president and co-founder of Pain Specialists of Greater Chicago; and Gordon Mortensen, MD, co-founder of Innovation Pain Care based in Franklin, Wis.
Below is an edited transcript of the panel discussion.
Mr. Walker: What should pain management ASCs be looking at to drive profits?
Dr. Davis: In addition to clinical tracks, there are business development tracks. The bottom line is important of course, but I don't want others to forget that focusing on that top line is important, too. The biggest threat we face as independent specialists is securing patient volume and payment for what we do.
Dr. Glaser: I was in Washington, D.C., lobbying to make sure we continue to get paid to do these pain management procedures, because some of them have been put on do-not-cover lists. We were there to explain to legislators these procedures shouldn't be on the list — it's like putting ibuprofen on list. This is basic stuff.
Dr. Karlin: You have to focus on patient volume. The central idea there is to focus on being patient centric, doing everything you can to make the patient happy. Every interaction with a patient is a fantastic experience. If a patient calls and a machine answers, that's your first hostile act against the patient. They're in pain; they want to talk to someone. Furthermore, you should be able to see them that day, at worst in a week. Your patients should enter into a beautiful facility, wait no more than 15 minutes to see a physician, and they should get a follow-up call three days later. The value of your website doesn't mean anything unless it brings in many unique visitors, informs them on treatments and costs and helps patients understand what makes you better. Patient volume goes a long way, influencing reimbursement rates and even satisfaction.
Dr. Mortensen: Two things can close a facility overnight: an act of God and act of government. Your center should be protected from both going forward. The best thing for an ASC to do to stay profitable is to stay open.
BW: The industry is moving away from the fee-for-service model, whatever permutation that takes. Is that going to take off, or is fee-for service here to stay?
FD: I've been practicing long enough to see things come and go and come back again. We're coming to an era that looks a lot like the 1970s and 80s, only it's being done differently and more wisely now. Depending where you are in country, you could be in either a primarily fee-for-service or managed care milieu. We're trending toward organized systems of care and organized payment. Over a period of time, we'll likely see a migration from mostly fee-for-service to mostly something else — a blend of fee-for-service, capitated payment and risk sharing models.
BW: Barry, you're in a big and growing company. How are you seeing payment systems changing?
BK: We're seeing a shift in certain RVU-type systems, from the traditional kind where you get a certain number of dollars per RVU to one where you're paid a reward for good outcomes. Perhaps you're paid a base of $70 per RVU, or $100 if you do a good job. Good treatment will be the emphasis, and that concept is up for discussion. We still need to figure out what does that mean, and when you've done it, how do you do it again next time?
SG: In the early days of HMOs, we learned we've got to protect against low cost initiatives, because if you drive cost down too far to the lowest common denominator, you're at risk of being driven out of business. We didn't protect against the downside and ultimately that movement went away, but even the fee-for-service model edged back to become managed care. Interventional pain management fits well with the ACO to limit hospital visits and lower surgical rates as well. I kind of wonder, though, if someone will ever listen to that who's in a position to do something about it. One of the joys of caring for personal injury referrals is that I have totally unfettered command of the patient's care. If a personal injury patient is miserable a week after an accident, I'm going to get MRI and not have to worry about the cost. It's the only area where I'm truly a doctor, but so often for workman's compensation cases, I'm not a doctor and just distributing medication.
The panel then answered questions from the audience, which have been edited in the transcript below.
Audience member 1: What are the best tools and best ways to integrate yourself with other providers, and what should ASC owners do to exert influence in a partnership?
FD: The emphasis for us as specialists is to emphasize the quality and value of what we do and being able to work with what we do. We can tap into volume through ACOs and patient-centered medical homes because we help create best-value care. If we gather this clinical data and outcomes, we can prove that to partners. Larger provider organizations often know some things we don't know, but they don't know quality when it comes to what we do. I think that's the approach we bring to the clinical process.
Audience member 2: Have you run into in your regions' hospital acquisitions of pain practices and long-term referrals for pain physicians? And if so, how do you deal that?
GM: Hospitals have tried to acquire ASCs in our market, but they've been unsuccessful so far. They've had to employ pain management physicians to staff their facilities, but employed physicians, in our experience, aren't as motivated as affiliated physicians to ensure every interaction with patients is superior. Every interaction has to be positive, because negative news spreads to 27 people but positive spreads to perhaps only three.
BW: Panel, are you seeing hospitals or spine groups employ pain physicians directly?
SG: Yes, here in the Chicago market. The model is working so far, but I don't know if it will long term. I wouldn't do it. Pain physicians don't follow the algorithms; many won't do cervical treatments, for example.
FD: We're seeing this in Michigan, where employed pain physicians are basically there to for physician groups to pay for surgery. Radiologists do on demand tests and report to other physicians, then they move on. They don't manage a patient's disease. In a pain management or spine center, I think if we advance pain care as chronic disease, doing that will eliminate 90 percent of competition because they don't want to deal with managing care or treating the disease of pain. The comprehensive approach we take is likely to be successful and present a greater chance to be independent.
BW: What does that comprehensive care look like technologically and in regards to billing?
BK: I think there is lot of discussion about reimbursement rates, and my experience is you never win that battle. You have to accept the world in which we operate. Bundling is out there, those are perennial forces. Patient volume, at the same time, is driven by great treatment.
Audience member 3: We've patted ourselves on the back that if we do good medicine we'll be fine, but by me in Knoxville, Tenn., here's the problem:
After orthopedic surgery groups have exhausted patients' reimbursements and determined they can do no more for these patients, they refer them to us when the patients bring little reimbursement potential with them. We could deny them, but alienate both the patient and the referring orthopedic group, or we can try to attract the patients before they go to the orthopedic group. But so far, this has been unsuccessful because we haven't been able to change primary care physicians' mindsets.
SG: You're never going to convince these hospitals that pain management is the first place for patients to go for back pain. I want to start taking care of workman's compensation cases. I have in my toolbox everything but surgery to treat back pain, but I haven't yet had companies bite on that. I go through workman's comp system for spine and carpal tunnel treatments and knee injections, but you're never going to convince a surgeon, and I've spent a lot of time doing that. It just never seems to be able to break the cycle.
FD: The biggest importance is getting upstream. The referral patterns you have now are unsustainable because the care management systems that are evolving won't allow for it.
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The panel included Barry Karlin, PhD, CEO of Prospira Pain Care based in Mountain View, Calif.; Fred Davis, MD, president and co-founder of Grand Rapids, Mich.-based ASC management firm ProCare Systems and clinical assistant professor at Michigan State University College of Human Medicine; Scott Glaser, MD, president and co-founder of Pain Specialists of Greater Chicago; and Gordon Mortensen, MD, co-founder of Innovation Pain Care based in Franklin, Wis.
Below is an edited transcript of the panel discussion.
Mr. Walker: What should pain management ASCs be looking at to drive profits?
Dr. Davis: In addition to clinical tracks, there are business development tracks. The bottom line is important of course, but I don't want others to forget that focusing on that top line is important, too. The biggest threat we face as independent specialists is securing patient volume and payment for what we do.
Dr. Glaser: I was in Washington, D.C., lobbying to make sure we continue to get paid to do these pain management procedures, because some of them have been put on do-not-cover lists. We were there to explain to legislators these procedures shouldn't be on the list — it's like putting ibuprofen on list. This is basic stuff.
Dr. Karlin: You have to focus on patient volume. The central idea there is to focus on being patient centric, doing everything you can to make the patient happy. Every interaction with a patient is a fantastic experience. If a patient calls and a machine answers, that's your first hostile act against the patient. They're in pain; they want to talk to someone. Furthermore, you should be able to see them that day, at worst in a week. Your patients should enter into a beautiful facility, wait no more than 15 minutes to see a physician, and they should get a follow-up call three days later. The value of your website doesn't mean anything unless it brings in many unique visitors, informs them on treatments and costs and helps patients understand what makes you better. Patient volume goes a long way, influencing reimbursement rates and even satisfaction.
Dr. Mortensen: Two things can close a facility overnight: an act of God and act of government. Your center should be protected from both going forward. The best thing for an ASC to do to stay profitable is to stay open.
BW: The industry is moving away from the fee-for-service model, whatever permutation that takes. Is that going to take off, or is fee-for service here to stay?
FD: I've been practicing long enough to see things come and go and come back again. We're coming to an era that looks a lot like the 1970s and 80s, only it's being done differently and more wisely now. Depending where you are in country, you could be in either a primarily fee-for-service or managed care milieu. We're trending toward organized systems of care and organized payment. Over a period of time, we'll likely see a migration from mostly fee-for-service to mostly something else — a blend of fee-for-service, capitated payment and risk sharing models.
BW: Barry, you're in a big and growing company. How are you seeing payment systems changing?
BK: We're seeing a shift in certain RVU-type systems, from the traditional kind where you get a certain number of dollars per RVU to one where you're paid a reward for good outcomes. Perhaps you're paid a base of $70 per RVU, or $100 if you do a good job. Good treatment will be the emphasis, and that concept is up for discussion. We still need to figure out what does that mean, and when you've done it, how do you do it again next time?
SG: In the early days of HMOs, we learned we've got to protect against low cost initiatives, because if you drive cost down too far to the lowest common denominator, you're at risk of being driven out of business. We didn't protect against the downside and ultimately that movement went away, but even the fee-for-service model edged back to become managed care. Interventional pain management fits well with the ACO to limit hospital visits and lower surgical rates as well. I kind of wonder, though, if someone will ever listen to that who's in a position to do something about it. One of the joys of caring for personal injury referrals is that I have totally unfettered command of the patient's care. If a personal injury patient is miserable a week after an accident, I'm going to get MRI and not have to worry about the cost. It's the only area where I'm truly a doctor, but so often for workman's compensation cases, I'm not a doctor and just distributing medication.
The panel then answered questions from the audience, which have been edited in the transcript below.
Audience member 1: What are the best tools and best ways to integrate yourself with other providers, and what should ASC owners do to exert influence in a partnership?
FD: The emphasis for us as specialists is to emphasize the quality and value of what we do and being able to work with what we do. We can tap into volume through ACOs and patient-centered medical homes because we help create best-value care. If we gather this clinical data and outcomes, we can prove that to partners. Larger provider organizations often know some things we don't know, but they don't know quality when it comes to what we do. I think that's the approach we bring to the clinical process.
Audience member 2: Have you run into in your regions' hospital acquisitions of pain practices and long-term referrals for pain physicians? And if so, how do you deal that?
GM: Hospitals have tried to acquire ASCs in our market, but they've been unsuccessful so far. They've had to employ pain management physicians to staff their facilities, but employed physicians, in our experience, aren't as motivated as affiliated physicians to ensure every interaction with patients is superior. Every interaction has to be positive, because negative news spreads to 27 people but positive spreads to perhaps only three.
BW: Panel, are you seeing hospitals or spine groups employ pain physicians directly?
SG: Yes, here in the Chicago market. The model is working so far, but I don't know if it will long term. I wouldn't do it. Pain physicians don't follow the algorithms; many won't do cervical treatments, for example.
FD: We're seeing this in Michigan, where employed pain physicians are basically there to for physician groups to pay for surgery. Radiologists do on demand tests and report to other physicians, then they move on. They don't manage a patient's disease. In a pain management or spine center, I think if we advance pain care as chronic disease, doing that will eliminate 90 percent of competition because they don't want to deal with managing care or treating the disease of pain. The comprehensive approach we take is likely to be successful and present a greater chance to be independent.
BW: What does that comprehensive care look like technologically and in regards to billing?
BK: I think there is lot of discussion about reimbursement rates, and my experience is you never win that battle. You have to accept the world in which we operate. Bundling is out there, those are perennial forces. Patient volume, at the same time, is driven by great treatment.
Audience member 3: We've patted ourselves on the back that if we do good medicine we'll be fine, but by me in Knoxville, Tenn., here's the problem:
After orthopedic surgery groups have exhausted patients' reimbursements and determined they can do no more for these patients, they refer them to us when the patients bring little reimbursement potential with them. We could deny them, but alienate both the patient and the referring orthopedic group, or we can try to attract the patients before they go to the orthopedic group. But so far, this has been unsuccessful because we haven't been able to change primary care physicians' mindsets.
SG: You're never going to convince these hospitals that pain management is the first place for patients to go for back pain. I want to start taking care of workman's compensation cases. I have in my toolbox everything but surgery to treat back pain, but I haven't yet had companies bite on that. I go through workman's comp system for spine and carpal tunnel treatments and knee injections, but you're never going to convince a surgeon, and I've spent a lot of time doing that. It just never seems to be able to break the cycle.
FD: The biggest importance is getting upstream. The referral patterns you have now are unsustainable because the care management systems that are evolving won't allow for it.
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