The Hospital as a Customer

March 19th, 2009

Radiologists have long enjoyed an almost symbiotic relationship with their hospitals. The hospitals provided the equipment, technologists and support and the radiologists, the specialized expertise to support the diagnostic consulting needs of the medical staff. Economically it worked for both parties. Then times began to change and in an unprecedented series of events, radiology practices—even very large ones—found their contracts terminated. What the heck happened?

I used to hear from the radiology department manager that the only time radiologists showed up for hospital meetings was at capital budget time—where they proceeded to ask for millions of dollars of new equipment. Not just ask—demand. He laughed when he told me we were getting a new CT and updated interventional room but the cardiologists were turned down for a new treadmill.

And then we get to how radiologists and hospitals define quality. Radiologists look at credentials, including where their colleagues went to school, which fellowships were completed and what subspecialty expertise is added to the practice. The hospital definition of quality frequently involves incurring minimal complaints from the medical staff, participation in marketing efforts and on hospital committees, causing few morale problems among the technologists and department staff, signing reports promptly and willingly adopting new technology such as voice activated dictation. We begin to appreciate the divergence of perspectives.

In terms of behavior, the old style radiology practice still seems to consider its hospital contract an entitlement. The hospital views it as a business and they know they are often the largest single source of revenue for their radiologists. The old style group asks the hospital to pay for nighthawk coverage. The hospital may then actually help bring in the organization that can establish strong ED service levels—and later, an alternative to the group’s perceived negativity and demands.

The perceptive radiology group sees the hospital as a major customer. And strategically they are asking questions. What does that customer feel is important and how do we increase our value as a business partner? How do we work with the administration to develop a strategy to improve radiology services? How do we support internal improvement efforts? How does radiology become a player for the long term?

It is a time of change and challenge—and opportunity.  There is much to be gained and lost.  Which side will you be on?

How hard can it be?

January 7th, 2009

The first time I heard this comment occurred as a radiologist asked me to step in as the practice administrator.  The group had been searching for “the best man for the job” and wasn’t experiencing stellar success.  On the other hand, I had worked as their business development director and most recently, ran the billing office several days a week as the former practice manager worked with the hospital on special projects (and was then hired by the hospital). 

“How hard can it be, Kroken?  You front the practice and go to some meetings.”  Since my typical career choices were made on the basis of  “more guts than brains,” I accepted.  And like many new practice managers, I was questioning the wisdom of that decision after only a few months.

Granted, being a practice manager does not involve life and death decisions of the kind faced by radiologists many  times each day.  However, the nature of the position–and the stress levels involved–represent a formidable challenge and no matter what your educational level or even experience in other industries, you are most likely not prepared.  This is reinforced repeatedly as I find myself talking to managers (including radiologists who have just been given practice oversight responsibilities) through the transition–and some truly talented managers have not made it!

The business of radiology is complex, ever-changing and rapidly evolving.  Experience is valuable as long as it doesn’t become stagnant.  Last year’s knowledge may (or may not) be valid today and after 19 years in the radiology saddle, I still work on my skills and knowledge every day.     

Some (and only some) of the issues:

     1.  You are working in a highly regulated industry.  There are more than 100,000 Medicare regulations alone and in terms of compliance (or violations), ignorance of the law is no excuse.  You have a “know or should have known” expectation that governs the actions of everyone in the group, from physicians to the newest charge entry person.  The marketing concepts that make sense in virtually any other business situation are illegal in radiology.  Ditto for aggressive contracting and pricing.  And in a hospital-based group if you make a billing error (”abuse”), you probably did so 8,000 times before you discovered it. 

     2.  In addition, you have the usual issues related to personnel management in terms of compliance with the Americans with Disabilities Act (ADA), the Fair Labor Standards Act (FSLA), state employment regulations and more—much more.  OK, so you only deal with these on a daily basis with virtually every employee interaction and they are behind the scenes, usually surfacing later as something like an EEOC suit following termination.

      3.  Revenue–that’s a biggie.  As long as physicians make at least as much as they did the previous year (providing it was a good year), preferably more, you are doing a good job.  If they make less, you are not–and it doesn’t matter if the reasons are out of your control.  (That may not seem fair and it’s a major stressor for managers, but it is the absolute Darwinian reality of the business).  If the group hires too many new physicians, purchases too much new equipment, changes the bonus structure, loses a contract or Medicare rates tank for the year–oh, well.  It’s your job to make it work.

      4.  The  infinite challenge of reporting to highly intelligent bosses.  On one hand radiologists are delightful to work with.  They are bright, well-educated and for the most part, open to new ideas.  On the other hand, each partner expects to have his/her issues prioritized and there are always several people in any group with fairly extensive lists of priorities.  And they seem to call within 5 minutes of each other.  It’s not that any single question, concern, idea or analysis is unduly complex or demanding it itself, it’s just that the cumulative effect can become overwhelming.  As a matter of fact, this is where new managers seem to struggle–or break under the strain.

In total, the entire administrative challenge is more often one of volume rather than the complexity. There are definitely intellectually demanding projects, but the trick is to complete them accurately while dealing with interruptions at 30-second intervals.  Granted, if you aren’t spending a portion of your day keeping up with regulatory and reimbursement changes you will probably be severely bitten in the butt at some point–but the art form lies in developing the ability to juggle projects and requests without dropping anything.  (God forbid you make a math error on anything–but that’s another story).  As a colleague so eloquently stated, “It’s like being pecked to death by baby ducks.” 

So here you are.  You started on an analysis of contract rates (by payor and modality) at 8:00 with the goal of being done before a 9:00 meeting–plenty of time.  And then–the imaging center manager needs you to call an irate referring physician office, you receive a call from the recruitment chair to get out an offer to a new physician immediately, find out there is a problem with the hospital downloads that has been going on for more than a week, are asked by a physician to verify what is being paid for a certain procedure because it takes a long time to read and he isn’t sure if we should continue to do them if we aren’t being paid enough, the hospital radiology manager calls to complain the physicians aren’t signing their reports in a timely manner and by the way, Dr. X is being rude to the ultrasound techs and refusing to read cases, you counsel a manager who wants to fire an employee that she does not have sufficient documentation to do so–and handle a few dozen other miscellaneous phone calls and “quick questions.” 

It’s 2:30, the analysis isn’t yet complete, you realize you haven’t eaten lunch yet and one of the physicians calls during a slow afternoon in the reading room to ask, ”So what’s going on in the business office today?”

You unsuccessfully try to remember what the heck has happened since you arrived at work, but it’s a blur–so you just say, “The usual stuff.”

How hard can it be?

Happy Holidays

December 15th, 2008

Happy holidays to all our clients and friends!!