Ownership of any type of business means balancing income and expenses to ensure profitability and stability. External factors that influence business success include market dynamics (ie, competition, pricing, consumer needs and preferences), product and service innovations, and industry regulations. Changes in all of these external influences are culminating in both opportunities and challenges for urologists and their practice managers.
Declining payer reimbursement, higher business expenses, increasing involvement in patient care by government and private payers, more aggressive competition, novel treatments and surgical techniques, and patient preferences for comprehensive yet cost-effective medical care are just a few market trends that are currently shaping urologists’ and practice managers’ strategic decisions. In order to thrive, progressive urology practices have been forced to take action. Some of the tactics that have been implemented to mitigate risk and improve financial health for urology practices include:
- Increasing patient volume (workload): more patients per day, more surgeries per week, the addition of evening hours
- The addition of urology staff or the consolidation of private practices to broaden the catchment area
- Partnership with local or regional hospital networks
- Service-line expansion (ie, drug infusion services, pathology, diagnostic imaging, radiation, surgery, clinical research)
- Development of in-house specialty clinics (ie, prostate cancer, bone health)
Panelists described concrete steps that their practices have taken, as well as the success associated with implementation. One practice documented a 15% year-to-date increase in office visits, primarily due to care provided to current patients rather than new patients. Other urology practices have effectively expanded their service geography to attract new patients, added clinics, and opened new appointment times to enhance patient access to care.
To preclude high rates of missed patient appointments (“no shows”), which affect office productivity and revenue, some practices contact patients well in advance of their appointments. This proactive step reduces no-show and last-minute cancellation rates, as well as facilitates payments from financially risky patients. One urology practice has developed a “virtual” schedule that is designed to accommodate chronic no-show patients, fitting them in without affecting the “standard” schedule. Panelists also discussed the merits of charging patients for missed appointments, but this practice is not commonplace at this time.
Both government and private payers require urologists and other physicians to document and improve the quality of patient care. Panelists highlighted their participation in Medicare quality initiatives, including the Physician Quality Reporting System, as well as their experience with commercial payers’ increasing documentation and comparison of urology practices’ “cost to cure” statistics. One panelist recalled a commercial payer that requires urology practices to develop their own quality care (or “pay for performance”) metrics prior to engaging in contract negotiations.
Although evaluations of the quality of patient care are perceived to be important, their administration costs remain uncompensated. For urology practices, the expenses associated with collecting and reporting these data are included in the overhead. To address this, some panelists referred to the Large Urology Group Practice Association working group, which is designed to support member practices by developing and disseminating measurable and relevant quality-care metrics.
In response to the Affordable Care Act, many markets are seeing the growth of accountable care organization (ACO)-like arrangements. Some panelists expressed concerns that, particularly in markets that are dominated by primary care practitioners (PCPs), ACO-like arrangements will result in the appropriation by PCPs of patient services that are best provided by urology specialists. In such settings, urologists need to be prepared to “defend” their position as experts in the care of patients with prostate cancer.
To maintain practice profitability, various reimbursement arrangements, including at-risk or capitated arrangements, are becoming more commonplace among physician groups. One panelist’s practice is involved in capitated arrangements with 2 different payers. Ancillary services (imaging, radiation), biologics, and other specialty medications (denosumab, sipuleucel-T, and radium 223) are not included in these contracts. Although these arrangements have been profitable, the practice is currently renegotiating the administration of specialty medications. Panelists in other regions of the country have chosen to expand their geographic coverage (and urology staff) to grow patient volume, as well as to enhance their market-specific leverage with payers. One urology group has also considered hiring a medical oncologist to support their expanding prostate cancer care clinic.
Despite past communication challenges with payers (typically regarding contracting, prior authorization requirements, and step-edit restrictions), private urology practices now recognize that their financial objectives are increasingly aligned with those of payers. At the same time, payers now appreciate that supporting independent physician practices (relative to hospital-based care settings) has meaningful consequences in terms of both the quality and cost of patient care.
Panelists noted positive consequences of including payers’ medical directors, whom one dubbed “the voice of [clinical] reason,” in contract negotiation meetings. In addition to more “fair” contracts, such meetings lay the groundwork for constructive future collaborations with the payer. Panelists believe that quantitative data regarding differences in patient satisfaction, as well as the cost of care, between office- and hospital-based sites of care will enhance the likelihood that these productive payer–practitioner relationships will continue.
The unreimbursed time associated with obtaining prior authorizations for branded medications for patients with prostate cancer can be highly problematic for urology practices. Many practices rely on manufacturers’ support programs to ease the burden for both staff members and patients. In the ongoing effort to improve practice efficiency and reduce costs, panelists extolled the value of patient support and reimbursement programs for high-cost medications, particularly those provided by the manufacturers of denosumab and sipuleucel-T. Both of these programs were cited as practice-friendly and easy to use. With the help of these programs, practices represented by the panelists have had very few issues in obtaining reimbursement for denosumab and sipuleucel-T.
Use of specialty pharmacy services is relatively low among urology practices. However, panelists acknowledged the importance of these services—including reimbursement support, patient counseling, Risk Evaluation and Mitigation Strategy program management, and patient compliance programs—that many pharmacy-benefit management firms provide. Some urology practices employ nurse navigators and/or financial counselors to provide similar patient assistance services, but their time to perform these tasks is generally unreimbursed. Based on their state’s regulations, other urologists are exploring the addition of pharmacy (dispensing) services to their practices to capture service-related revenue.
Throughout the Prostate Cancer Steering Committee meeting, it was clear that the practice of urology is complicated by multiple and often intertwined influences: financial, logistical, political, and legislative. Despite this, however, the desire to optimize care for patients, particularly men with prostate cancer, remains strong among participating urologists and practice managers. They summarized their recommendations by emphasizing the need to educate patients and families, as well as payers, about the unique expertise that urologists offer men with prostate cancer. It is clear from their example that urologists who gain professional satisfaction from managing early-stage and metastatic prostate cancer can also benefit financially. While barriers to change may initially appear daunting, panelists consistently and enthusiastically emphasized the personal and financial rewards associated with urology practice models that offer continuous, comprehensive care for patients with prostate cancer.
About the Authors
Dr Raedler and Mr Welz are medical writers with Engage Healthcare Communications, and Mr Young is Chief Executive Officer, Regional Urology, Shreveport, Louisiana.
Author Disclosure Statement
Dr Raedler, Mr Welz, and Mr Young have nothing to disclose.
Executive Vice President
and Chief Financial
|John B. Forrest, MD
Urologic Specialists of
Urology Specialists, PC
Chief Executive Officer
Regional Urology, LLC
|Gary M. Kirsh, MD
The Urology Group
|Daniel A. Schonwald, CMPE
What Keeps Urology CEOs and Practice Administrators Up at Night?
Management of a urology office—large or small—is fraught with challenges, particularly as regulatory and fiscal environments evolve. Increasing costs and decreasing reimbursements have compelled practices to offer new products and services to maximize business efficiencies, and to consider strategic alliances. The following interactive discussion highlights the challenges and outlines potential solutions for the issues faced by today’s urology practices, especially in adopting new treatment options for patients with metastatic castrate-resistant prostate cancer.
Joel Young (Moderator): We are in a perfect storm of declining reimbursements, increasing overhead, and more camels’ noses in our tents, if you will. Government and regulatory agencies have a never-ending desire to garner more information and restrict our payments, which leads to increased competition and consolidation. We talked about recent consolidations in order to control overhead numbers and, of course, the expansion of hospital-based practices. In our practice, we must be smarter with our money than we were last year. We are pushing fewer people to do much more work. My question for you is what are you doing to address financial challenges?
John Forrest: To increase cash flow, we are making everybody see more patients, including me. We have had a 15% year-to-date increase in office visits.
Steve Bass: We think one of the ways to protect ourselves in the future is to aggressively expand into markets where the service line or the availability of services is extremely poor.
Dr Forrest: Practices are venturing out into other ancillary services, such as pathology, diagnostic services, radiation, surgery, and clinical research to replace some of the revenue that is being carved out, and to keep their practices financially whole.
Daniel Schonwald: In our market, Medicare and Blue Cross make up 78% of reimbursement. The biggest reimbursement problems that I have are with Medicare, especially with the sequester issue. We are grappling with how to address this issue.
Mr Bass: My biggest fear right now is not about reimbursement, it is the pervasiveness of high-deductible insurance plans. People in the new insurance exchanges as well as employed individuals with high-deductible plans will have insurance, but they will basically be the walking uninsured because few will be able to pay their deductibles. Employers are not able to continue to subsidize employee health insurance, and will end up pushing more of the financial burden to the employee/patient. We are rapidly moving to a system where patients who are scheduled for a procedure must pay for their portion upfront. In addition, patients who require services in the office but do not satisfy their outstanding balances will not be seen.
We have already had a couple of cases in front of our medical board regarding patient abandonment, which we won. It might sound heartless, but at the end of the day, we cannot survive unless we are paid. We are not a charity.
Sharon Rouleau: Patients who have high deductibles for things like computed tomography (CT) scans are coming in screaming, “The doctor should have told me that I was going to have to pay for this out-of-pocket!” We then try to explain that any charges are based on their insurance policy and that they need to know about their deductibles and other out-of-pocket expenses. The typical response is, “No, the doctor should have known that.”
So the doctors are now rethinking whether the patient really needs another CT scan. Who is supposed to know the provisions of each policy? It can become quite a morass.
Gary Kirsh: You cannot win this game by reducing costs. It is not feasible to do that. You cannot win. Back to products like Provenge, we cannot afford to give these products up to the oncology people.
Dr Forrest: If a practice says that there are financial or logistical reasons to avoid using new products, such as Provenge, they either do not understand enough or they are making excuses. They need to move away from “cruise control” and take some risks to make it in this new world.
Mr Bass: Doctors never talked about costs before. Now we talk about it. I want each patient to know immediately that there is a financial aspect to their healthcare and that they need to deal with it. The quicker that message gets delivered, the better off all parties will be.
At the end of the day, what we are going to see is that patients who cannot pay will just not show up at all. I think accountable care will result in unintended consequences. People will not come to the office seeking care until they are really sick. At that point, it is much more expensive to treat them. They can go to the hospital, but then hospital costs will skyrocket. It is going to be very messy out there over the next 12 to 18 months.