Four Ways Radiology Groups Can Use Data in Hospital Contracting
The very nature of many radiology groups’ governance structures—highly democratic, split among multiple partners, and with each partner’s vote given equal weight—creates an unfortunate tendency toward emotional decision making. As the inside joke goes, in a radiology practice, you call 99 votes versus one vote a tie. Decision making can easily be hampered by one or two dissenting perspectives, and too often, the squeaky wheel gets the grease; the most emotional perspective carries the day. Having data is the key to removing emotion from the decision-making process, and nowhere is this more true than for hospital contracting. For many groups, contracts are about much more than dollars and cents; they are about relationships, and this invites emotion into evaluations that now—more than ever—should instead be focused on hard factors such as staffing, revenue, and productivity. Further, when a radiology group is fluent in speaking about having data and what that means for the contracting process, decision making is expedited. Hospitals can be slow to respond to requests for data, meaning that groups must be ready to act on information quickly when it comes through. A familiarity with certain metrics will make the group as responsive as possible to new opportunities and impending challenges. A natural place to begin is in using these data to assess the group’s current market position. Financial Health To assess your group’s current financial health, you will need a variety of internal measurements, most of which can be supplied by your billing office or provider. These include productivity measurements, either by radiologist or in general; total volume, as well as volume by modality; how many shifts your group is covering; and service measurements, such as average turnaround time at different hours of the day. Service measurements, in particular, are becoming an increasingly common feature of hospital contracts, making it healthy for your group to understand where it stands at any given time. There are two causes of this trend: The first is cold calls from teleradiology companies, which tend to offer hospital administrators hard-and-fast guarantees on turnaround time; the second is internal hospital initiatives for improving quality, such as initiatives aimed at reducing emergency-department waiting times. Even if your group is not currently evaluating a hospital contract, it is important to know what kind of turnaround time you are averaging and what you would have to change, in terms of staffing, to achieve a competitive turnaround time, if requested. Without a comprehensive understanding of where your group is, you will find yourself unable to determine where it might go. Contract Evaluation Evaluating a new contract opportunity is very similar to reassessing the viability of an existing contract, and both processes are vital to your practice’s survival: Any contract your group has held for some time might not be working as efficiently as it would if you started the relationship today. Look at data, including individual productivity, modality by volume or anticipated volume, revenue or anticipated revenue, and staffing requirements. Your group will be able to determine very quickly whether a new contract is a financially viable option; for an existing contract, you will rapidly be able to assess whether you are staffed optimally to achieve the best possible revenue and efficiency. When evaluating an existing contract, be self-aware and understand that there is likely to be a bad habit or two that your group will need to break. Look at the data objectively, as if they were fresh, and let them guide your response to any inefficiencies or issues you might uncover. Stipend Justification Stipends, once a relatively common feature of hospital contracts, have been disappearing in recent years. These days, there must be a catalyst or specific justification for a hospital to offer a radiology group a stipend. If your group is seeking a stipend from a hospital, having the data to justify your request is critical. Some examples of justifications for stipends include time dedicated to the hospital’s residency program, in which case, you would document and report on the time spent by your radiologists to support that. If you outsource night call to a third-party vendor because the hospital requires 24/7 service, data on what you pay that vendor and how often it is used will be useful. If the hospital has a large Medicaid population, being able to demonstrate your group’s challenges in collecting reimbursement for that population will help. In short, begin with your group’s purpose in asking for the stipend and aggregate data to support your case. Even if one administrator is carrying the banner of your group, the committee of administrators to which he or she reports might not be; data, not emotion on the part of an individual or two, will always carry the day. Participation in New Delivery Models A data-driven approach to understanding your group’s market position and the viability of its contracts will also prepare your group well for emerging delivery models, in which data will be used to prove everything from clinical quality to patient satisfaction. In this situation, your group should takes its cues from the hospitals with which you work. Find out what they are measuring, and be sure you are measuring it as well; if possible, join your hospitals’ conversations about any future service or performance measurements. These measurements might start out as nonjudgmental data collection, but it is a safe assumption that they will not stay that way as accountable-care organizations, integrated delivery systems, and other emerging models take hold. If a hospital is measuring any aspect of your group’s performance, ask it to share the results with you, and be an active participant in conversations about how your group can improve. When the hospital starts considering new models, you will share its knowledge base, positioning you to continue the relationship well into the future. Jana Landreth, CPA, is director of practice management for Medical Management Professionals.