Bob Orzechowski, MBA, SPHR

confidencetoughManagement

Nov 20, 2013 (3 years and 8 months ago)

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Bob
Orzechowski
,
MBA, SPHR

Chief Operating Officer

Berks Hematology Oncology Associates, Ltd
.

West Reading, PA


roberto@berkshemonc.com

(
tel
) 610.374.4404 ext. 111

After This Session You Should Be Able To:



Identify the Primary Business Management Challenges
in a Private [Hem
-
Onc
] Medical Practice



Identify Potential Tools & Interventions to Address
Those Challenges



Recognize Linkages (interrelationships) Between the
Various Components of the
Business,
the Necessity
&
their impact on the enterprise


Discuss specific examples of successful
and less successful strategies & tactics


Respond adequately to questions and
concerns



MISSION
-

What do we want to
accomplish?


PEOPLE
-

HUMAN CAPITAL
-

the
cumulative skills and knowledge of
employees


STRUCTURAL CAPITAL
-

the physical and
intangible assets (systems, databases)


PROCESSES
-

how it all happens



“The soul of practicing medicine is a
solemn social contract under which
patients surrender themselves to us and
trust us to do what is best for them.”



Joseph Simone, M.D.


US


“right
vs

wrong”


THEM


“win
vs

lose”


A Strategic Concept


Good tactics will not compensate for a bad
strategy



A Process To Envision And Realize The
Future



Leadership & Management Imperative




1. DEVELOPING A CONCEPT OF THE ORGANIZATION AND FORMING A
VISION OF WHERE THE FIRM SHOULD BE HEADED (
THE MISSION: defines
purpose & direction, determines priorities, reflects values)



2. TRANSLATING THE MISSION INTO SPECIFIC LONG
-
RANGE AND THEN
SHORTER
-
RANGE PERFORMANCE OBJECTIVES



3. CRAFTING A STRATEGY:
(Where does the organization want to be?)




4. IMPLEMENTING A STRATEGY:
(How can the organization get to where
it wants to be?)



5. EVALUATING PERFORMANCE AND INITIATING CORRECTIVE ACTION:
(How will the organization know when it has arrived?)


BHOA's mission is to provide the
highest quality health care in our
sub
-
specialties of medical
oncology and hematology.


BHOA values honesty, integrity
and respectful behavior in all our
dealings with each other, patients
and all other stakeholders.


42 years of caring


5 physicians &
4
Physician Assistants


EMR in 2004; continuous investment in IT


Pharmacy & inventory
mgmnt

systems


Practice
Mgmnt
. & analytics software


IT Infrastructure


intranet, cable modems,
DSL, hardware, supportive
perihperals


inbound / outbound
digitized
faxing


all in
-
office, lab & hospital interfaces


1990


2004: 7,800 sq. ft. & 17 chairs


2005: 32,000 sq. ft. & 37 chairs & beds



700 + Payers or plans


50% Medicare


15% HBS


15% CABC


7% non
-
risk bearing local PPO


7% MA & Uninsured


We See Everyone


P&T Committee


Coding Committee


Clinical Trials Program


In
-
House (“retail”) Pharmacy


No Hospital “
Turfing
” Option



14
FTE RNs
-

in
infusion suite



2003
-
05: from 55 FTEs to 65
FTEs



2006
-

07
TURNOVER = .05, or ½
%


2008
T/O = 1%


2009 T/O = 10%



2010 T/O = 1%



Lab


CMP, Tumor Markers,
CBCs, etc
.


DRO = 22
-

30
days


Gross revenue up
5%
-

CY09

CY10


Net revenue even


Drug costs
up 10%


Payroll ratio decreasing from10% to 8%


Most
other non
-
drug costs decreasing


No “
Brownbagging


BASIC USMC MODEL FOR LEADERSHIP


Sense of Mission


Important, Urgent


Aligned Values


Ours & Yours


No Peacetime


Caring Never
Stops


Excellence, not Perfection


Constant Learning & Training; Invest in


People


Adequately Equipped; Low & Hi
-
tech


Autonomy & Accountability

“LADIES & GENTLEMEN WORKING WITH
LADIES & GENTLEMEN”



Respect
-

Involved, Listened to


No “ Witch Hunts”:


Flexibility & Accommodation


Empowered
-

Autonomy & Discretion


Constant training, & info flow


Coupled with Accountability


Reliance & Trust
-

To do the Right Thing


Recognition & Celebrations



1. Quality
Care
-

complexity.
It is increasingly
difficult to provide guideline based care profitably:
Increasing options & variables for treatment


Prognostic/predictive factors


Oral
oncolytics

and medication management


Aging
population, Chronic
conditions


Fragmented or limited information exchange among
stakeholders


Technology


the medical science, labs, EMR, data &
information flow, infrastructure design / re
-
design


Other Quality
challenges
-
operational or physical
:



Long lead times for new patient appointments


Habitual patient rescheduling


Inadequate employee training, SPV. & support


Low levels of privacy


Dosing errors and waste


Unreasonable patient wait times


Inadequate infrastructure and other physical plant
constraints

2
. HR
: Productivity & Performance Management


Leadership
, Management &
Organization



Compliance with laws & regulations


Creating & maintaining a culture where trust, open
communication & respect are expected and
enforced


Workflow & processes designed & managed


3. Financial Management


Affordability
-

cost structure management


Figures as a % of non
-
Dr. costs


80%
-
Drugs


9%
-
non
-
Dr. (non
-
Provider) payroll


1.7%
-
Med
-
Surg



1
.6%
-
Rent


1.0%
-
Health Insurance



.9%
-
Payroll taxes


So, about 5% (monetized)of all non
-
Dr. costs are
available to budget for all other non
-
Dr.
expenses


You can not cost
-
cut your way to prosperity



3. Financial Management


cont’d


Higher administrative
(indirect)costs



Payor

requirements (pre
-
auth.
Specialists, )


Regulations


HIPAA, HITECH, Compliance,
eSecurity


Technology and staff resources required to
provide clinical decision
-
support in the
caregiving

process.




4. Revenue
Cycle Management

(THE “TOP LINE”)


Limited service line portfolio


No pay @ time of service


cash flow impact & higher admin.
costs


Failure to properly intake patients, pre
-
auth
Tx

& counsel patient


Maintain coding & documentation competencies


Complete charge capture


Complete & timely follow
-
up on claims held or rejected


Adequate & enforced A/R and collection policies


Optimal & managed fee schedule & payer contracts


4. Revenue Cycle Management (cont’d)



Payer Strategies Sophistication


Clinical guidelines & pathways constraints


Prior authorizations


Reduced or delayed
payments


Changes in plan
benefits


Multiple plans and relationships


Outsourcing
to specialty care vendors (PBM, ICORE, P4,
etc.)


5. Management & Leadership



Recognize the importance of investment in technology


Recognize the need for investment in people


skills,
competencies


Collaborate to determine & install adequate and
appropriate controls


Committed, communicative leaders who shape values


Base decisions on sound data & processes (dashboards)


Appropriate governance

6. Practice Development
(Demand Management)



Excellent patient relations skills



Excellent telephone skills



Thorough referral management program



Focused & diligent payer management program



RESOURCE
MANAGEMENT



TALENT
MANAGEMENT



DEMAND
MANAGEMENT



SUPPLIER
MANAGEMENT


Technology investment


E
nables
productive & efficient tactics such
as
eRx
, PQRI,
QOPI and regimen analysis


E
nhances
appropriate
(and possibly cost
-
effective) clinical
decision making, Clinical
Trials management, optimal
charge capture
and coding
&
EoB

analysis


E
nables
patient counseling, financial
analysis, efficient
caregiving

&
revenue
enhancement opportunities


L
ower
costs over time, improved quality,
payer
leverage, branding, patient relations
and shared data
to all stakeholders (portals)


Human Capital
Investment


E
nables
productive & efficient decision
making


E
ncourages
the pursuit of continuous
improvement in methods and processes


Enables
skill & knowledge growth


Encourages
engagement & cooperation


E
nhances
retention and a constancy of
purpose aligned with the practice’s mission



Personnel Productivity Tactics


Optimal job & process design at all levels
(“Organization”)



Adequate, appropriate & constant training



Accountability (performance mgmt)



Adequate & communicated policies &
expectations



Fair & reasonable support and reward systems;
pay, benefits, recruiting, selecting, training,
communication & engagement



Business Development
Investment


Enables brand
-
building


Supports cooperation with downstream entities
(payers and their allies): value based contracting


Becomes more critical as the rate of change
escalates


Strengthens referral sources & clinical trials
sources


Focuses on opportunities to add value to the
caregiving

continuum and aligns everyone with
the practice’s mission


Difficult for competitors to replicate


Upstream
Entity
I
nvestment


Builds credibility


Encourages cooperation for various
initiatives


Identifies & strengthens business relationships


Offers opportunities to add value, reduce
costs, obtain business
intel

and favorable
terms & conditions on products and services


The firm will successfully compete for employees & patients


The firm will have more satisfied, productive, loyal employees


“Better” productivity metrics


ESPIRIT de CORPS


A “virtuous cycle” of gains upon gains


Sets the stage for better care giving (mission critical)


Optimizes the practice’s intellectual capital


this is the sum &
synergy of your knowledge, experience, relationships,
processes, market presence and community influence



Sound Strategic Management is Critical for

Continued Success.


Know and Understand Your People, Numbers
&

Your
Processes.


Applied

Knowledge is Power
-

Use what you learn,
and always be learning


Understand Both the Economics for Your Business
And

for the Human Factors


Take Responsibility for Your Business & Yourself




Physician


owner compensation will continue to
experience downward pressure.



Productivity & efficiency improvements are possible.



Employees will be the source of such improvements.



Managers & leaders will be integral to the business’
success as clinical & technological demands on
providers increase.



If you keep doing what you’re doing, you’ll keep
getting what you have (or even less).