Let Us Count The Ways To Cut Costs and Boost Income PDF Print E-mail
Question: Over the past few years, though I continue to see approximately the same number of patients, my bottom-line income continues to decrease. My office manager has worked very hard to trim all the fat from our expenses; however, costs continue to rise and revenues are stagnant or dropping slightly. Do you have any suggestions?

Answer:You are not alone in your frustration with rising costs and dropping income. Competition for qualified staff and increased costs of staff benefits have cut into practice profits. Technology represents significant costs that didn't exist for most practices five years ago. These, as well as the rising cost of general practice overhead, continue to chip away at your income.

Sometimes it takes a fresh set of eyes to see opportunities to increase the bottom line. We regularly see a concentration on the expense side of the income statement, with little attention to the revenue side. Chances are, there is money being left on the table, or there are inefficiencies that are costing the practice money.

For example, do you know what the average production is for a physician in your specialty in your area of the country? Do you know if you are under or over that number?

If your production is higher or lower than average, do you know whether the difference is attributable to the number of patients you see per day, the fee schedule you are using, the documentation on the patient's charts or how your office is billing for your services?

In most cases, we find the physician and the office manager don't know the answer to those questions and don't know how to find out.

We often ask a practice what the average co-pay collection rate is for that group's office. The reply is usually around 100%. However, upon further investigation we find that the actual collection rate at the time of service could be as little as 75%. Billing for the co-pay after the time of service can cost the practice nearly as much as the co-pay itself.

What would be the effect on the bottom line if your collection rate increased by 1%? If your production is $400,000, the increase is $4,000.

What would it cost to increase your collection rate? If hiring a part-time person at $15,000 per year would increase your collections 10%, you would realize a net increase of $25,000, less the cost of benefits of adding that person. How many practices would consider hiring another staff person to increase the bottom line?

Are you coding your services at the correct level? If you are undercoding your services, or not billing for all your services as allowed by your carriers, you could be leaving significant dollars on the table.

For example, if you are coding your services at a level one, you are most likely undercoding whatever service you are providing. If the reimbursement difference for a level one and level two is $15, and your average collection rate is 70%, and you perform 150 level one services each year, you lost $1,575. Not a large number, but multiply that situation by 10 other similar situations and the number becomes more significant.

Coding issues can be serious, and every practice should have a medical chart review. Finding undercoding or missed billing opportunities is a bonus. Improper documentation or overcoding could cost the practice thousands of dollars. Don't assume that because your billers and office manager have been with your practice for a long time, your billing is being done correctly.

What would be the effect of your seeing one more patient per day without adding to the length of your day? Could you streamline the way you process patients through the office?

If the average collection per patient is $45, and you see one more patient per 225 days, you would realize $10,125. Would your overhead increase by the same amount to add that patient? Probably not.

Even when focusing on the revenue side of your practice, you don't want to ignore the cost side. However, focusing on the small dollars will not produce the impact that you would like. The most expensive cost in your office is personnel.

Could you eliminate all or part of the cost of one employee? If one marginal person is replaced with a "star," could that person assume some of the responsibilities of another staff person?

We find that offices tend to hire "cheap" to cut costs. If you could eliminate a $10-per-hour person and spread around $6 per hour to other positions to hire better talent, you would save $4 per hour, or $8,320 per year, plus benefits.

Hiring a professional, whether it is your personal accountant or an outside consultant, could be the best money your practice spends. Most likely the cost of the consulting can be recovered by the results of the recommendations. However, don't hire that person only to identify the problem, but also to implement the solution to that problem.

Too often we find practices spend the money to have a consultant identify the problem or an opportunity, and action is never taken. That money was wasted. The solution must be implemented and monitored to achieve the desired result.

Written by: Rita M. Schwager
Let Us Count The Ways To Cut Costs and Boost Income PDF Print E-mail
Question: Over the past few years, though I continue to see approximately the same number of patients, my bottom-line income continues to decrease. My office manager has worked very hard to trim all the fat from our expenses; however, costs continue to rise and revenues are stagnant or dropping slightly. Do you have any suggestions?

Answer:You are not alone in your frustration with rising costs and dropping income. Competition for qualified staff and increased costs of staff benefits have cut into practice profits. Technology represents significant costs that didn't exist for most practices five years ago. These, as well as the rising cost of general practice overhead, continue to chip away at your income.

Sometimes it takes a fresh set of eyes to see opportunities to increase the bottom line. We regularly see a concentration on the expense side of the income statement, with little attention to the revenue side. Chances are, there is money being left on the table, or there are inefficiencies that are costing the practice money.

For example, do you know what the average production is for a physician in your specialty in your area of the country? Do you know if you are under or over that number?

If your production is higher or lower than average, do you know whether the difference is attributable to the number of patients you see per day, the fee schedule you are using, the documentation on the patient's charts or how your office is billing for your services?

In most cases, we find the physician and the office manager don't know the answer to those questions and don't know how to find out.

We often ask a practice what the average co-pay collection rate is for that group's office. The reply is usually around 100%. However, upon further investigation we find that the actual collection rate at the time of service could be as little as 75%. Billing for the co-pay after the time of service can cost the practice nearly as much as the co-pay itself.

What would be the effect on the bottom line if your collection rate increased by 1%? If your production is $400,000, the increase is $4,000.

What would it cost to increase your collection rate? If hiring a part-time person at $15,000 per year would increase your collections 10%, you would realize a net increase of $25,000, less the cost of benefits of adding that person. How many practices would consider hiring another staff person to increase the bottom line?

Are you coding your services at the correct level? If you are undercoding your services, or not billing for all your services as allowed by your carriers, you could be leaving significant dollars on the table.

For example, if you are coding your services at a level one, you are most likely undercoding whatever service you are providing. If the reimbursement difference for a level one and level two is $15, and your average collection rate is 70%, and you perform 150 level one services each year, you lost $1,575. Not a large number, but multiply that situation by 10 other similar situations and the number becomes more significant.

Coding issues can be serious, and every practice should have a medical chart review. Finding undercoding or missed billing opportunities is a bonus. Improper documentation or overcoding could cost the practice thousands of dollars. Don't assume that because your billers and office manager have been with your practice for a long time, your billing is being done correctly.

What would be the effect of your seeing one more patient per day without adding to the length of your day? Could you streamline the way you process patients through the office?

If the average collection per patient is $45, and you see one more patient per 225 days, you would realize $10,125. Would your overhead increase by the same amount to add that patient? Probably not.

Even when focusing on the revenue side of your practice, you don't want to ignore the cost side. However, focusing on the small dollars will not produce the impact that you would like. The most expensive cost in your office is personnel.

Could you eliminate all or part of the cost of one employee? If one marginal person is replaced with a "star," could that person assume some of the responsibilities of another staff person?

We find that offices tend to hire "cheap" to cut costs. If you could eliminate a $10-per-hour person and spread around $6 per hour to other positions to hire better talent, you would save $4 per hour, or $8,320 per year, plus benefits.

Hiring a professional, whether it is your personal accountant or an outside consultant, could be the best money your practice spends. Most likely the cost of the consulting can be recovered by the results of the recommendations. However, don't hire that person only to identify the problem, but also to implement the solution to that problem.

Too often we find practices spend the money to have a consultant identify the problem or an opportunity, and action is never taken. That money was wasted. The solution must be implemented and monitored to achieve the desired result.

Written by: Rita M. Schwager
Removing Obstacles to the Paperless Office PDF Print E-mail
Many doctors dream of a "paperless office." No paper equals no paperwork, right? The day will flow with interesting and satisfying patient clinical encounters without the hassle and aggravation of finding and reviewing mounds of medical records for each patient. Missing charts and misplaced labs will no longer exist.

In the past, the percentage of revenue invested for information technology in the health care industry has been significantly less than other major industries, such as financial services. With health care being an information intensive endeavor, the complexity of the information needs, and the reluctance of some physicians in health care to adapt effectively to applications have severely crippled the progress which has been made in medical computing.

There are a variety of physicians practice management software applications that were designed prior to managed care with subsequent "add-on" modules of software to handle the complexities of prepayment systems such as capitation. Now these same practice management systems are adding on medical record modules.

Sometimes in implementing new systems, the processes have not been analyzed so the information system is designed to replicate and record the paper process. This can lead to maintaining complicated and expensive paper processes now completed on the computer.

The use of electronic medical records has been slowly growing but is not expanding as quickly as many expected. There are several potential reasons for this:

It IS Not the Way We Do It

The paper chart is very comfortable for clinicians. Although there are difficulties in finding charts periodically (up to 30 percent of the time according to some studies) and finding information in the chart sometimes proves challenging, the thick chart has a strange allure to physicians. Having the information available in a "hard copy" is appealing. Some physicians, who have had little exposure to electronic medical records or computers, find that the transition from paper to electronic can be emotionally traumatic.

I Don't Know Where to Start

Since the government and many insurers have begun penalizing physicians with delayed payments if they do not have electronic billing capabilities, there is a compelling pressure for electronic billing. Even with many options available for electronic medical records, the physicians appear paralyzed and inert when considering electronic medical records. Implementing an EMR system seems like an insurmountable project. Many times the physician support staff takes care of the other information systems for routine maintenance, problem solving and structuring. For electronic medical records, more physician involvement is expected.

It Is Too Expensive

At a recent family practice conference workshop on medical informatics, the physician presenter actually apologized for the monthly cost of Internet access at $19.95. A participant noted that Internet access could be obtained for $13.95 per month and if used in the course of business, would be tax deductible. Equally with electronic medical records, the system cost can be an issue for physicians. Cost-effective options are available (such as options less than $500 for base software) and many are additional modules to the practice management system in the physician's office. Additional costs may arise from voice recognition and fancy additional components. Unexpected costs are another concern. Even with a system priced moderately at $2,000 per physician, the additional hardware such as printers, computers, scanners etc. can quickly out-distance the moderate cost for the software itself. The software maintenance costs can also seem uncontrolled by physicians who prefer managing costs tightly. Quantifying the Return on Investment (ROI) has been of high interest to many parties, particularly the health information vendors but has been universally difficult.

It's Unreliable

Every clinician fears the nightmare of having a computer with a patient's medical record totally crash and lock the information outside of the clinician's access. Certainly, computers (like people) are susceptible to breakdowns periodically, though major portions of our society rely on computers for very critical functions. There are methods of getting around reliability issues through mirroring computers and doing fastidious backups of the data.

Confidentiality is Compromised

In the last several years we have all lost a significant amount of our privacy. The concern about keeping medical records confidential is highly significant in a large integrated delivery system whether the record is paper or electronic. Concerns about confidentiality are a significant issue needing to be addressed in any electronic medical record plan.

The Whole World is Not Doing It

Somehow, it seems everyone is waiting for everyone else to implement electronic medical records and then they will try them. The electronic medical records industry has had some growing pains and has advertised awesome capabilities but failed to have them fully developed. A growing cynicism has occurred about information technology capabilities.

The Information Systems Cannot Talk

Integration of information systems is another problem but mostly affects large systems. Stand-alone systems are less of a problem in a small or solo practice. Internal integration where the demographic updates in the billing system may be shared with the electronic medical record it is important to avoid duplication of data entry.

It Decreases Productivity

There is little debate that the implementation of a new system will temporarily slow processes. In a private practice where losing time means wasting money, it is imperative to get the practice back to full efficiency as soon as possible. The goal of the electronic medical record is to improve efficiency. Practices with systems implemented several years ago are now showing the improvement of the work processes.

Support for the Network Issues Is Difficult This issue is the same with billing systems, but if the model of electronic medical record implementation is one with full client/server, there will be additional network issues. If the practice has several sites, this requires more planning and money.

How do we get the information into the computer? The physician interface has many options, including hand-held devices, a mouse, a menu-driven screen format, touch screen or transcription. Transcription of dictation seems to be the easiest answer to the concern of losing patient rapport in the examination room. The transcription can develop provider-specific templates that can allow information to be dictated to complete the template. Allowing the flexibility for the provider's choice in documentation style may lead to more acceptance of the technology.

However, We Would Need to Change The change factor is a very significant one since we naturally tend to resist change. A well-designed implementation of an electronic medical record system involves reviewing current processes and modifying them if they do not make sense.

I Will Wait for Voice Recognition An alluring promise of just talking and having written words appear on a page can delay many physicians. The cost is high and the technology marginal. The training for voice recognition systems can be a test of patience. Some physicians seem pleased, but voice recognition is not yet the mainstream.

Nevertheless, there does appear to be light at the end of the tunnel. The vendors appear to have recognized the need to design more simplified applications that have considerable flexibility in how the physician can interact with the technology. Keeping it simple and affordable should be a mantra for software vendors at this stage of the technology development.

Of particular interest are the wireless devices that can go to the patient's bedside in the physician's pocket. These personal digital assistants (PDAs) can allow for accurate data capture in a less bulky way than a personal computer. Physicians are expressing an interest in these devices possibly because they seem less intimidating and easier to learn and use. In addition to the physician schedule and contacts list, these devices can capture charges, act as a reference resource in medication dosage and interactions, draft e-mail and generally improve the physician's efficiency. The possibility of decreasing medication errors using electronic prescribing drives physicians and administrators toward these technologies. Reportedly, many residency programs are purchasing PDAs and providing them to all their physicians in training. These physicians will likely find acceptance of using technology easier.

The physician's ideal interface would be a voice recognition system that would not be overly burdensome to train. Again, physicians express interest in the advancements in this technology and seem interested in integrating its use as soon as voice recognition is ready. Most physicians seem to agree that the technology is not practically useable today.

The use of an Application Service Provider (ASP) for practice management functions and electronic medical records can also address many of the physicians' cost and support issues. With an ASP, the physician can subscribe to an Internet-based application and only pay a monthly amount. The chief advantages are lower capital costs, strong support in a "turn-key" fashion and a much more rapid implementation time. One of the primary concerns about such a model is the transition or ownership of the data at the end of the term of the contract. Nevertheless, the potential to ease the physician's start-up costs and frustration can be improved through an ASP model.

Hopefully, within the next five years electronic medical record systems that can be unified in inpatient and outpatient information should be in wider use. The future vision is seamless communication, probably over the Internet, so physicians could send information to other physicians and the patient's critical medical information could be available to an authorized user at any point-of-service. We see a slowness to development of truly integrated information systems or even access, except within health systems.

Privacy and system security are major issues and deserve immediate attention. The modern society appears to have accepted the "invasion of privacy" necessary for some level of technology. The example is our acceptance of Internet white pages, mega databases, Internet resume posting, and worldwide access to a map to our home based on a mouse click. A common thought is, "You have no privacy, so get used to it." However, the potential misuse of health information at an individual level is a more serious concern. Others counter the loss of privacy with the potential harm of a physician treating with incomplete information in emergency or even non-emergency cases because we have overprotected the information. Which is worse?

Nevertheless, the future is bright. We will get there—or at least significantly closer than we are now!

Written by Diane Lares

Removing Obstacles to the Paperless Office PDF Print E-mail
Many doctors dream of a "paperless office." No paper equals no paperwork, right? The day will flow with interesting and satisfying patient clinical encounters without the hassle and aggravation of finding and reviewing mounds of medical records for each patient. Missing charts and misplaced labs will no longer exist.

In the past, the percentage of revenue invested for information technology in the health care industry has been significantly less than other major industries, such as financial services. With health care being an information intensive endeavor, the complexity of the information needs, and the reluctance of some physicians in health care to adapt effectively to applications have severely crippled the progress which has been made in medical computing.

There are a variety of physicians practice management software applications that were designed prior to managed care with subsequent "add-on" modules of software to handle the complexities of prepayment systems such as capitation. Now these same practice management systems are adding on medical record modules.

Sometimes in implementing new systems, the processes have not been analyzed so the information system is designed to replicate and record the paper process. This can lead to maintaining complicated and expensive paper processes now completed on the computer.

The use of electronic medical records has been slowly growing but is not expanding as quickly as many expected. There are several potential reasons for this:

It IS Not the Way We Do It

The paper chart is very comfortable for clinicians. Although there are difficulties in finding charts periodically (up to 30 percent of the time according to some studies) and finding information in the chart sometimes proves challenging, the thick chart has a strange allure to physicians. Having the information available in a "hard copy" is appealing. Some physicians, who have had little exposure to electronic medical records or computers, find that the transition from paper to electronic can be emotionally traumatic.

I Don't Know Where to Start

Since the government and many insurers have begun penalizing physicians with delayed payments if they do not have electronic billing capabilities, there is a compelling pressure for electronic billing. Even with many options available for electronic medical records, the physicians appear paralyzed and inert when considering electronic medical records. Implementing an EMR system seems like an insurmountable project. Many times the physician support staff takes care of the other information systems for routine maintenance, problem solving and structuring. For electronic medical records, more physician involvement is expected.

It Is Too Expensive

At a recent family practice conference workshop on medical informatics, the physician presenter actually apologized for the monthly cost of Internet access at $19.95. A participant noted that Internet access could be obtained for $13.95 per month and if used in the course of business, would be tax deductible. Equally with electronic medical records, the system cost can be an issue for physicians. Cost-effective options are available (such as options less than $500 for base software) and many are additional modules to the practice management system in the physician's office. Additional costs may arise from voice recognition and fancy additional components. Unexpected costs are another concern. Even with a system priced moderately at $2,000 per physician, the additional hardware such as printers, computers, scanners etc. can quickly out-distance the moderate cost for the software itself. The software maintenance costs can also seem uncontrolled by physicians who prefer managing costs tightly. Quantifying the Return on Investment (ROI) has been of high interest to many parties, particularly the health information vendors but has been universally difficult.

It's Unreliable

Every clinician fears the nightmare of having a computer with a patient's medical record totally crash and lock the information outside of the clinician's access. Certainly, computers (like people) are susceptible to breakdowns periodically, though major portions of our society rely on computers for very critical functions. There are methods of getting around reliability issues through mirroring computers and doing fastidious backups of the data.

Confidentiality is Compromised

In the last several years we have all lost a significant amount of our privacy. The concern about keeping medical records confidential is highly significant in a large integrated delivery system whether the record is paper or electronic. Concerns about confidentiality are a significant issue needing to be addressed in any electronic medical record plan.

The Whole World is Not Doing It

Somehow, it seems everyone is waiting for everyone else to implement electronic medical records and then they will try them. The electronic medical records industry has had some growing pains and has advertised awesome capabilities but failed to have them fully developed. A growing cynicism has occurred about information technology capabilities.

The Information Systems Cannot Talk

Integration of information systems is another problem but mostly affects large systems. Stand-alone systems are less of a problem in a small or solo practice. Internal integration where the demographic updates in the billing system may be shared with the electronic medical record it is important to avoid duplication of data entry.

It Decreases Productivity

There is little debate that the implementation of a new system will temporarily slow processes. In a private practice where losing time means wasting money, it is imperative to get the practice back to full efficiency as soon as possible. The goal of the electronic medical record is to improve efficiency. Practices with systems implemented several years ago are now showing the improvement of the work processes.

Support for the Network Issues Is Difficult This issue is the same with billing systems, but if the model of electronic medical record implementation is one with full client/server, there will be additional network issues. If the practice has several sites, this requires more planning and money.

How do we get the information into the computer? The physician interface has many options, including hand-held devices, a mouse, a menu-driven screen format, touch screen or transcription. Transcription of dictation seems to be the easiest answer to the concern of losing patient rapport in the examination room. The transcription can develop provider-specific templates that can allow information to be dictated to complete the template. Allowing the flexibility for the provider's choice in documentation style may lead to more acceptance of the technology.

However, We Would Need to Change The change factor is a very significant one since we naturally tend to resist change. A well-designed implementation of an electronic medical record system involves reviewing current processes and modifying them if they do not make sense.

I Will Wait for Voice Recognition An alluring promise of just talking and having written words appear on a page can delay many physicians. The cost is high and the technology marginal. The training for voice recognition systems can be a test of patience. Some physicians seem pleased, but voice recognition is not yet the mainstream.

Nevertheless, there does appear to be light at the end of the tunnel. The vendors appear to have recognized the need to design more simplified applications that have considerable flexibility in how the physician can interact with the technology. Keeping it simple and affordable should be a mantra for software vendors at this stage of the technology development.

Of particular interest are the wireless devices that can go to the patient's bedside in the physician's pocket. These personal digital assistants (PDAs) can allow for accurate data capture in a less bulky way than a personal computer. Physicians are expressing an interest in these devices possibly because they seem less intimidating and easier to learn and use. In addition to the physician schedule and contacts list, these devices can capture charges, act as a reference resource in medication dosage and interactions, draft e-mail and generally improve the physician's efficiency. The possibility of decreasing medication errors using electronic prescribing drives physicians and administrators toward these technologies. Reportedly, many residency programs are purchasing PDAs and providing them to all their physicians in training. These physicians will likely find acceptance of using technology easier.

The physician's ideal interface would be a voice recognition system that would not be overly burdensome to train. Again, physicians express interest in the advancements in this technology and seem interested in integrating its use as soon as voice recognition is ready. Most physicians seem to agree that the technology is not practically useable today.

The use of an Application Service Provider (ASP) for practice management functions and electronic medical records can also address many of the physicians' cost and support issues. With an ASP, the physician can subscribe to an Internet-based application and only pay a monthly amount. The chief advantages are lower capital costs, strong support in a "turn-key" fashion and a much more rapid implementation time. One of the primary concerns about such a model is the transition or ownership of the data at the end of the term of the contract. Nevertheless, the potential to ease the physician's start-up costs and frustration can be improved through an ASP model.

Hopefully, within the next five years electronic medical record systems that can be unified in inpatient and outpatient information should be in wider use. The future vision is seamless communication, probably over the Internet, so physicians could send information to other physicians and the patient's critical medical information could be available to an authorized user at any point-of-service. We see a slowness to development of truly integrated information systems or even access, except within health systems.

Privacy and system security are major issues and deserve immediate attention. The modern society appears to have accepted the "invasion of privacy" necessary for some level of technology. The example is our acceptance of Internet white pages, mega databases, Internet resume posting, and worldwide access to a map to our home based on a mouse click. A common thought is, "You have no privacy, so get used to it." However, the potential misuse of health information at an individual level is a more serious concern. Others counter the loss of privacy with the potential harm of a physician treating with incomplete information in emergency or even non-emergency cases because we have overprotected the information. Which is worse?

Nevertheless, the future is bright. We will get there—or at least significantly closer than we are now!

Written by Diane Lares

Going Solo: Making the Leap PDF Print E-mail
Twelve months ago, I did what some physicians might describe as the unthinkable: I left the security of a salaried position and entered the wild world of solo practice. I walked away from an established office that had given me generous paychecks with benefits for seven years. It had staff members to take care of everything from payroll to billing to greeting patients, making it generally easy for me to come in and just be a family doctor.

Now, I do all of that work myself. My practice is literally solo (I have no staff), so I get to sweat the small stuff: submit claims, answer the phone, check in patients, turn over the room, give shots and review EOBs. (If you're wondering what an EOB is, you're just as far out of the loop as I was before I made the jump.)

Why did I do it? Why did I leave the security of employed practice, simultaneously taking on all of the office activities I knew nothing about and had thankfully avoided for the past seven years? Put simply, the current reality of practice had become untenable and the trajectory looked no better. What finally tipped the scales was getting a taste for how good practice could be ­ and figuring out that the transition was a lot simpler than I had imagined.

The sad reality

Not long after I finished residency, I began to realize that medical practice wasn't the bundle of unfettered joy for which I had yearned. Yes, the pay was much better and the call more sane, but I began to be embarrassed by the monotonous frequency with which I started patient encounters with, "Sorry I've kept you waiting." I was chagrined when my open-ended question, "What can I do for you today?" was met with, "I was sick last week but thought I might as well come in today since it's so hard to get an appointment."

The issues that arose during my employed phase were hardly unique to my organization. Across the country, health care systems were creating new practices and purchasing old ones, and private practices were banding together in local networks to become larger systems. To manage these practices, the health care systems created administrative arms, which wasted no time in developing numerous policies and procedures. They purchased billing systems to maximize their returns on physician work and began to hire or rent billing experts, JCAHO experts and CLIA experts. Expensive T1 lines were installed to pipe information between the practices and the central billing office, and couriers were hired and supplied with vans to move materials and meeting minutes (of course, meetings were established to discuss all of the new policies and procedures).

On top of all of this added expense and bureaucracy, the money wasn't as good as it used to be. The insurers were working to restrain premium increases and did all they could to pay us less. In turn, we were called upon to increase revenue via increased throughput (i.e., "see more patients"). Then, we were asked to increase scheduled time with patients. Then, our compensation plan changed from a salary guarantee to a percent of revenue (i.e., "you eat what you kill"). And then we got back to another round of "see more patients." It seemed that all of the conversations in our office were about money. The only measure of success was "revenue." A good doctor, it seemed, was one with high visit volume.

Of course, this pure pursuit of revenue eventually cuts into the time we need to build trusting relationships with our patients. In turn, we lose the joy in our work and can begin to feel that we are no longer making meaningful contributions to our patients' lives but are merely going through the motions to receive our paycheck.

The fear of ending up this way was probably the most important factor motivating me to make a change. While the finances and the absurdity of current practice operations were maddening, I could put up with the stench if I felt I was able to deliver excellent, personal care. But I came to understand that this is not possible in the way we have configured our current offices. Our system is so broken that we must completely redesign it if we are to achieve the results we desire. (For more information, see the Institute of Medicine reports in the reading list.)

In the summer of 1998, I heard Don Berwick, MD, MPH, president and CEO of the Institute for Healthcare Improvement, describe the practice of the future and an IHI initiative called the Idealized Design of Clinical Office Practice (IDCOP). (For more information, see the reading list.) Berwick made the obvious but necessary point that health care is all about the interaction with the patient and that fundamental redesign would be the means to this end.

Accepting a part-time administrative position under Robert Panzer, MD, chief quality officer at Strong Health, I had the opportunity to participate in the IDCOP project and learn new ways of delivering care, such as offering same-day appointments regardless of urgency, using continuous flow processing so that I could see all patients on time and using 21st century technology to achieve breakthroughs in all aspects of practice.

This is where I was in October of 2000: intolerable current reality that only promised to get worse with time versus a compelling vision for the practice of the future. Paul Plsek, a guru of change management (www.directedcreativity.com), teaches that the willingness to make a change is based on the balance between the pain of the current situation and the pain of making the change. Finally, I had reached the tipping point. I was ready to do anything to move toward that vision.

Opening an office ­ the wrong way

One final stumbling block remained in my way on the road to solo practice. I feared the unknown ­ that is, the difficulty and expense of opening an office myself. Was it really as hard as I imagined it to be?

For no discernible reason, I had the impression that I would need a loan of $125,000 to open a new practice. With my current practice mode in mind, I built a mountain of expectations and expenses. I would need someone to manage the clerical work: incoming phone calls, mail, faxes, supplies, co-pays, referrals, etc. I would need clinical support staff to room patients, take vitals, give shots, assist during procedures, etc.

My space requirements would need to accommodate the three exam rooms I used when at peak efficiency, a front office, a nursing area, a waiting room, bathrooms, a break room, a storeroom, etc. Then, of course, I would need all of the equipment.

Next, I began to look at office spaces to get a feel for the square-footage costs ($16 to $25). With the room needs I had stipulated above, I thought I could combine some of the spaces and perhaps get away with 1,100 square feet, which would require renovation of an existing space. In the end, I was looking at spending $60,000 before I spent a dime on office furniture.

I then began researching salary and benefit costs for nurses and secretaries. I called billing software vendors to begin reviewing their products and was pleased to find that one highly respected local billing outfit had developed a linked electronic record. But for just the billing component and a few computers, I was looking at $40,000 up front, then a percent of revenue to pay for ongoing services.

Then, I priced an answering service, cell phones, pagers, telephone systems and business and malpractice insurance. I looked into accounting firms and practice marketing strategies (newspaper advertisements, mailings, etc.).

By this time I had arrived at the inescapable conclusion: I would have to be independently wealthy to open a new office. How did anyone ever go into private practice? No wonder the private docs sold their practices in droves when the hospitals and health care systems came knocking.

What happens when you challenge assumptions

Just as I was about to put my hopes for a new practice into the hands of Lotto, I decided to question all of my assumptions. What was I trying to achieve? I did not want to recreate a mini version of my current practice. I wanted something better, a practice where I had time to interact meaningfully with patients, explore shared decision making, listen to patient stories and address all of the issues that arise during visits. I wanted an office where prescription refill requests, messages and forms were all so easy to fulfill that last-minute requests could be met with the honest answer, "Sure, no problem, I can do that right now." I wanted a practice with superior data collection capabilities to prove superb outcomes in patient care. I wanted a better balance between work and home and didn't want to spend so much time doing paperwork. In short, I wanted the ideal practice, for both my patients and myself.

To create this, I had to focus on what was essential. Health care is at its core a very local, personal process. When we function at our peak, we are available to patients when they need us. We treat each patient interaction as if it is the only one. We translate our understanding of the latest medical knowledge to the individual. If this is what health care is really all about ­ not "number of exam rooms," "productivity" and "staffing ratios" ­ we can strip away all of the assumptions built into current practice.

Suddenly, opening my practice became so much simpler. I had only three objectives:

1. Eliminate barriers between the patient and the doctor. I would make my phone numbers and e-mail address widely accessible, and I would create a practice Web site to answer simple questions about my practice. For appointments, I would use open-access scheduling and would always be able to offer appointments "today" regardless of urgency (for more information, see the reading list). As the IDCOP project has shown, when we reduce barriers to access, our patients gain trust in our ability to provide timely care and they demand fewer visits. This creates room in our schedules for more robust visits and allows us to manage a larger population of patients, if we choose to do so.

To handle after-hours call, I would follow the advice I had heard time and time again from those in solo practice: Taking your own call is less onerous than sharing call with others. Your own patients will be more respectful of your time, and talking only to "your own" is much easier than trying to create an effective care plan with an unknown patient.

2. Make time for meaningful interaction. Meaningful interaction is the foundation of excellent health care, but in many practices, physicians can't afford to spend the time it takes to create these interactions. How could I? I entertained a radical thought: If I were the only staff member in my office, I could dramatically reduce my overhead costs, meaning I could dramatically reduce the number of patients I had to see per day in order to be profitable. This would give me the time I required to create meaningful interactions with my patients.

To do this, I would rent an exam room (it would double as my office) from an existing practice. I would answer the phone, make appointments, greet patients and provide all of the care. I would be fully in the loop of all that happens between my office and my patients. They would be asked only once, "What can we (I) do for you today?" They would get to spend nearly 100 percent of their visit time with me, their doctor (as opposed to 20 to 40 percent in most offices). And above all, I would have time to ask open-ended questions, allow patients to speak uninterrupted and listen to patient stories; time to create the kind of rewarding interaction that is so totally lacking in the mills we have established in the name of increased productivity.

3. Invest in technology that puts scientific and patient information at the physician's fingertips. Without this information, a practice cannot attain what IHI calls "reliability," meaning the ability to deliver all and only the care known to be effective. The Institute of Medicine has thoroughly and convincingly described in its recent reports the gap between what we currently do and what science recommends. But bridging that gap is impossible on our own. It is foolish to expect a person to be infallible and make all of the correct recommendations for all of the people all of the time. Therefore, we must look to inhuman help: computerized systems that remind us of the latest clinical recommendations and that help us keep track of all the elements involved in an individual patient's care. With the help of Keith MacDonald and Jane Metzger from First Consulting Group in Boston, I found an incredibly affordable integrated scheduling, billing, messaging, electronic medical record, patient flow system (see www.alteer.com).

The doors open

By challenging every assumption, I was able to build a Norman Rockwell practice with a 21st century information technology backbone with an investment of just $15,000. My new practice opened on Feb. 26, 2001, and is thriving one year later. My patients are well cared for and highly satisfied, my income is booming (when my practice reaches full volume/panel size, my income will actually be better than what I made in my previous practice), and my wife and kids enjoy seeing more of me. I would never go back


Written by: Gordon Moore, MD
Dr. Moore is a family physician practicing in the Rochester, N.Y., area. He also serves on the faculty of the Institute for Healthcare Improvement.

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