Benchmarking the Urology Practicedownloads.hindawi.com/journals/au/2008/729204.pdf · bad habits,...

Hindawi Publishing CorporationAdvances in UrologyVolume 2008, Article ID 729204, 3 pagesdoi:10.1155/2008/729204

Review ArticleBenchmarking the Urology Practice

Paul A. Brower

Orange County Urology Associates Inc., 25200 La Paz Road, Suite 200, Laguna Hills, CA 92653, USA

Correspondence should be addressed to Paul A. Brower, [email protected]

Received 16 June 2008; Accepted 29 October 2008

Recommended by Christopher Gonzalez

The medical practice today is relentlessly challenged by medical progress, by rising costs, and by the mounting pressures of themanaged care environment. It should be the approach of every medical practice manager and practitioner to seek out and measureup to the best standards so as to optimize patient care and business outcomes. This requires the resolute pursuit of good models,brought about by the fostering of key collaborative relationships that are both practical and strategic. Integral to this processis benchmarking: the way by which information is obtained from both internal and external sources to determine and set thestandards for performance. Benchmarking is an invaluable strategic tool.

Copyright © 2008 Paul A. Brower. This is an open access article distributed under the Creative Commons Attribution License,which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

1. INTRODUCTION

The AUA Practice Management Committee sees the broadapplicability of benchmarking for the practicing urologistand can conceivably become a clearing house for factualcollaboration. Yet, there is no movement in the widerurology community to connect practices toward this effort.To promote involvement, a solution is needed that will helpsell the efficacy of benchmarking as a strategic tool fordriving growth and improvement. The difficulty, however,is physician buy-in. It is within the nature of the averagepractitioner to stay focused primarily on patient encountersand to remain preoccupied within the practice. There is also anatural reluctance to share information. Confidentiality andlegal issues are usually of great concern and can hamper opendialogue.

While agreements can be drafted to establish parametersand the usefulness of comparing practices is commonlyevident, what remains at the heart of the problem is theperception that this is a labor-intensive exercise and analtogether complicated and expensive process.

2. MATERIALS AND METHODS

Orange County Urology Associates (OCUA) is a nine-physician, single-specialty group located in South OrangeCounty California that began gathering benchmark data

four years ago. OCUA was formed after a merger oftwo preexisting groups approximately four years ago. Webegan gathering internal benchmarking data as a means ofmeasuring the success of the merger. We quickly realized thevalue of the multiple benchmarks that we began to track,and have gradually increased the number of variables thatwe examine. Our ongoing objective is to understand ourcapabilities for maximizing profit while dealing with qualitycare and time management issues. Thus, our approach isnot to look at things in a broad or general way but to seekout a careful explanation for each indicator, so as to gainknowledge and provide for actionable results. This requiresa process that expands incrementally, one step at a time.

There are two forms of benchmarking: internal andexternal, with the former always the necessary first step. Theprocess of benchmarking must begin with a baseline examof the internal data points of the practice: cost and revenueindicators as well as for productivity and staffing. This isthe beginning point of reference against which things canbe measured and compared and brought to focus. OCUAtracks patient encounter data. We look at every physician,comparing each to their own historical data and to oneanother. We also benchmark group performance and trackit on a semiannual basis for a comparison to previous years.The collection and organization of encounter data give usknowledge about the competing demands for quality patientcare, resources, and accountability. Patient mix, patterns of

2 Advances in Urology

coding, and a myriad of encounter complexities specificallyrelated to physician performance are measured in addition tocapitation reporting and claims submission.

3. RESULTS

Data for new and return patients is analyzed on a per-physician basis to monitor current procedural terminology(CPT) coding practices in order to determine the accuracy inmatching services to the correct code. By creating a matrixwith the number of encounters by CPT code for both newand return visits, it becomes immediately apparent if onephysician’s coding pattern deviates from the others in thegroup. During this review, we have found both overcodingand undercoding through the random selection of chartsfor individual physicians. These particular charts are thenreviewed by a collective group and analysis is undertakencomparing the chart documentation to the billing slip. Inthe vast majority of cases, the consensus is that the codingand billing were accurate. Sometimes, a small addition to thedocumentation would have allowed a higher service code,and on a few occasions, it was felt that the level of servicewas not justified. Inaccurate documentation can mean heavylegal and financial consequences for the practice, so it hasbeen important to know how and why individual physiciansare using inaccurate codes. We find that most of these errorsoccur because of either a misunderstanding of the guidelines,bad habits, or as a result of the difficulty in correlating CPTcodes with clinical service. We have used this review as anaudit tool and learning experience.

The inoffice procedure is the economic kicker for thepractice. It drives income. We look at all procedures donein the office, noting the ratio of procedures per new andreturn patient. Once again, the comparisons are made on anindividual and group basis, and we find that physicians withsubspecialty interest, such as incontinence, will generallyhave higher numbers for procedures, and thus, highercollections.

Hospital activities are tracked separately. To insure thateveryone carries an equal burden, each physician is reviewedfor the work done in hospital consultations and followupvisits. The number of inhospital surgical procedures istracked per physician, with regard to new and return patientwork, including the number of long cases by CPT that takethe physician out of the office for a half day. Hospital workis valuable to the group practice, but, in comparison to officework, compensation for assisting in the hospital is so poorper unit of time spent that we pay assisting physicians twothirds of the amount collected by the primary surgeon. Towrestle with this problem, we set aside a pool of money tocompensate the primary surgeon and to promote collegialcooperation for work that would not, otherwise, be equitableto the individual.

Billing charges are also tracked on an individual andgroup basis, but though they hold some comparative valuefor what physicians do, the charges are variable from yearto year and by payer class. They are reviewed more inrelation to what really matters, which is dollars, collected.Another way to measure physician activity is through the

use of relative value units (RVUs), because, based on timeand activity formulas, they are not only a more objectivemeasure for physician productivity, but, being that theRVU amount is assigned to each service via CPT codes,they also have a direct relationship with billing compliance.Because reimbursement per CPT code varies greatly bythe geographic location of the practice, RVUs may be theonly way to compare productivity between practices andindividuals in different regions.

At the end of the day, what really matters economicallyis collections. We track these on an individual and groupbasis, monthly and semiannually, and notice that the ratioof collections to billed charges tends to vary little amongindividuals, unlike the individual payer mix, which can revealmarked differences in the ratio of collections to billed chargesand indicate the need for contract renegotiation or evenoutright termination.

Comparisons between office-generated and hospital-generated collections are startling. It is well known thatreimbursement for surgical procedures has plummeted.Yotan calculates office fees increased 51% while surgicalfees decreased 28% from 1995 to 2004 [1]. As a group,OCUA generates only 15% of its income from the operatingroom, and this percentage is remarkably reproducible overfour years, varying only from 14.5% to 16%; individualstrack from 7% to 23%, with the highest level representingincome generated by our male infertility specialist who ishandsomely rewarded in cash for surgical procedures. Byusing these data, we are able to objectively determine thecruciality of the office work relative to the financial healthof the practice. Understanding its significance in comparisonto hospital time enables us to deduce how to best spendour time, without sacrificing quality care. We now seethe average income per patient encounter as well as persurgical procedure and can look at income per unit of time,comparing the office to the hospital. We are using a halfday as the basic scheduling unit, and, consequently, it isexceptional that anyone leaves the office to do a case inthe middle of a block. To that end, individuals scheduledfor the hospital round on all the patients for the practicebefore or between cases to preserve the scheduling unittime commitment; those that are in the office stay in theoffice. It was only when we had analyzed this objective andreproducible data for our income that we really came tounderstand how we make our money. This is a powerfulexample of how benchmarking has modified physicianbehavior and enhanced productivity.

While planning the space and designing of our new office,we looked at two years of encounter data for each physicianfor everyday. We analyzed the number of patients each MDsaw per half day and how many office procedures they didper session. We counted the procedures that required a largerroom such as a prostate biopsy or cystoscopy which allowedus to most accurately predict the number of exam andprocedure rooms that were required. The data showed that1 procedure room and 2 exam rooms per physician were suf-ficient for our patient volume. This is an eye-opener for thoseindividuals previously overestimating space requirements.The office is configured for 23 exam/procedure rooms, with

Paul A. Brower 3

room now for 2 urodynamic setups, 3 ultrasounds, andcapacity for numerous endoscopic and bladder scanningprocedures. Encounter data for the first two years in thenew facility shows that increases in exams, procedures, andincome are substantial. The 23 rooms allow 7 MDs and a PAto work simultaneously.

4. CONCLUSION

In conclusion, we find that quantifiable information whichis based on data analysis rather than subjectivity canallow for physician behavior modification and unnecessarypredilections. The physicians in the OCUA responded quitefavorably to this information when it was presented to themin a transparent manner. The numbers do not lie. Time spentdeveloping a panel of internal benchmarks and trackingthem regularly enables us to identify clear patterns, integratecritical functions, reduce inefficiencies, and improve thefitness of our practice.

Given this success, we are hopeful to see an increase inoutreach activities among urology practices so that we canbegin the process of external benchmarking. Originality isgreat, but there is limitless value in learning from others.

REFERENCES

[1] Y. Lotan, J. A. Cadeddu, C. G. Roehrborn, and K. H. Stage, “Thevalue of your time: evaluation of effects of changes in medicarereimbursement rates on the practice of urology,” The Journal ofUrology, vol. 172, no. 5, part 1, pp. 1958–1962, 2004.

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