Physician extenders are cost-effective approach
PAs help improve efficiency without increasing costs
When Orthopedics Northeast of Fort Wayne, IN, began to grow rapidly, administrator Rich Hively had to consider how to improve efficiency without adding another surgeon. "We were trying to avoid having two physicians working on the same surgery," Hively says. "Managed care was just coming into this market, and to stay ahead of the game, we really had to improve our efficiency while monitoring our costs." The decision he and the practice made: Hire a physician assistant (PA).
The consensus from Hively and other practice leaders Physician Relations Update interviewed who have gone down the PA path is that PAs can lower costs, increase efficiency, and add revenue to a practice. And based on data from the Medical Group Management Association (MGMA), a PA’s compensation to production ratio is 37%, compared with 43% for a primary care physician.
PAs free up physicians’ time
Hiring PAs has helped Hively’s practice save money in salary costs and has freed up physicians’ time to see more patients. "The going rate [for PA salaries] in this market is $45,000 to $60,000 per year in salary depending on experience," Hively says. "That’s about a quarter of what another surgeon would cost."
The addition has allowed the surgeons working with the PA to see more patients, he says. "They can prepare bone grafts and replacement tendons. They can suture and do the rounds in hospitals. They can triage ED patients or see the patients after surgery. This allows the physicians more time to deal with new patients."
While Hively and his orthopedics practice are in a special situation, family practices have also benefited from the addition of PAs and nurse practitioners, also known as physician extenders.
The Lewis-Gale Clinic in Salem, VA, has 21 extenders in its 130 physician practice. Virtually all of them are in family practice, says Bruce Hagadorn, MD, medical director of the clinic.
The first physician assistant joined the practice almost five years ago, he says. Although after a year he moved to an occupational medicine practice, Hagadorn says good patient acceptance and improved efficiency opened the door for other physicians to request physician extenders.
There are many roles that an extender can play in primary care practices. Hagadorn notes that one of the communities served by PAs and nurse practitioners has a large nursing home population. The addition of the extenders allowed the physicians to spend less time in the nursing home and the extenders to provide a good deal of the on-site care.
PAs expand patient base, add revenue
Other roles for midlevels include patient education and counseling and prevention and wellness programs.
Hively says extenders offer a practice a less expensive way to expand its patient base. He estimates that Orthopedics Northeast will see an increase of 10% to 20% in its patient panel with the addition of the initial PA. "I know already that we don’t have two surgeons tied up on one case, and that has to help our productivity," he says. "And during the summer, they can handle the rechecks of patients while a surgeon is out of town. That also helps the patients because they are seeing someone they know, not a doc who they have never met."
Lynne Mumaw, RN, MS, director of the geriatric nurse practitioner program at Friendly Hills Healthcare Network in La Habra, CA, says that in Orange County where prices are among the highest in the state a nurse practitioner can command between $60,000 and $65,000 per year in salary alone. More typical is the $40,000 to $50,000 range of the San Diego area, she says. "That is still a lot cheaper than what a doctor fresh from his residency would cost."
Even if the costs were roughly equivalent, there are those who prefer the experienced midlevel to physicians just starting out. Dean Elzey, MD, medical director of Redimed of Fort Wayne, IN, says that most midlevels are aware of their limitations and know what they can handle.
Elzey has worked with midlevel practitioners for more than 20 years. "The financial savings are obvious," he says. Working with three urgent care centers in a city with about a dozen other such businesses, Elzey knew he had to be able to compete on efficiency and price. By bringing in a PA to each facility, he effectively doubled the capacity of the centers to see patients.
"The average time from walking in to the clinic to walking out is about 35 minutes," he says. "At a typical clinic with one doc, that time is an hour and 15 minutes."
There are strong arguments that PAs and nurse practitioners can add revenue to a practice. The latest compensation and production survey by MGMA (see story, below) shows the production of a typical PA averages $150,098 but can be nearly $200,000 per annum in revenue derived. Salary averages about $55,000. That’s a compensation to a production ratio of about 37% compared with 43% for a primary care physician with production of about $312,000 and compensation of about $135,000. In fact, there are some places where nurses are being ousted in favor of PAs, Hively says, "since you can bill for a PA but not for a nurse."
But Hively says a practice should not add midlevels simply to expand revenue. "Don’t look at it as a money maker. It’s about increasing efficiency and providing better care for your patients. It’s just a nice bonus that they can add to your revenue stream."
Mumaw agrees. "Our goal was to decrease the inappropriate transfer of patients from nursing homes to hospitals," she says.
"We don’t have hard numbers on a decrease in admissions, but we know that ED visits and transfers are down and that 90% of the transfers are planned."
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