Greater control improves care, says occ-med group
Complex medical equipment such as MRI units and extremity scanners don’t come cheap, but in the long run, purchasing such equipment and providing these services in your own facility can help to significantly improve your bottom line. What’s more, the increased control you have over these processes also will improve quality of care.
That’s the dual hypothesis that led officials at Southern California Orthopaedic Institute Medical Group (SCOI) in Van Nuys to bring such services in-house, says Cindy Lesonsky, CPA, who is CEO and CFO of SCOI. "With 27 physicians, we have lots of referrals [for scans]," she explains.
"We just signed doctor No. 27, so there are 27 physicians who potentially will feed into the MRI referral sources as well as the physical therapy practices," adds Judy Colby, RN, COHN, workers’ compensation liaison at SCOI, which includes a headquarters and eight satellite facilities, with a complete PT [physical therapy] department and a wholly owned surgicenter in its headquarters. The staff include four physiatrists (nonsurgeons involved in physical rehab) as well as orthopedic surgeons.
The new equipment also gives SCOI greater creativity for referrals, says Colby. "LA has a very mobile population," she notes. "It’s not uncommon for someone to start out as a Bakersfield patient, but because of the types of services they need, they could end up down in Van Nuys — which is 90 miles south of Bakersfield — for their surgery. If you have to choose between that and waiting two weeks for an appointment in Bakersfield, you may opt for a different doctor — and for the [trek] — in order to be seen earlier. The bottom line here is that we have more opportunities to enhance revenues."
Two machines to start
The investment has begun with two machines. The first, a 1.5 Tesla MRI unit, was delivered in April 2002. It was installed after completion of new construction on space within SCOI’s 92,000-square-foot headquarters that already had been earmarked for growth.
An extremity scanner, which Lesonsky hopes will be installed by the end of summer, was purchased for one of the larger satellite offices. Shaped like an oven, it allows for the scanning of body parts such as feet and knees. "It’s similar to the MRI, and gives excellent quality," says Lesonsky.
The cost, however, is only 40%-50% of an MRI, and requirements for the room are not as severe. "It doesn’t require RG shielding, and it can go on the second floor because it’s not as heavy as the MRI," Lesonsky explains. She adds that the physicians are very excited about the extremity scanner, and based on its anticipated success, hope to consider using additional scanners in some of the larger satellite offices.
In evaluating this strategy, quality is at least as important as revenue enhancement, says Lesonsky. "One thing I’m really proud of is that our physicians really put quality of care first," she says. "They told us that if the quality was not acceptable, we shouldn’t do it. It leads to problems down the road if the scans are not good and you make a poor diagnosis, or if you take people to surgery who don’t need it or you perform the wrong surgery."
Lesonsky says that in ancillary services, greater control leads to greater quality. "You can contract with a radiologist you like and who does good reads, or with someone who is particularly good on spines," she observes. "You also have more control in terms of techs [when you bring services in-house]."
If you send patients out and you believe they are not receiving excellent care, "you can complain, but that’s it," Lesonsky notes. "This way, it’s your place. You not only have control over the people, but they feel they are more a part of things and they’re happier."
In-house PT services also offer another opportunity for improved quality, notes Colby. "Several years ago, there was some state legislation that led all medical providers to believe it was illegal to own and operate your own PT practices because of the self-referral issue," she recalls. "That whole scenario has now relaxed. We had contracted out physical therapy and were increasingly dissatisfied with the quality and elected to bring it back in-house two years ago. The physicians have been much happier since that change, and as a result, we have also begun to offer it in some satellite facilities."
Not for everybody
From a financial standpoint, the new investment seems to be paying off, says Lesonsky. "We’ve been doing 14-15 scans per day," she notes. How soon does she expect to recoup her investment? "Usually you lease this type of equipment [due to cost], although we’re buying the extremity scanner," she says. "We would envision being in the black within six months in both cases."
Nevertheless, she notes, bringing such equipment in-house is not necessarily going to be as profitable for all occ-med practices. "It really depends on the practice," she explains. "We have three spine physicians. If we did not have these scanners in our main office, we’d lose all that spine business. For us, spine referrals are clearly very important. But if you had a sports medicine practice and you didn’t do a lot of spine work, you might not lose very much business [by not having in-house equipment]."
You’ve really got to study the numbers, she continues. "If you don’t have an MRI now, see what you’re referring out. If it’s 100 patients a month, and you’d get $1 for each scan you did in-house, if the associated expenses of the equipment are less than $100 a month, it probably makes sense to do it."
[For more information, contact:
• Cindy Lesonsky, CPA, CEO and CFO, Judy Colby, RN, COHN, Workers’ Compensation Liaison, Southern California Orthopaedic Institute Medical Group, 6815 Noble Ave., Van Nuys, CA 91405. Telephone: (818) 901-6600.]
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