VEGF Trap-Eye yields positive DME Phase II data

April 30, 2010 by Ann Deters  
Filed under Eyeworld

VEGF Trap-Eye demonstrated a statistically significant improvement in visual acuity over 24 weeks compared to macular laser therapy in patients with diabetic macular edema (DME), said co-developers Regeneron Pharmaceuticals (Tarrytown, N.Y.) and Bayer Healthcare (Leuverkusen, Germany) in a joint press release.

In this study, visual acuity improvement was assessed by the mean number of letters gained over the initial 24 weeks of the study, the companies said. The double-masked, prospective, randomized, multi-center Phase II trial evaluated 219 patients with clinically significant DME with central macular involvement. The patients were randomized to five groups.

The control group was given macular laser therapy at week one, and these patients were eligible for repeat laser treatments, but these were available in limited frequency of no more than at 16-week intervals. A total of two groups received monthly doses of 0.5 or 2.0 mg VEGF Trap-Eye throughout the six-month dosing period, and two groups received three initial monthly doses of 2.0 mg of VEGF Trap-Eye (at baseline and weeks four and eight) followed through week 24 by either every eight-week dosing or “as needed” dosing with specific repeat dosing parameters. At week 24, the macular laser therapy group (N=44;1.7 treatments) had gained +2.5 letters; the VEGF Trap-Eye 0.5 mg monthly group (n=44; 5.6 injections) had gained +8.6 letters; the VEGF Trap-Eye 2 mg monthly group (N=44; 5.5 injections) had gained +11.4 letters; the group receiving VEGF Trap-Eye 2 mg every other month, following three monthly injections (N=42; 3.8 injections) gained +8.5 letters, and the group receiving VEGF Trap-Eye as needed following three monthly injections (N=45; 4.4 injections) gained +10.3 letters.

Regeneron said additional results will be available later this year.

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Take steps to prepare for insurance exchanges

Health insurance exchanges, not unlike the ones already operating in Massachusetts and Utah, are expected to play an increasing role in individual and micro-group insurance distribution. These exchanges will not exist in a vacuum; they will touch every part of the healthcare system and require substantial changes to the way payers do business.

Begin taking specific steps today (“no regret investments”) to prepare for the risks and opportunities exchanges will create. These investments will enable payers to improve customer service, enhance decision-making and reduce administrative and care costs, no matter the result of reform legislation over the next few years. The three areas of focus are:

1. Sales and service transaction efficiency. With potentially tens of millions of Americans accessing insurance through exchanges, health plans will need to operate more quickly and efficiently to service this fast-paced and high-volume market segment.

2. Applied business intelligence. After healthcare reform is enacted, insurance will be more retail-oriented and no longer medically underwritten. Payers will have to rely on more robust decision support to better understand their customers’ buying behavior, lifestyle preferences and medical history and to foster strong and profitable customer relationships.

3. Constituent engagement. In this new retail marketplace, competition will be fierce. Payers must differentiate themselves through systems and business processes that better engage and retain brokers, federal and state governments.

Begin with seven “no regret” investments now. These are not “no risk” investments; however, without these investments, payers may find themselves unable to compete for and profit from the expanding and sizable individual and micro-group market.

Sales and Service Transaction Efficiency

With the large influx of new individual and micro-group customers accessing insurance through health insurance exchanges, payers must focus on transactional efficiency if they are to remain profitable and competitive. Importantly, various reform proposals include taxing health plans and setting minimum medical expense ratios; therefore, plans must reduce administrative costs.

1. Quote-to-card process. Payers should create a single, integrated system that can automatically carry the customer from enrollment at the exchange, to ID card generation, and to post-sale service. Because customers likely will expect instantaneous answers when using the Web-based exchange, the old way of doing business—including full medical underwriting and lengthy case installation windows—will not provide competitive advantages or profitable outcomes. Payers should invest in multi-payer architectures that integrate case installation and policy administration.

2. Eligibility determination. To ensure proper pairing of the low-income consumer and a subsidized insurance plan, payers will need to develop multi-directional eligibility determination utilizing the exchange. Payers must ensure that the information they receive is accurate and they will need to get clarification quickly and efficiently. For example, payers should develop interfaces with payroll companies to provide for real-time wage and tax determinations.

3. Care management integration. Given that most reform efforts call for all risk to be treated equally and requires guaranteed issue for pre-existing conditions, payers must leverage key enrollment cycle data (e.g., health risk assessments) earlier and more effectively. Members who are predisposed to certain conditions or who have pre-existing chronic diseases must be routed immediately to appropriate care management programs. Payers are advised to develop processes that enable them to immediately recognize high-risk enrollees and divert them to appropriate care management programs.

Applied Business Intelligence

Working within the exchange framework—with more competition, more enrollment, and more unseen risk—intensifies the need to provide and receive decision support. Health insurance exchanges will give payers instant feedback, letting them know which offerings are enticing customers, which are not, and what needs to change.

1. Decision-support tools. In an exchange, consumers will be given multiple health plan options coupled with extensive information, but few consumers will have sufficient expertise to choose the best option. At the same time, benefits are becoming more complex. For example, value-based benefits plans or high-deductible health plans offer increased options for lowering costs, but these plans may be confusing to consumers who are new to the marketplace. That is why decision support will be vital. Payers must offer benefit-modeling tools that will work within the exchange infrastructure and help consumers choose the best insurance plan for their needs.

2. Customer segmentation. Soon, policies could prohibit insurance companies from rejecting applicants. Nor will payers be allowed to charge higher premiums based on pre-existing conditions or certain demographic information. Because premiums will be regulated and largely the same for all customers within a geographic region, payers should develop tools with which to segment, within the bounds of the law, new exchange customers. These tools will include health risk assessments, personal health records and, importantly, behavioral analytics that can determine the best health plan for each consumer.

3. Product performance. To remain competitive, payers participating in health insurance exchanges will require access to real-time product performance reporting capabilities. These will provide payers’ product development units with critical business intelligence regarding the specific products that customers are buying. Today, most health plans have visibility only into which of their proprietary products are sold; they do not have real visibility into what business is lost and why. Payers that leverage this information to quickly respond to market demands, and design and offer new plans—such as consumer-directed health plans, value-based benefit plans, wellness programs, integrated health savings account use, and more—will be able to capture, retain and enhance market share.

Constituent Engagement

Within the framework of the health insurance exchange, the goal of constituent engagement will remain the same as it is today: to create an efficient dialogue between the constituent and the payer as well as among the constituents themselves. However, the constituents will change. No longer will brokers, individuals and employers be the sole constituents. Payers probably will find that they have expanded relationships with state governments and the federal government, and that these new constituents have new rules and different needs.

States are likely to be major players in the world of exchanges, regardless of how exchanges are organized. Payers should design systems that accommodate state governments’ unique requirements, including standard enrollment applications, state commission payments, complicated billing and eligibility systems, and numerous reporting requirements. In addition, the federal government will play a role in the exchange operation and payers should prepare now to support reporting requirements. Finally, brokers will continue play a critical role in attracting good risk and explaining complex benefits to consumers. Payers should look to offer value-added services and products that can help brokers grow their business.

The future of the American healthcare system is in flux, but the future of payers is not: They will remain the primary purveyors of health insurance. In fact, their role may expand drastically as more people enter the individual and small group market.

Eric Grossman is Vice President, Enterprise Strategy and Communications, for The TriZetto Group, a healthcare IT firm whose technology touches more than half of all insured Americans.

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Payment reform redefines provider performance management

In the face of imminent payment reform and deliberate focus on quality and outcomes, health plans are increasingly turning to provider performance management as a strategy to provide an analytical framework for informed decision-making. This change in the health plan’s approach to provider reimbursement is rooted in the need to move from traditional fee-for-service models to a payment model that accounts for providers adhering to best practice service delivery, and ultimately, to improving healthcare outcomes.

Integrated provider performance management’s true purpose is to ensure that the contractual obligations of payment and best practice service delivery are met between health plans and providers. This, in turn, will produce better quality outcomes for members and reduced costs for health plans. As simple as this may seem, performance-based provider contracts involves the marshalling of many activities such as: gathering clinical and member care experience data, the measurement of the level of provider collaboration and the provider’s payment/contractual information, to ensure that these goals are met. As health plans consider the implications of provider performance management, several complex questions must be considered in order to successfully implement a new provider performance management strategy.

Developing an Integrated Provider Performance Management Strategy

1. Assessment of Health Plan Operational Goals

Integrated provider performance management is an innovative, phased evolution, which focuses on three critical areas: the provider’s clinical performance, the health plan’s provider contract information/structure for services rendered, and how integrated performance and contractual obligations influence a health plan’s payment for those services. Health plans must identify their operational goals within each of these areas and determine what process and systems are needed in order to make performance management operational. For example, all health plans will find themselves residing at different phases of the evolution cycle. Consequently, they will vary as to how they materialize from routine maintenance of provider information to external business goals such as operationalizing pay-for-performance programs, provider collaboration and quality targets.

2. Assessment of Health Plan’s Performance Measurement, Contractual and Payment Processes

After determining the operational goals of integrated provider performance management, the health plans need to assess: their processes within provider performance measurement (what will be measured, when and how), the ability to establish and monitor adherence to contracting standards, and the processes involved in final payment to providers for services rendered. To achieve an integrated state for these processes, health plans must understand the inter-dependencies of these actions and if/how their system capabilities could allow for the intelligent combination of this information in order to render accurate claims payment.

3. Assessment of How Health Plans will Measure Provider Performance

The health plan’s ability to measure and report on what they consider to be their operational goals for provider performance management is a critical component for this initiative. It is clear that the healthcare market is calling for greater transparency in the provider payment process, especially when member outcomes become part of the equation. For integrated provider performance management to be adopted by the provider and member communities, a dynamic, flexible and easy to use reporting capability must be enabled by health plans. The reporting capabilities being requested by providers, members and the government are needed in order to move current performance management programs from pay for reporting models, to models that have clearly defined contractual and payment obligations that reward providers and members for improved outcomes.

Again, all of these strategy related considerations call for technologies, applications and processes that connect the planning and operational functions of provider management across the entire organization to improve organizational alignment and provider performance. This, in essence, is integrated provider performance management.

Healthcare Market Trends for Integrated Provider Performance Management

While the call for such a coordinated strategy to provider management is becoming an operational necessity, health plans are also experiencing two new market trends that are pushing the need for these capabilities in a more acute manner.

First, employers are increasingly demanding tailored products and benefit designs. This demand is driven by their increasing awareness of the value of such customized offering to better serve their employee base. Secondly, incentive alignment and payment reform is requiring health plans to establish business practices that are both responsive and flexible in the face of unexpected changes to payment and network structures.

Many health plans are unprepared to adequately respond to these two new challenges. Their current provider management systems and claims adjudication systems are poorly connected to several key business functions such as credentialing, contracting, centralized pricing, negotiation and financial planning. This siloed system approach renders basic decision support ineffective. For example, health plans often fail to easily and routinely answer two key questions: “What providers are covered by a particular contract?” and “What contracts cover a specific provider?” A patchwork of ad-hoc solutions often serve such tactical needs, but were never designed for larger scalability or flexibility. The emergence of tailored products and payment reform further strain these systems and create management challenges for large-scale deployments and new innovative programs.

Current operational systems in health plans work by mapping a few, pre-defined benefit design packages to pre-defined provider networks/products. These older systems lack the sophistication that tailored products demand for accurate claims payment. Health plans are left to cope with this gap by resorting to a patchwork implementation of manual and ad-hoc approaches. Often, these demands for increased system sophistication end up creating highly redundant and disconnected fragments of provider information, such as operative rate sheets/contracts, applicable sub-networks, or network criteria and specifics of contract coverage within multi-tiered health systems. These operational complexities increase the propensity for information leakage and misidentification during the adjudication of claims, as well as challenge the accuracy of the claims payment.

Payment reforms bring further challenges. Traditional payment models, such as fee-for-service and capitation, involve a straightforward set of obligations with the provider. However, programs such as the Patient Centered Medical Home and collaborative care team bonuses require that adjudication and pricing systems have an additional awareness of the collaborators or team members. These team-based associations may have no organizational relationship to the primary care giver, or to additional payment constructs that require the examination of a members’ care over time, or to a provider’s aggregate performance over a population size. In the face of such information demands, many health plans are recognizing the need to coordinate and unify traditionally disconnected business functions regarding setup of providers, contracts and pricing. Additionally, health plans will need to incorporate the members’ care and the providers’ aggregate performance during the establishment of the criteria for pricing and contracting.

The challenges described above are daunting, and require a re-examination of the details of products, networks, contracts, pricing, provider data and the members’ care information. Without examining and improving each of these areas, health plans will fail to achieve the proposed value of integrated provider performance management.

There is an emerging awareness that a bottoms-up codification and cross-functional coordination of all these significant elements is a necessary step in being prepared for and responsive to these new market pressures. As health plans embark on a connected and coordinated strategy for an integrated provider performance management approach, they also recognize the need for a natural evolution, which is in alignment with their own growth and operational goals. All of this activity supports the underlying premise of current payment reforms. Health plans that offer provider reimbursement transparency and an increase ease of doing business with the health plans themselves, are on the right road to enable performance based delivery environments. The health plans that achieve this in the near-term are those that will experience long-term success.

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Survey provides “snapshot” of health IT jobs

April 16, 2010 by Ann Deters  
Filed under Healthcare IT

Health professionals believe that between 50,000 and 200,000 new jobs will be created in health IT by the year 2015, according to a recent survey.

The American Society of Health Informatics Managers (ASHIM), a nonprofit healthcare organization for health IT professionals, conducted the survey in response to data from the United States Bureau of Labor Statistics, which indicated a national deficit of qualified health IT workers. ASHIM officials said the survey’s purpose was to provide an early stage snapshot of the jobs activities taking place around health IT in the United States.

The Salt Lake City based organization surveyed 135 health professionals, 20 percent of which were beginners in health IT (one year: student), 30 percent of which were intermediate (one to five years: decision influencer, working level) and 50 percent of which where experts (five-plus years: decision maker, senior management).

According to the survey more than 10 percent of respondents believe that more than 200,000 new jobs will be created in health IT by the year 2015. Almost 30 percent think 50,000 to 100,000 new jobs will be created. And more than 40 percent believe there will be 50,000 new jobs created.

The survey found that most health professionals believe that health IT employers want both IT and healthcare experience and knowledge and that health IT certification is valuable in the hiring process.

According to a blog posted on InformationWeek, San Francisco EMR provider Practice Fusion is not worried about finding employees that have clinical experience when it comes to hiring new staff. As Ryan Howard, the company’s CEO, explained to InformationWeek, his firm “doesn’t want to hire people with preconceived mindsets about EMRs.”

According to the ASHIM survey half of survey respondents believe that IT professionals will be the more likely than healthcare industry professionals and new students to seek additional skills to work in the industry.

“While employers are ramping up to adopt electronic health records, IT workers are looking to augment their skills to meet those needs and to effectively communicate their qualifications,” said ASHIM Senior Vice President Stephanie L. Jones. “ASHIM believes it is important to understand and support the evolving needs of the healthcare community and will continue conducting this survey, adjusting questions, to inquire about them,” she said.

Respondents cited consultants and trainers as most likely to fill new positions (63 percent and 61 percent, respectively), with sales and IT positions following closely behind.

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Getting Skin in the Game

Orthopedic surgery can be a demanding specialty, and with its rewards comes its challenges and opportunities. No one knows this better than J.F. James Davidson, MD, who specializes in sports medicine, shoulder and knee surgery and who is part of Canyon Orthopaedic Surgeons and also practices at Gateway Surgery Center, both in the metropolitan Phoenix area. He discusses life inside and outside of the OR.

Q: Why was the specialty of orthopedics right for you?

A: I greatly respect physicians in other fields such as family practice, oncology and trauma surgery, to name just a few. Good physicians can solve a complicated medical puzzle and potentially save a sick person’s life. These physicians carry the burden of a weighty responsibility. One reason I chose orthopedics and specifically the area of sports medicine is because our patients usually have treatable problems and the capacity for relatively rapid improvement. They usually do not have life threatening conditions and are highly motivated to improve in order to maximize their quality of life. I remember rotating through cardiology and nephrology in medical school and learning the serious consequences of chronic disease. On the first day of the orthopedic clinic we examined a man with a fractured patella. The patient jovially answered our questions regarding how he managed to be kicked in the knee by a goat. In spite of the discomfort of the fracture the patient laughed at his unusual predicament. I though, now I have found the right specialty.

Q: The practice of medicine is becoming more challenging in terms of medical malpractice, tighter reimbursement, etc., so how do you cope with these modern challenges?

A: I have had some very good teachers and role models. Bill Brainard, MD, one of the founders of our group, Canyon Orthopaedics, taught by example the benefit of finding enjoyment in working with patients and colleagues, and in performing surgery. Our practice has the innate rewards of helping people, solving problems, interacting with others. My partners and I feel fortunate to do what we do. The negatives certainly can be a drain on the system, but we try to focus on the positive reasons that we come to work each day.

Q: Most physicians are never trained in business, and when they become medical entrepreneurs, they can be unprepared for the rigors of business. What has been the most valuable lesson you have learned about being a medical entrepreneur?

A: As I mentioned, I have had some very good teachers. Dave Ott, MD, was the driving force developing our successful orthopedic ASC, Gateway Surgery Center. He proved that bringing traditional competitors together for a common business goal can lead to a win for all. Prior to Gateway’s development, Canyon Orthopedics consulted with a national firm regarding the viability of creating a small ASC as an extension of our six-man group. The consultant determined that the project would be worthwhile, but with lower volume than ideal. Instead we became part of the 30-physician Gateway ASC. This has proven to be far more efficient and successful than the project we could have done on our own. Currently under construction is the Southwest Orthopedic and Spine Hospital, an orthopedic specialty hospital in Phoenix. For this project 37 orthopedists and spine specialists have partnered with Catholic Healthcare West and USPI to build what we are determined to be the highest quality orthopedic facility in the region. Finally, a number of currently independent orthopedic groups in greater Phoenix are now working on the merger of our established practices to form a single large orthopedic group. We are hopeful that this of relationship will benefit from similar synergy as Gateway Surgery Center.

Q: What clinical lessons have you learned from sports medicine that you carry over into your other practice, and vice versa?

A: A high school athlete with the goal of a college scholarship is driven to return to the playing field as quickly as possible. A few extra days off the field may mean missing a game and a chance to help his team win and shine for a college scout. The athlete wants aggressive treatment to get him back in the game as quickly as possible. In worker’s compensation cases, an injured worker may or may not have similar motivation to get back to work quickly. However, fast-tracking treatment leads to more rapid return to the job, and less time on sick leave. Similarly, the injured worker (and his employer) benefit from avoiding unnecessary operations, but meanwhile not delaying the inevitable procedure. If a surgery ultimately will be required then spending time on additional therapy is not advantageous. Making this determination requires experience and judgment. The same is true in the treatment of the athlete. On the other hand, many middle-aged athletes as well as injured workers have degenerative changes seen on an MRI. It is important to make clinical decisions as to what changes seen on scan are degenerative and incidental versus acute and painful. An over-read of an MRI can lead to a potentially avoidable surgery in both the athlete and laborer.

Q: What are the technological/clinical advancements in orthopedic surgery that get you most excited?

A: I’m excited by a number of new devices and procedures. I’m always on the look-out for methods leading to better or more reproducible results; easier or less invasive ways of doing procedures; and faster or less painful recoveries. Throughout the year the Arthroscopy Association of North America (AANA), hosts cadaver training courses to teach new techniques and improved ways of performing standard techniques. I have been an assistant instructor at the AANA shoulder courses for years and always learn from the master faculty leading the discussion and training. Two areas of special interest are the use of preoperative MRI to determine the pattern of rotator cuff tears and method of repair; and the use of an MRI to preoperatively design cutting jigs to add to the precision of total knee replacement.

Q: What do you believe is the future for outpatient orthopedic surgery in terms of keeping up with the ever changing medical and economic environment?

A: Practicing-physician involvement in management and ownership is one key. No one has a greater interest in maintaining a top-flight center than the orthopedist taking care of the patients, doing the surgery, and watching the bottom line. As we discussed earlier, my partners and I are betting on “big is better.” We built Gateway without a corporate partner. Last year for a number of reasons we sold a portion of our center to AmSurg. We are hopeful that this association will lead to economies of scale in purchasing and a stronger position in contracting. Cooperation with our colleagues has led to success in business and has improved our practice of orthopedics as well. We consult one another, adopt best practices, and learn from each other’s successes and failures. Healthcare is changing rapidly and we will all need to stay nimble to adjust to these changes.

J.F. James Davidson, MD, graduated with honors from Yale University and received his MD degree from Columbia University. He then completed his orthopedic residency and sports medicine fellowship in Phoenix. He is board certified by the American Board of Orthopaedic Surgery and is a fellow of the American Academy of Orthopaedic Surgeons. He has also served as an officer in the American Orthopedic Society for Sports Medicine and the Arthroscopy Association of North America. Davidson has published scientific papers and spoken nationally on topics ranging from anterior cruciate ligament reconstruction to arthroscopic rotator cuff repair. He is the lead spring training physician for the Chicago White Sox as well as the team orthopedist for several local schools. His special interests include disorders of the shoulder and knee. Davidson has been with Canyon Orthopaedic Surgeons since 1994.

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2010 Management Guide

March 24, 2010 by SurgiStrategies Articles  
Filed under Features

Dealing with Survey Deficiencies

After receiving 23 pages of citations and a threat of losing its license, a Texas ASC (that had gone three years without a state/Medicare survey) recognized its desperate situation. While many of the citations concerned the new conditions for coverage and multiple notes for the same deficiency, the center still needed to respond with corrections within 10 days. Typical of smaller facilities, the employees responsible for compliance activities are the same individuals involved in routine care. While intending to comply with regulations, patient treatment takes priority and administrative paperwork falls behind.

In addition to their daily routine, management now needed to research, evaluate and interpret the regulations in order to rewrite/update their policies within the response time. The practitioners (both administrative and physician) realized that the task they faced required the resources and skills of an outside expert. The facility searched for a consultant that could help solve their problems. Separated by 1,500 miles, with the days ticking away, recognizing travel arrangement difficulties and skyrocketing travel expenses, they requested FWI Healthcare’s assistance.

Receiving and reviewing their citations, FWI presented a cost-effective proposal to the client that was accepted. The client faxed requested documents for our analysis. We discussed existing materials and the need for changes. FWI also developed some revisions to their policy manual and the plan of correction for submission. This information was provided to the client and after telephone clarification and minor adjustments; the transcripts were ready for use.

The plan of correction was accepted and upon the surveyor’s return for a follow-up visit (finding everything to be acceptable), she recommended the license and certification be renewed.

Many small ASCs do not have personnel with experience, knowledge or time necessary to rapidly respond to deficiencies cited by survey agencies. This is where relying on the resources of consultants (who provide assistance on a fee for service basis) is invaluable. All of FWI’s work was completed with minimal expense and without either party leaving their office.

By Roger Pence, president, FWI Healthcare www.fwihealthcare.com • 419.298.3700

Challenges Unique to De Novo Facilities

De novo projects can be a long and not always painless process, but like turnarounds, they have incentives as well. With a new development, we are able to construct the center from the ground up to ensure our high standards are met and so high-quality care can be administered efficiently from day one. We are also able to form a great group of physician partners with the right balance for a successful ASC. Now, just because we get to make initial decisions on the facility and the business with our partners, it is not always roses when developing a new center. We deal with doubting partners, setbacks, stumbles and roadblocks. In the case of our new de novo facility in Mt. Dora, Fla. we hit an unusual roadblock — gopher turtles. Yes, gopher turtles. This protected species was living on our construction site. We had to have the turtles moved, but that could only be done after three consecutive days of 50 degrees or warmer weather. The turtle relocation caused about a six-week delay in the building process, and while no one could have anticipated a gopher turtle infestation, we took care of the situation and did what we could to get the project back on track.

We found that the perspective of the partnering physicians in de novo projects is quite different from that of partners in turnarounds. While in turnarounds we are often thought of as better managers than we are, sometimes in new developments we are thought of as worse. Partners focused on financial returns view any stumble on the way to distributions as a failure, when in fact, stumbles are a part of the process and sometimes result in positive outcomes. The objective is to have the “wiggle room” to adjust, correct problems, and move forward.

No matter what we encounter along the path to developing a new center, we are committed to our partners and the success of the center and look forward to developing new, successful centers across the country.

By Tom Mallon, CEO, Regent Surgical Health

www.regentsurgicalhealth.com 708.492.0531

Ostrich Strategies for ASCs: Never A Good Idea

The phrase “burying your head in the sand” has become synonymous with hiding from the truth or hiding at the first sign of danger. Ostriches are alleged to do that, but they actually do not. However, owners of distressed outpatient centers sometimes really do.

Our firm gets involved in helping distressed outpatient centers, including surgery centers, and our experience has shown that it is the rare owner who does not “bury his (or her) head in the sand” hoping that something will occur that will cause the source of the distress to simply go away. Employing an “ostrich strategy” is a bad idea, as well as a waste of valuable time and resources because the sources of distress rarely go away simply and easily.

The “ostrich strategy” usually results in the center being behind in payments to lenders, landlords, the taxing authority, staff and most vendors by the time we get involved. The task of pulling your head out of the sand and developing workable strategies is complex and multi-dimensional, and involves lawyers and lots of different personalities. In addition, there are always varying degrees of trust among the owners and the managers (who are also often owners). Getting to the core problems requires information analysis, lots of conversation and a site visit or two. Once those core issues are made clear, then the people leading the charge put a simple strategy in place. It needs to be simple because additional and incremental complexity will only complicate matters and likely make things worse. Our firm often leads the charge, but many times we do it in tandem with the center’s lawyers. Depending upon how far behind the center is with various creditors and what legal actions have already been taken, the lawyers may well take the lead.

Follow your strategies, keep your head out of the sand, stay calm and focused, engage the right professionals for you and you may be able to yourself of the sources of distress that caused you the problems in the first place.

By Robert S. Goodman, managing partner, The Mansfield Group www.mansfield-group.com 609.267.0990

Adding Specialties to Increase Profitability

Foundation Surgery Affiliate of Huntingdon Valley, Pa. is an AAAHC-accredited, multi-specialty ASC that opened in 2003. With four operating rooms, two procedure rooms and 19 surgeon partners, this 18,000-square-foot facility was profitable; however, there was still a tremendous opportunity for growth through increasing OR utilization and case volume. “We continually strive to develop new tools and methods that will enhance the profitability of our centers while also adapting to the changing outpatient surgery environment,” says FSA chief operations officer Thomas A. Newman. He recalls the FSA specialty and case analysis:

1. Take inventory. FSA creates a checklist of all specialties that can be performed at an ASC.

2. Analyze and evaluate. Management performs an extensive cost/benefit analysis, weighing equipment and labor costs against typical revenues provided by the specialty.

3. Determine which specialty is most worth pursuing.

4. Recruit surgeons. Utilize data collected in steps 1-3 and tap existing surgery partners as a primary resource for new partner candidates.

In the case of Huntingdon Valley, a surgeon partner suggested that the center consider adding fertility as a specialty. Based on that recommendation, FSA performed steps 2-4. During the first month of adding fertility, case volume increased 12 percent and overall revenues increased by more than 25 percent. As a result of this exercise, FSA formalized the process and rolled it out to all of its centers.

“Our center was already doing quite well when FSA performed the specialty and case analysis and presented the impact of adding gynecology partners specializing in fertility,” says center administrator Robert Puglisi. “Now, return is even higher as a direct result of adding our reproductive medicine partners.”

Larry Barmat, MD, one of the center’s fertility partners, says, “Reproductive medicine is almost tailored to the ASC environment because the procedures are of short duration and low risk, thereby lending them to being done in an outpatient setting.”

Chairman of the board Robert Mannherz, MD, says, “The addition of reproductive medicine has been positive for the center on several levels. It has increased the utilization of the center and our cash flow, as well as diversified our services to patients.”

By Caleb Germany, Foundation Surgery Affiliates www.foundationsurgery.com800.783.0404

Reimbursement and Billing Compliance Issues

A full financial, business office and clinical evaluation was performed by Surgery Consultants of America (SCA) and Serbin Surgery Center Billing (SCB); however, this case study is reporting only reimbursement and billing compliance issues. The initial findings were determined during the evaluation. The current improvements are results obtained after twelve months of reimbursement management by SCB.

The Medicare-certified, multi-specialty center was open 18 months, has two ORs and performs an average of 100 cases per month; the physician-owned clinic shared the same site with the ASC. The challenges were as follows:

» Practice software not meeting all ASC needs

» Billing outsourced to clinic billing staff resulting in:

•overwhelming volume

•increase in errors due to lack of ASC billing knowledge

» Revenue stream reduced to trickle

» Days in A/R escalating – 97 at time of evaluation

» Claim backlog growing – minimum 7 to 10 days lag time between services rendered and subsequent posting and billing

» Denial rate climbing – 20 percent to 25 percent first time denial rate

» Cost of staffing and supplies as a percentage of revenue continuing to increase because of claim backlog

» Non-compliance concerns mounting

Our findings and recommendations were as follows:

Processes

» Using practice software

» Recommend acquiring ASC software

» No CMS list of ASC covered services or matrix of insurance contracts

» Recommend providing both to scheduler and insurance verifier

» No up-front collections

» Recommend notifying patient of financial responsibility before DOS

Reimbursement

» Billing not up-to-date

» Recommend hiring additional staff or outsourcing

» Coding inaccuracies identified

» Recommend coding audit by certified coder – rebill where necessary

» Not following up on submitted claims

» Recommend audit to determine timely filing, refunds, resubmission claims

Compliance

» Receptionist making patient contact calls

» Recommend moving these calls to back desk for HIPAA reasons

» No notification to payor of out-of-network status

» Recommend notifying payor at time of verification and again at billing

» No advance notification of financial policy to patient

» Recommend providing written policy prior to DOS via phone or brochure

Our evaluation resulted in the following changes:

» Appointed separate ASC administrator

» Changed to ASC software

» Revised fee schedule

» Acquired copies of payor contracts

» Initiated use of bank lockbox

» Created new insurance verification position

» Established process to collect co-pays

» Developed financial policies to handle self-pay patients, payment plans, financial hardship cases, etc.

» Made changes in business office task responsibilities

Improvements included:

» No billing backlog

» Decrease in days in A/R – 58 percent (97 days to 41 days)

» Increase in average net revenue per case – 14 percent

» Increase in average charge per case – 31 percent

» Meeting billing compliance guidelines

By Caryl A. Serbin, RN, SSN, LHRM SURGERY CONSULTANTS OF AMERICAwww.surgecon.com 888-453-1144

Florida ASC Increases Revenues

Acting as a strategic business partner, NovaMeda dedicates an experienced team of experts to help our ASCs grow and prosper, while assuring the best possible experience and outcomes for both patients and physicians.

We recently increased the revenue of our Florida ASCs by employing a comprehensive managed care strategy. Over the last two years, we have renegotiated contracts with major payors in Florida and increased the value of the contracts by as much as 20 percent. This has equated to an increase in revenue of 5 percent to 10 percent for each of our four ASCs in Florida.

Developing and executing an overall managed care strategy can lead to major revenue enhancement and overall improved financial performance of our ASCs. Our strategy is founded upon the principles of maximizing the revenue of all our managed care contracts, assuring that the ASC is getting paid what it should based on the contract, and monitoring the performance of managed-care contracts to ensure the ASC is realizing projected revenue.

Executing our managed-care strategy begins by reviewing our ASC’s total book of business and managed-care contracts. Using best-of-breed financial models, we assign a value to each contract based on payor case/mix and market dynamics, and then negotiate (or renegotiate) each contract to ensure maximum revenue generated for our ASC. An ongoing process, we employ a proactive stance on managed-care contract negotiations to ensure the profitability of our ASCs.

By Lisa Streit, director of managed care, NovaMed www.novamed.com 888-NOVAMED

Implementation, Cons & More

The Practice Partners in Healthcare (PPH) team met with the physicians and began to plan for the implementation of the single-specialty center. During the planning process PPH reviewed volumes, expenses and thresholds in the CON. It was determined that additional surgeons would be necessary to make the center successful. PPH began to recruit additional surgeons to the project. To recruit physicians it was necessary to modify the operating and partnership agreements to make the arrangement fair for all physicians and not have the initial group control the project. PPH negotiated with the groups for a successful operating agreement and partnership arrangement to allow the entry of new physicians.

The ability of a third party to develop an independent plan, negotiate and execute is necessary to assure the original group and joining physicians that the best plan for the total partnership is presented. During the negotiations it was clear that the groups combining were fierce competitors and the role of PPH was to make fair and strategic decisions that would demonstrate to both groups the combined strength in the ASC setting but allowing the market forces to continue in the practice setting. Furthermore, the individuals had to work together to develop block time schedules and utilization of the center that would present the most favorable results. In doing so PPH developed a block time schedule that interfaced with both practices clinic schedule and inpatient surgical schedules. PPH developed a strategy and schedule designed for each group’s physician to follow block time by that same group. In doing so the potential conflicts of another group adding on patients and extending the operative day would only affect that group and not the competitor.

When administrators are considering modifying of implementing block time considerations on the impact of running over to other physician block time may reduce issues by this practice. The physicians could then work within their individual groups to correct reoccurring situations. Additionally, when administrators are planning for block time the utilization of historical operative or procedure times should be utilized when evaluating the duration of the individual block to allow for the anticipated daily throughput for each surgeon.

By Larry Taylor, president and CEO, Practice Partners in Healthcare, Incwww.practicepartners.org 205.824.6250

Joint Venture Feasibility

In early 2005, Alegent Health engaged Health Inventures (HI) to perform a feasibility study for joint-venturing (JV) outpatient surgery services with physicians at their Lakeside and Bergan Mercy Medical Center campuses in Omaha, Neb. HI conducted extensive physician interviews to educate physicians about the JV process and gauge interest. Based on positive feedback from the interviews and HI’s financial forecasts, it was determined that a JV was feasible.

The degree of physician interest showed enough case volume to occupy two new facilities. However, HI determined the most immediate opportunity to establish a JV was to convert an existing two OR HOPD to a free-standing ASC in a medical office building (MOB) on the Lakeside Campus. The conversion process included obtaining licensure and certification to operate as an ASC. This facility would operate for 18 months while a new facility with four ORs and one procedure room was built in the same building.

Throughout 2005, a steering committee with representatives from HI, Alegent Health, interested physician groups and legal counsel met regularly to determine the terms of the operating agreement and the governance structure of the JV. Meanwhile, valuation firm performed a third-party valuation of the existing ASC. Based on financial projections and this valuation, HI and deal counsel developed a private placement memorandum (PPM) and subscription agreement and opened the “offering” for physician investment.

The offering closed in December 2005. Two major surgeon groups and 19 individual physicians invested in the facility for a total of 31 physician users/owners. Alegent maintains 51 percent ownership in the new LLC that leases operating space from Alegent in the MOB.

The owners appointed a management board (MB) and clinical operations committee (COC) as the principal decision making authorities. The MB has equal physician/Alegent representation and the COC is physician-controlled.

In September 2007, the physician owners moved their cases from the upstairs ASC to the newly constructed facility on the ground floor of the MOB. The high subscription rate of the offering and cash flow from the existing facility provided adequate funding for the construction without any term debt financing. Only a line of credit was needed when the facility opened.

By Catherine A. Martin, contract manager, Health Inventures, LLCwww.healthinventures.com 877.304.8940

Compiled by Jessica Barreras

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ORs of Tomorrow Can Yield Pay-offs Today

March 22, 2010 by SurgiStrategies Articles  
Filed under Features

The operating room (OR) of the future is closer than many facilities think. While the level of sophistication in equipment and technology depends upon a facility’s budget and ability to retrofit to accommodate exciting new developments in OR modalities, facilities should be aware of the changing dynamics of OR design and planning.

The challenges of efficient and effective surgical planning are numerous, according to Charles Martin, AIA, and Lynne Shira, RN, BSN, both principals with the Seattle architecture firm NBBJ, who were part of the Designing High-Performance ORs, a day-long symposium presented by STERIS Corporation last October. Martin and Shira explain that owners/operators of medical facilities must find a way to juggle their increasing equipment needs, technology demands and compatibility issues. They see an upward trend among healthcare facilities in the overall demand for additional space to grow their surgical service lines, including new ORs, procedure rooms and the requisite spaces needed to support these new rooms. Today’s facilities require much greater flexibility in the infrastructure and its operational capacity to accommodate more integrated systems both in and out of the OR. Not only can this flexibility create an environment to better foster staff recruitment and retention, Martin and Shira say, but it can improve the patient experience.

The size of ORs has been increasing over time, with the OR of yesterday being about 400 to 500 square feet, with a total department space of about 2,000 square feet. The OR of today and tomorrow is now an average of 600 to 800 square feet, with a total departmental space between 3,200 and 4,500 square feet. The reason for this expansion can differ greatly from facility to facility, but many institutions are creating hybrid ORs that encompass and integrate surgical and interventional services, imaging and clinical services. This kind of OR can accommodate multiple care-delivery models and new technologies, as well as support clinical and administrative uses.

Fred Bentley, practice manager for syndicated research at the Advisory Board Co., says that ORs have been invaded by numerous “space-eating” technologies, such as PACS, C-arms, endoscopic towers, robotics and inter-operative MRIs. The space around the operating table has become increasingly cramped; an OR of 300 cubic feet frequently must accommodate about 115 cubic feet of surgical and anesthesia personnel and about 150 cubic feet of equipment, leaving just about 35 cubic feet of free space. It can be a struggle for facilities to balance comfort and efficiency, Bentley adds, that an OR of less than 400 square feet is now considered to be an anachronism because of its cramped, inflexible space; the 500-square-foot OR is now a tight fit; and an OR with more than 800 square feet is probably an over-indulgence and has the potential for too much dead space. The sweet spot, Bentley says, is an OR of about 600 to 650 square feet, which has enough space to accommodate equipment, but facilitates enough unimpeded circulation throughout the room. To cope with smaller ORs that cannot be immediately retrofitted, some facilities are opting to move some bulkier pieces of equipment out of the OR, such as a mobile C-arm that can stored in a corridor alcove or an adjacent equipment closet, or using utility booms to get equipment lifted off of the floor. Other facilities are opting for more streamlined integrated interventional suites that come turn-key from manufacturers such as STERIS.

A hybrid OR is quickly becoming a favorite option for some facilities wishing to make better use of their OR space. Neurological surgeon Jeffrey Yablon, MD, of the Lake Norman Regional Medical Center in Mooresville, N.C., defines a hybrid OR as “an actual operating room located within the surgical suite that accommodates uncompromised interventional, open and minimally invasive surgery within a given specialty.” Yablon says that a number of trends are driving the hybrid OR craze, especially recent technological advancements and specialists’ desire to expand their sphere of expertise amidst competing services. Another driver is the limited space with which many facilities must contend; Yablon says a hybrid OR can be used for several services or procedures and will provide maximum utilization of space. Yablon also cites increased competition for procedural services, with cardiothoracic moving into interventional cardiology, interventional radiology moving into vascular surgery and interventional cardiology moving into interventional radiology. Another factor is tighter reimbursement; Yablon says a hybrid OR’s flexibility will allow for this space to be fully used with a continual stream of reimbursement dollars. He adds that increased readiness and flexibility results in fewer complications and better outcomes, which ultimately achieves lower costs and higher profit margins.

Hybrid ORs are a win-win situation for surgeons, Yablon says, because they allow for improved patient care because of integrated technologies, and because they provide room flexibility and improved workflow. Nursing staff members like these ORs because they improve staff productivity, workflow and ergonomics, as well as improve room utilization and reduce scheduling challenges. And administrators like them because they help to retain surgeons and nurses as well as optimize capital monies. Yablon adds that hybrid ORs are not without their challenges – including costs, simultaneous competition for the room’s unique resources among surgeons and the need for continual future upgrades – but says the advantages frequently outweigh the challenges.

One healthcare system that has moved boldly into the OR of the future by embracing cutting-edge technology is the Carondelet Health Network in Tucson, Ariz., whose hybrid ORs boast the BrainSUITE iCT, a dual-room intraoperative large-bore, multi-slice CT with sliding-gantry from BrainLAB. Neurosurgeon Eric Sipos, MD, FACS, medical director of the Carondelet Neurological Institute, says the advantages of a two-room CT scanner system include the minimized disruption of the familiar surgical workflow with a maximized CT scanning range providing the widest range of patient positioning. The surgical table position for scanning can be stored prior to draping to avoid collisions with scanner, and once positioned for surgery, the patient is not moved, especially outside of the sterile air field; the anesthesia is fixed and constant throughout the surgical and imaging procedures. With a sliding gantry moving between two ORs, there might be the opportunity for cross-contamination, but Sipos emphasizes that the preservation of the sterile environment is achieved and the patient in the adjacent OR is not compromised in any way. Carl Colombi, technical consultant with the Integrated OR Solutions (iORS) Division of BrainLAB, says the BrainSUITE fully integrated intraoperative CT surgical operating room can facilitate surgical planning and navigation, as well as achieve data management and coordinated equipment integration.

While this level of technology might be reserved for the larger health systems, ASCs shouldn’t count themselves out of the technology game nor assume they cannot replicate a hybrid OR set-up. “Over the years, we have seen more and more surgical cases migrate to the outpatient environment, primarily due to the advances in anesthetic agents and minimally invasive technologies,” Shira says. “Our previous thinking that an outpatient surgery is for ‘minor’ surgical procedures simply doesn’t hold true any longer. The equipment and technology required for minimally invasive work demands a surgical footprint and boom configurations that are not unlike the inpatient environment. ASCs that want to plan for this technology in the future need to remember this as they are planning.” Shira continues, “Recognizing that ASCs are held to a different building standard than hospitals, there should still be planning for proper air exchanges, good surgical traffic patterns with non-restricted, semi-restricted and restricted zones understood with the design. And of course, there can be no compromise on safety protocols and cleaning protocols regardless of the location of the surgical environment.”

Martin and Shira emphasize that the numerous rapid advances in imaging technology are dictating some OR planning and design elements, and note that many imaging interventions are transitioning from diagnostic to therapeutic, thus blurring the boundaries between imaging and surgery. The goal of many facilities is to integrate these departments into a single service with common support in terms of supplies, equipment and staff. If designed correctly, this concept also can eliminate the all-too-common duplication of pre- and post-operative functions, as well as eliminate the duplication of space, equipment and supply storage. Martin and Shira add that integration of staff with similar skill sets can greatly improve operational efficiencies. The integration concept also can apply to universal procedure rooms that specialists can share, as well as universal prep and recovery areas that can accommodate varying patient volumes throughout the day, as well as minimize patient transfers and reduce the number of supply-distribution points.

While we have seen how the physicality of the OR is evolving for the future, it’s important to note that healthcare professionals are following suit. Bentley points to the trend of surgeons and interventionalists becoming one and the same in the future; in the past, these two groups have performed distinct classes of procedures, while in the present, some surgeons are learning select interventional techniques. In the OR of the future, it may be no surprise to see surgeons familiar with nearly all major interventional procedures and perform them frequently; there may also be the rise of the multi-purpose proceduralist. Bentley says these proceduralists can be co-located on the same floor of a facility, or they can even be housed in the same suite, functioning in what Bentley calls a “multi-purpose sandbox” to accommodate all kinds of disciplines.

No next-generation OR can be planned and executed without buy-in from all stakeholders during the project planning and management process, including surgeons and clinical personnel, administration, the architect, the engineer, the IT department and key vendors, according to collaborators Chris Kantorak, technical consulting manager with BrainLAB, Inc., Brian Hartman, project design manager with STERIS Corporation, and Paul Niehaus, project manager with Philips Healthcare. They say that advanced OR suites require space for technology, personnel and ancillary equipment, and that design input from all user groups must be obtained to ensure an optimal environment for all. More specifically in terms of roles among stakeholders, the architect is responsible for evaluating trends such as fixed-based imaging versus mobile imaging, and OR integration; providing for the expansion to a larger OR footprint ; and understanding the changes in sterility needs when going from an imaging suite to a flexible hybrid OR suite, for example. They must also design into the OR future flexibility, such as empty conduits for information/video routing, blank structural plates and positions to accommodate new equipment in the future. To this end, the equipment manufacturer can help plan for the support of new technologies as they are added. In turn, the vendor plays a key role by helping to maximize functionality and the placement of multiple technologies, offering design expertise with proper sequencing of design needs, and planning for both existing and future technologies or evolving clinical procedures.

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Intrapreneurship

March 16, 2010 by Ann Deters  
Filed under OR Management

I was in a meeting recently and a discussion was proposed as to whom should be the owner of an idea originated inside a hospital. The employee, the institution, both?

It is clear to me that when a physician is hired to do research, the output of this research should belong to the hospital, and the hospital should acknowledge his/her contribution by giving away part of the benefits obtained from it. In this case, the new idea would probably have been unthinkable outside the premises of the hospital, without its infrastructure and assets, so it makes sense.

But what happens if an employee has an idea, let’s say, related to his/her field of experience but not necessarily linked to research? Let’s take this example, if an OR Nurse perceives a need and thinks about a solution to this need while in the operating room, let’s say a new medical device, should the idea belong to the hospital? Well, yes, the idea came to them because they were working at the hospital, but can the hospital claim any ownership over it?

Who is the owner of the idea, then? It may seem a futile discussion, but to me it represents the most important barrier to innovation in our healthcare systems, so it is far from trivial. Sometimes employees don’t engage in innovation because they perceive the ownership issue as unfair. If we want to foster innovation in healthcare, this question needs to have a clear answer. At the end of the day, it all goes down to how the hospital sees healthcare professionals: Do employees work for the hospital, or do they work at the hospital?

Are hospitals really willing to encourage innovation and intrapreneurship inside their premises? Are hospitals willing to create a culture of reward for those entrepreneurs? There is a lot to be gained here: if the hospital succeeds in fostering innovation, it can create a great environment to attract talent, lead, and generate economic value and social impact.

People do respond to incentives. That’s something I learned very early when dealing with innovators and entrepreneurs. Innovation should not trigger a war between the healthcare facility and the employee. It should always be a win-win scenario where both parties can create a lot of value if they cooperate. So, in my opinion this is not about claiming ownership, but about both parties acknowledging how far can they go and how better they will be if they work together, and share the ownership. That’s the answer that makes sense to me.

 

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Gov. Paterson proposes bill to require disclosure from PBM

March 16, 2010 by Ann Deters  
Filed under Eyeworld

New York Governor David A. Paterson has proposed legislation that would increase transparency and promote competition among pharmacy benefit managers (PBMs) by requiring them to disclose additional drug information to health plans, doctors, and patients.
“PBMs perform a valuable service, but there is little oversight of their practices and little competition,” said New York State Health Commissioner Richard Daines, M.D., in the release. “The three largest PBMs—Medco, Caremark, and Express Scripts—manage pharmacy benefits for 200 million Americans, 95% of those who have prescription drug coverage.”

Under Paterson’s bill, PBMs would be required to disclose the actual use of drugs by the health plan’s participants, any conflict of interest that the PBM might have with the health plan, any increase in the net price to the health plan for a covered drug and the reason for the increase, and all contracts entered into by the PBM with a network pharmacy or pharmaceutical manufacturer. The bill would also notify patients and disclose any relevant clinical and financial information to prescribers before a PBM could switch a patient to a more expensive drug, the governor said in the press release.

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Retail clinics on hit-or-miss trajectory

RETAIL HEALTH clinics have embarked on a period of retrenchment, according to a recent analysis by the Deloitte Center for Health Solutions.

There are currently more than 1,100 retail health clinics in the United States offering non-urgent healthcare services in pharmacies and grocery stores.

Between July 2008 and July 2009, the number of operators increased nearly 40%, including the entry of acute care organizations via contractual arrangements with drug store and grocery chains. In addition to the six largest players in the market, more than 50 organizations now operate nearly 140 clinics, claiming 11% of the market.

But just as new players jump in, many established operators are refining.

Clinic openings slowed from an astounding 350% growth rate in 2007 to 30% in 2008. During the first five months of 2009, the market contracted 5%, although the report forecasts modest growth for the year. Nearly 150 clinics closed in 2008. Although more than half of those were associated with smaller retail stores and startups, established operators likewise contracted.

RediClinic, which operated more than 50 sites in 2007, operated just 21 by mid-2009. CVS Caremark’s MinuteClinics, which dominate the market with 451 sites, shed dozens of locations in stores not owned by the company and closed 104 underperforming clinics in the first two quarters of 2009, according to the report.

But don’t read that trend as a retreat or as a direct effect of a recession, says Paul Keckley, executive director of the Deloitte Center for Health Solutions. Keckley says disruptive innovations in healthcare delivery rarely progress on a smooth trajectory.

For the most part, the report notes, retail clinics are modestly profitable and enjoy adequate patient volume. There’s also increasing evidence that insurers are covering their services.

FORMULA FOR GROWTH

The pullback, Keckley says, “has been a decision by the hosts to really focus on refining the model to make it scalable.”

For businesses accustomed to operating in the retail arena, that means refining business models to manage extended hours, liability and additional personnel costs. The hosts likewise need to determine exactly what range of services they’ll provide in a scaled model. Most clinics offer a limited range, such as diagnosing upper respiratory infections and prescribing the appropriate antibiotic. Potential new services could include injection and infusion services, chronic disease management, smoking cessation and direct-to-employer insurance programs.

Keckley expects retail clinics to emerge from this “breather” period with more refined business models tailored to the type of host site—be it a pharmacy, supermarket, big box retailer or employer setting—where the clinic operates. He anticipates a second wave of cautious growth through 2011 followed by more accelerated growth through 2014 with the market topping out at about 4,000 clinics in 2015. Most of the growth, he says, will occur in suburban markets where clinic users would most likely have commercial insurance.

John Bigalke, national managing partner for Deloitte’s health sciences practice, says the clinics could play an important role in providing healthcare for Medicaid recipients as well. As states grapple with providing primary care for the growing Medicaid population, retail health clinics may offer one way they can “continue to uphold their end of the social contract,” he says.

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