Blog | Saturday, May 2, 2015

IMM 15: Tips to 'top of license'

At Saturday's session "The Evolution of New Payment Models: How to Prepare and Prosper as a Small Practice," panelist Edward A. Stehlik, MD, MACP, offered 4 steps for determining whether you and your staff are operating at the top of your respective licenses.

Step 1, he said, is identifying all of the office's tasks and functions. In step 2, create columns for every job description, putting the physician's into the far right column. In step 3, he said, put each task in "right" column, the one farthest to the left where it can be done. In step 4, redesign workflows and staffing based on what you determined in steps 1 through 3.

Dr. Stehlik, whose 2-physician practice in Tonawanda, N.Y., is part of an accountable care organization and high-performing health system, said that the goal of the exercise is to put as few items into the far right column as possible. 

The question everyone asks after this exercise, he noted, is "Can I afford higher staffing ratios to practice at the top of my license?" He gave the hypothetical example of a solo physician practice where the physician worked a 70-hour work week and netted $180,000 dollars per year. A top-of-license analysis found that 30% of the practice's activities were physician-only, 40% were activities the nurse practitioner could do as well, 20% were activities the RN/LPN could do as well, and 10% were activities the secretary could do as well.

If you took over this practice and maintained the status quo, you would hire a physician and pay him or her $85/hour or $265,000 per year, for a net loss of $85,000, and would have no growth capacity, Dr. Stehlik said. However, if you hired a team where all members are practicing at the top of their licenses, you would be paying:

  • an MD or a DO $85/hour times 18 hours weekly, or $79,560;
  • an NP $40/hour times 24 hours weekly, or $49,920;
  • an RN $20/hour times 12 hours weekly, or $13,728; and
  • a secretary $14/hour times 6 hours weekly, or $4,680.
The cost would be $147,888, saving $112,000, for a net profit of $32,112, Dr. Stehlik noted. Another bonus would be a marked increase in capacity, he said, because the physician would now be working 18 hours per week instead of 70.