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1 Oncology Economics 101 Teri U. Guidi, MBA, FAAMA President & CEO Oncology Management Consulting Group.

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Presentation on theme: "1 Oncology Economics 101 Teri U. Guidi, MBA, FAAMA President & CEO Oncology Management Consulting Group."— Presentation transcript:

1 1 Oncology Economics 101 Teri U. Guidi, MBA, FAAMA President & CEO Oncology Management Consulting Group

2 2 What is Benchmarking? A tool/process to compare your practice/program with regional or national standards and/or with itself, and to evaluate performance over time 2

3 3 Creating Benchmarks Benchmarks and gauges are created using objective measurable data elements to describe “something per something” Work Factor Capacity Factor 3

4 4 Creating Benchmarks The Work Factor is generally a measure of work production and is measured in terms of –Procedures delivered –Revenue earned –Cost incurred The Capacity Factor is either a measure of capacity to produce clinical work or the time necessary to produce units of work –Generally measured in resource terms, i.e. full time equivalent (FTE) positions or infusion chairs 4

5 5 Why Benchmark? To improve productivity and performance –Discover potential work flow and/or staffing efficiencies Lower the cost of operations –Better inventory control –Improve patient scheduling –Streamline work flow from clinic to billing office To provide more time for clinicians to spend on patient care 5

6 6 Benchmarking Use measurement and comparison to improve productivity and performance Make it a priority –Decide what’s important for your practice/program Works best when –The practice/program has an accepted set of strategic objectives –The practice/hospital supports sharing of information and decision making –The practice/hospital uses data-driven decision-marking processes 6

7 7 Benchmarking Benchmarking is about both identifying the right questions and getting answers Be strategic – don’t measure something just because it is measurable Identify –What you will measure –How frequently you will measure –How you will present the findings and to whom 7

8 8 Benchmarks & Gauges Benchmarks –Data points for periodic checkups –They measure the direction of your overall business; use them annually or semi-annually Gauges –Use for regular monitoring and review –They measure the effect of changes you make in your operations; use them quarterly to keep on track 8

9 ph 215.766.1280 9 Sample Benchmarks –New patients / FTE physician –Total FTE staff / FTE physician or chemo chair –Total revenue / year or new patient –Medical revenue / FTE billing staff –Tasks / paid productive hour Sample Gauges –Days in A/R –Drug expense / month –Revenue collected / month Things to Measure

10 10 Benchmarks & Gauges Some metrics can be both benchmarks and gauges –Drug cost / FTE physician or patient group –Drug margin / FTE physician or treatment –Drug margin / Drug cost –Physician services revenue / FTE physician 10

11 11 How Do You Measure? Informal benchmarking –Conversations at meetings, visits with colleagues, listservs (AOHA, ACCC, others) More formal –Find and use a standard Oncology Metrics National Practice Benchmark Oncology Circle MGMA’s Cost survey State society or national organization surveys A benchmarking collaborative or membership Oncology publications (JOP, OBR, HONI, ACCC) Most important –Benchmark your practice/program against itself over time 11

12 12 Practice Tools Procedure Productivity Report –From the practice management system –Use for virtually all productivity measures CPT codes Units of service Collected revenue Financial reports –Income, expenses, cost of drugs, etc. HR records –Full time equivalent (FTE) positions 12

13 13 Procedure Productivity Report Most benchmarking data comes from the practice management system All practice management systems produce some type of procedure productivity report (PPR) –This report shows the CPT codes the practice has billed for a specific time period –Most practices generate this report monthly and can produce the report for the practice as a whole as well as for individual providers and/or locations –Many vendors can also develop custom reports Caution: this can be very costly 13

14 14 Procedure Productivity Report Many practice management systems default to producing units and billed charges –You may need to adjust the standard options to get more meaningful data –If possible, report on total units and revenue collected, not billed charges –For most analysis, you only need the summary for the entire practice and do not need individual provider or location details One exception is physician/provider productivity analysis 14

15 15 Procedure Productivity Report Use your PPR to find the number of units billed and revenue collected for things like –E & M services including the number of new patients –Drug administration services –Volume and revenue from drugs –Imaging services –Total revenue, all services 15

16 16 Working with the PPR Using data in spreadsheet format, group CPT codes into standard categories –Provider services (E & M codes) –Pharmacy services (J codes and others) –Infusion services (drug administration codes) –Laboratory services –Imaging services (if applicable) 16

17 17 Hospital Tools Procedure Productivity Report –From the billing system –Use for virtually all volume measures CPT codes Units of service Financial reports –Income, expenses, cost of drugs, etc. HR records –Full time equivalent (FTE) positions Tumor registry –Case counts 17

18 18 Limitations for Hospitals Too difficult to gather and calculate internally External options may: –Be inpatient and outpatient combined –Be general rather than specific to oncology –Be RVU based –Definitions are not always clear What exactly is a “TWU?” What counts as a “procedure?” What is “FTE?” What is included in a “service line?” –Method of creating the benchmark is not always known Formal survey? Informal survey? Data submission?

19 19 Common Frustrations Once and done Calculating one’s own performance in the same terms as the benchmark Often expressed as “per adjusted admission” or “per adjusted patient day” Often uses DRGs to sort data Complicated process All I want to know is…

20 20 Sources for Hospitals Solucient Action OI –Across the hospital –Fed by intense annual survey completion and automated data submission from other departments –Intended for use each pay period –Focus on staffing budget performance

21 21 Sources for Hospital Oncology Oncology Roundtable –Once and done –Fed by interviews and/or solicited data –Chosen to support the Roundtable’s annual agenda –Sometimes unclear “n” –Member must calculate own performance to compare –Focus varies

22 22 Sources for Hospital Oncology The Oncology Business Institute –New in 2011 –Oncology specific and by oncology experts –Infusion, radiation, registry, support services –Fed by simple annual survey and automated data submission from other departments –Ensures good data with start up coding and billing audit tool –Calculates member’s performance and compares to others –Focus on staffing, volumes, financials

23 23 Questions? Teri U. Guidi, MBA, FAAMA President & CEO, Oncology Management Consulting Group 215-766-1280

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