Category: Industry Updates

28 Feb 2019

11 Ways to grow gastroenterology practices through ancillary services

Reduced insurance reimbursements continue to create pressure on medical practices, particularly gastroenterology (GI) – a specialty that I’m most familiar with. Ancillary services offer a way to buffer a practice from financial pressure.

Before considering ancillary services, it’s important to streamline billing and technology at your practice. Efficient billing maximizes reimbursements. Better technology-driven processes minimize waste and improve efficiency.

When you operate an efficient practice, you’ll create savings (or increases) in revenues that can be utilized towards starting ancillary services. Below are 11 ancillary services for gastroenterology practices to consider.

What exactly to offer depends on these factors:

• the size of your practice
• patient needs
• availability of space and staff
• ability to invest or take a loan
• alignment with practice philosophy of care
• geographical concentration of your services
• competitive dynamics with local hospitals
• inclination to partner with an outside company
• regulatory restrictions in your state
• insurance coverage

  1. Move procedures from the hospital to your ASC. Building an ambulatory surgery center (ASC) requires time and effort. However, an ASC has the potential to significantly increase revenues through facility fees that would otherwise go to the hospital. Further, it’ll result in better efficiency through common technology and more coordinated care for patients. There are companies that partner with GI physicians to start ASCs.
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  3. Start a pathology lab. Gastroenterology groups generate a variety of lab samples. Insourcing the technical component (TC), professional component (PC) or both will add significant revenue streams. Note that insurances do not easily go in-network with most new labs. To maximize reimbursements, you’ll need to have the ability to conduct ongoing negotiations on out-of-network claims with third-party administrators and insurances.
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  5. Offer infusion and/or other biologics. Drugs for inflammatory bowel disease are expensive with small margins. You can’t afford to receive any denials from insurances because you already pay upfront to buy these drugs. However, if billing is rigorous on all claims and there’s suitable patient volume (e.g. patients of Crohn’s disease), then biologics can be a profitable endeavor.
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  7. Start imaging services. If there’s enough need for imaging in the area and a large patient volume, a practice could consider investing in CT and ultrasound equipment. This creates a new channel of revenues for the practice.
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  9. Offer hemorrhoid banding. One gastroenterology practice we know improved its overall patient satisfaction levels when it began offering this procedure. It’s relatively simple to offer this procedure and provides faster relief to patients. It can be performed both in the ASC and in an office setting with promising reimbursement levels.
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  11. Build anesthesia partnerships. Several gastroenterology practices offer anesthesia as an ancillary service at the ASC with great success. It reduces pain for patients during procedures and therefore improves patient satisfaction. Again, anesthesia claims might require separate tracking and negotiation if fee schedules aren’t agreed upon. Note: the Centers for Medicare and Medicaid (CMS) recently made coding changes in anesthesia resulting in a reimbursement drop.
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  13. Earn from clinical research. If the practice is academically inclined, you can develop a clinical trials program to evaluate new drugs, medical devices or tests. This can add a new revenue stream. For example, gastroenterology practices run trials for ulcerative colitis, irritable bowel syndrome, opioid-induced constipation and so on. It’s important to note that comprehensive research programs have inherent risk and take longterm commitment from doctors to create value.
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  15. Add nutrition and weight management programs. Unlike some other ancillary services, adding a nutrition program requires less upfront investment. These income streams sometimes work better with a cash payment model. Focusing on diets specific to digestive disorders (e.g. anti reflux diet, FODMAP diet, gastroparesis diet etc.) can help patients manage their conditions better. Some practices offer procedures such as Endoscopic Sleeve Gastroplasty (ESG) and gastric bypass to help patients with weight management.
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  17. Dispense medicines at your practice. You can consider partnering with an in-house dispensing company and dispensing your top 20 drugs at the office. It saves patients a trip to the pharmacy. Note that laws in some states strictly prohibit drug dispensing at doctors’ offices. Some practices also sell nutrition supplements, vitamins and probiotics that aid in digestive care.
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  19. Add advanced GI procedures. Procedures such as Peroral Endoscopic Myotomy (POEM) and Endoscopic submucosal dissection (ESD) are advancing the field of endoscopy. Smart Pill and small bowel capsule are others to consider. One of the practices we work with has a partner who focuses mainly on advanced gastroenterology procedures most of the time. Billing and coding is complicated and requires continuous attention to get paid correctly from insurance companies. Adding advanced procedures help practices be recognized as leading the field.
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  21. Specialized centers of care. Some practices offer specialized centers of expertise for conditions such as Crohn’s Disease, combining endoscopic services, biopsy reviews, infusion therapy, diet, and onsite lab testing. Another example is a liver center to manage liver disease and transplants. More advanced GI groups can consider starting centers of care based on patient needs

 

Bonus: Offer genetic counseling and diagnostic testing for gastroenterology. More and more patients are getting a genetic test and seeking their doctor’s counsel. While the areas of billing and coding for genomics is still evolving, you can expect this area to grow in demand.

(Aside: Blueprint Genetics offers the following panels for GI: cholestatis, congenital diarrhea, congenital hepatic fibrosis, gastrointestinal atresia, pancreatitis and so on).

Outside of direct contribution to revenues, ancillary services have the benefit of helping patients more comprehensively, improving satisfaction and even attracting new doctors to work at your practice.

These services enhance the practice’s reputation in the community. They create opportunities to serve new patients (and their families) who might’ve otherwise not known about your practice.

References:

  1. GI Practices: Don’t Overlook Ancillary Services For Revenue Growth, Expert Roundtable by Gastroenterology & Endoscopy News.
  2. 9 Ancillary Services That Can Boost Practice Revenue, Medscape.

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Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

This article is part of an upcoming 50+ page ebook, Navigating the Next Wave: Private Equity in Gastroenterology (releasing on March 6th, 2019). Click here to receive it first.

Image Credit: Singkham from Pexels

07 Feb 2019

Understanding 6 trends shaping healthcare through one specialty: gastroenterology

If you throw a pebble today, it’s likely to land on an article that talks about how artificial intelligence and its brother machine learning are changing healthcare.

Yes, I get it broadly. But I was curious to explore how exactly healthcare’s trends are shaping any one medical specialty. I chose gastroenterology (GI) because I’m most familiar with the space. And here’s what I found.

Trend #1: Manipulating bacteria in your stomach (Microbiome)

We are still a long way from fully understanding the microbiome (the microorganisms in our body). However, fecal transplants (it’s what you think – restoring bacteria by infusing stool of a healthy donor) have shown promising results. Especially for inflammatory conditions such as C. Diff Colitis and autoimmune conditions such as inflammatory bowel disease.

The human microbiome industry is expected to be worth $3.2B by 2024. The company, Commense develops approaches to “guide the priming, seeding, and maintaining of the microbiome in infants and children”. Openbiome is a non-profit stoolbank promoting safe access to fecal transplants (by the way, they offer $40/session).

Just as with genetic editing, the future may offer the ability programmatically manipulate a patient’s microbiome to result in better health.

Refer: Is The Future Of Microbiome Research Already Here?

Trend #2: Genetic editing for stomach cancer (Genomics)

In 2018, a Chinese scientist claimed that he produced the world’s first CRISPR babies (gene-edited ones). There are several companies (e.g. Myriad Genetics) working to tackle specific conditions such as beta-thelassemia (blood disorder).

GI isn’t too far. Research suggests that CRISPR-Cas9 technology can be used to genetically modify organoids. To understand GI diseases such as pancreatic cancer, gastric cancer better.

Refer: Modeling Human Digestive Diseases With CRISPR-Cas9–Modified Organoids

Trend #3: Computer vision to detect polyps (AI)

Detecting adenomas (benign tumors) is the holy grail of colonoscopies that GI doctors routinely perform. With the help of AI, doctors could potential detect adenomas with greater accuracy.

As an alternative to traditional colonoscopy, video capsule enteroscopy offers videos via a capsule that traverses through a patient’s digestive tract. 50,000 images are captured over a period of 8-72 hours. AI can ‘view’ these images and videos and highlight polyps (small growths) that the human eye can miss.

Refer: Development and validation of a deep-learning algorithm for the detection of polyps during colonoscopy (Nature)

Trend #4: Fitbit for the abdomen (Wearables)

Monitoring electrical activity of the stomach has been in the works. The stomach sensor syncs with an app to send signals of gastrointestinal events (think bowel moments).

Startup GI Logic developed a biosensor to listen to the abdomen and classify the signals via Abstats. The Wearable device suggests a new way to monitor patients to before/after GI procedures.

Refer: Tummy Tech Tracks Electrical Activity for Signs of Indigestion (IEEE Spectrum)

Trend #5: Minimally invasive GI procedures (Robotics)

Endoscopic procedures such as Peroral Endoscopic Myotomy (called POEM, to treat achalasia), Natural orifice transluminal endoscopic surgery (called NOTES, to remove gallbladder) are on the rise. They offer benefits of faster recovery, less pain, potential for scarless procedures and so on.

A variety of devices, instruments, scopes, imaging techniques are making these advanced endoscopic procedures possible.

Refer: Robotics for Natural Orifice Transluminal Endoscopic Surgery: A Review

Trend #6: Customizing accessories to remove difficult lesions (3D printing)

Not limiting itself to printing models of damaged parts, 3D printing aims to print tissues of organs themselves.

Closer to the present, gastroenterologists are experimenting with 3D printing custom endoscopic caps (accessories that attach to a scope) to remove difficult-to-target lesions in procedures such as endoscopic mucosal resection (EMR). EMR is yet another procedure to remove cancerous lesions from the stomach.

Refer: Mo1520 New Technique for GI Endoscopy Using 3D Printing (GIE Gastrointestinal Endoscopy)

Connecting the dots: So what?

The science part of healthcare has always progressed rapidly. Making it easier for patients and doctors alike. There’s nothing really new about that.

What’s new this time is this: the pace of change outside of healthcare is changing.

AI. 3D printing. Robotics. Sensors. Programmatic tools to edit genes.

These trends are converging. Creating new combinations.

So what?

Majority of the GI space circles around traditional procedures such as colonoscopy. Patients have abdominal pain or are at risk of colon cancer. GI doctors perform colonoscopies. Bill for them. Insurances reimburse. Even software is developed around these themes.

But this everyday model for GI is changing. Not exactly because of changes in GI. Not even limited to changes within healthcare.

But because of changes outside of healthcare.

And when you delve into one specialty, it has the potential to tell you the story of all others.

That’s exactly why it’s important to connect these dots.

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Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

Image Credit: Pixabay

22 Jan 2019

Four insights from healthcare’s imminent future

Instead of driving on the highway, let’s imagine you drove upwards from wherever you are…you’ll reach space in about an hour.

On your way up, you’ll begin to see everything differently. Cities, roads and trees slowly blur out to make way for a new kind of reality. Converging. Diverging. Both at the same time.

What appears dissimilar on the ground (trees and shrubs) will appear similar (green). What unites on the ground (mountains and rivers of a country) will appear cleanly fragmented (land and water).

Observing healthcare from space. Playing the game with healthcare…

When you zoom out, you’ll see the industry differently. You’ll see it in tandem with other changes that are changing it.

You’ll see how quickly it’s changing. And where. You might even discover why.

View #1: A smaller, similar, consolidated world

In 2018, 715 private equity deals created a value of $103.72 billion. It’s a new record for healthcare. One big driver for this frenzied deal-making is targeted consolidation. Private equity is zooming out to connect disparate dots to create newer, larger formations. They are creating a forest out of the trees.

I’m seeing this unfold live in the space that we largely serve (gastroenterology).

View #2: Unrelenting, unstoppable changes driven by technology

If your job hasn’t been touched by AI, it’ll surely soon be. Many millions in healthcare will be displaced, especially those dealing with routine, repeatable, pattern-oriented work. Not just transactional activities like billing but also medicine itself.

In 2018, FDA-approved watches began reading EKGs and using that data to detectconditions such as hyperkalemia (high potassium). In the future, algorithms would allow “self-driving” in procedures such as colonoscopy.

View #3: Societal aspirations of living healthier, stronger, sexier and longer 

What we want out of our bodies is no secret. If we are sick, we want to be healthy. If we are healthy, we want to be strong. If we are healthy and strong, we want to be sexy. If we are healthy, strong, and sexy, we want our bodies to last forever.

Biotechnology research is keen to make these desires possible. In 2018, a Chinese scientist claimed he’s produced the world’s first CRISPR babies (gene-edited ones).

Read: Yuval Noah Harari’s writing offers an in depth analysis of where such developments might lead to in the future. His latest book deals with the present.

View #4: Data dominance 

Amazon, Apple, Google, Microsoft have all made big healthcare moves in 2018. Amazon bought an online pharmacy, launched its own healthcare venture and created a medical AI cloud service. Apple created an app to detect irregular heart beats. By tinkering body’s information, Google plans on extending life.

You’d note that all of them are data-hungry, technology Goliaths. With data, they will learn how to do healthcare even better by connecting disparate dots (e.g. Alexa detecting that you have a cold, Amazon suggesting cold meds).

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Let’s connect the dots

When you connect these dots, you’ll observe some straightforward maps.

  1. The healthcare industry will consolidate, corporatize and be more and more unified.
  2. Reliance on data and technology will limit us from functioning outside the grid. No more doctors without computers or computers without doctors.
  3. The industry will go through many phases of frustration and confusion before the dust settles. And then it’ll disrupt all over again because of further advancements.
  4. Scope of healthcare will range widely. From fixing sickness to designing babies.
  5. Our healthcare decisions will be guided (and possibly manipulated) by countless algorithms and people who control them.

 

What do we do?

At some point this year, I realized that we are in the middle of a massive wave. And there’s no stopping it.

Healthcare is changing for good.

No one can tell us where this wave will take us. So, what do we do?

Instead of worrying about the wave or trying to escape it, we must choose to shape what’s to follow. Not with newer technological widgets. But with our moral and ethical compasses. That we are already genetically blessed with.

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Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

Image Credit: Ky0n Cheng @Flickr

31 Dec 2018

Uber and Lyft ride into healthcare. What to expect (and what not to)

Here’s the premise.

36 million American patients miss their medical appointments. If only they had a ride waiting outside, they’d make it to the doctor’s office.

Uber and Lyft have both made announcements in healthcare this month. And why not? In recent months, Apple, Amazon, Google, Berkshire Hathaway have all plugged into healthcare.

Here are a few headlines that recap this ride-sharing story.

Uber wants your doctor to call you a ride to your next checkup

Know the Risks When Using Uber Health, Lyft

Whoa, Uber’s New Service Will Drive You to the Doctor for Free

New BCBS Institute working with Lyft, CVS, Walgreens to tackle social determinants

Lyft announces integration with Allscripts EHR system, allowing 180,000 doctors to hail rides for patients

Five Things to Know About the Uber and Lyft Provider Partnerships

Basically, the doctor’s office or the hospital would hail a ride. A patient would hop in, possibly share the ride with other patients. Helping providers not lose money in missed appointments ($150 billion per year). Helping patients not fall sicker by skipping those appointments. Further, sick patients end up in acute care burdening the system more and more.

I get the logic.

Just that I see a few bugs in it. More so because we are practically in the trenches with doctors everyday.

Why patients don’t show up (really)

JAMA just published findings from a clinical trial of 786 adults with Medicaid. This is what they found:

“Offering a rideshare-based transportation service may not decrease missed primary care appointments.”

The Annals of Family Medicine published this study in 2004. Why We Don’t Come: Patient Perceptions on No-Shows. Before Uber or Lyft existed.

Patient “no-shows” is a big problem for doctors. But you rarely hear that they didn’t show up because they couldn’t get a ride.

The 3 big reasons that the Annals of Family Medicine study found were:

  • Emotions
  • Perceived disrespect
  • Not understanding the scheduling system

Here’s quoting from the study:

“Appointment making among these participants was driven by immediate symptoms and a desire for self-care. At the same time, many of these participants experienced anticipatory fear and anxiety about both procedures and bad news. Participants did not feel obligated to keep a scheduled appointment in part because they felt disrespected by the health care system. The effect of this feeling was compounded by participants’ lack of understanding of the scheduling system.”

This does sound right.

There’s another study, Why do patients not keep their appointments? Prospective study in a gastroenterology outpatient clinic. The findings:

“Forgot to attend or to cancel (30%); no reason (26%); clerical errors (10%); felt better (8%), fearful of being seen by junior doctor (3%); inpatient in another hospital (3%); miscellaneous other (20%). 13 (27%) of the review patients had not kept one or more previous appointments.”

In our experience, this sounds perfectly reasonable. More than a quarter of them cited “no reason”!

There are also unexpressed financial reasons. By showing up, patients need to face up to deductibles and co-pays. It’s not always that they want to pay up.

Several articles talked about how the rides would help lower income populations.

The reality is doctors struggle to get paid by Medicaid (insurance that covers lower income). They never know if they’d get paid for the service they are about to provide. They do it anyways.

It seems unreasonable to expect that over-stretched doctors and staff would now hail a ride for patients via the EHR.

EVEN IF we do call Uber from the EHR

I was recently in a meeting at a large hospital in the east coast of US. It’s easily considered one of the world’s best. The doctors don’t really have a problem patients showing up. It’s what happens after they do.

Here’s where they are stuck.

They see a patient. Order a test. Or schedule a procedure. The billing office calls the insurance to get “prior authorization” for the procedure. Insurances make it difficult to provide prior auths. The game goes on for several days. The billing office is overwhelmed by the many prior auth requests. Finally after 30+ days (on average), the patient ends up on the procedure table. Getting the care she rode in for.

Now imagine in the above everyday scenario, the doctor or her staff does call Uber for their patient. Possibly via their EHR. Of course, the integration is cool (for tech folks, not necessarily for doctors). It won’t necessarily help the patient get care faster. It won’t help doctors get paid for that care or service.

In fact, what it is is this. It’s convenient. Like ordering food online. It may not really solve our clinical or economic burden in healthcare. It adds a layer of easy. And that’s a good thing too.

May be we should say just that.

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Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

Image Credit: Pexels

31 Dec 2018

4 Takeaways from Practice Fusion EHR’s $100M sale to Allscripts

Two years ago, Practice Fusion, an electronics health record company was rumored to be valued at more than a billion dollars.

Last month, the company sold for a fire sale price of $100 million.

Having raised $157 million, you can imagine that most people didn’t make any money. Apparently parachute deals help senior executives and the board make a few million (including $2million for the company lawyer).

But nothing really for employees who stayed on and ordinary shareholders. Few who exercised options earlier will even lose money via taxes.

Read: Employees at Practice Fusion expected IPO riches, but got nothing as execs pocketed millions (CNBC)

Apparently, the company has been looking for a buyer for 2+ years. And got offers ranging from $50-$250M. Allscripts, an EHR giant that recently acquired McKesson’s Health IT portfolio, initially offered $250M. But got nervous after a Department of Justice investigation last year (of another company – eClinicalworks which settled with prosecutors for $155million).

Read: Allscripts offered to buy Practice Fusion for $250M. A DOJ investigation changed everything

That’s the story. What does it all mean?

The evolving healthcare industry landscape will show what it eventually means. But here are a few takeaways.

1) A nod to the cloud

The EHR world’s market leaders are Cerner, Epic and Allscripts. All of them are client-server based. Epic is based on 52-year old MUMPS technology.

In a world of client-server dominance, Allscripts acquisition of Practice Fusion is a nod to the cloud. That’s clearly where the industry is going. Or, will be compelled to go.

Here’s what the company’s president Rick Poulton said: “Plus, Practice Fusion’s affordable EHR technology supports traditionally hard-to-reach independent physician practices, and its cloud-based infrastructure aligns with Allscripts forward vision for solution delivery.”

2) It’s tough to make ‘free’ a sustainable business model in healthcare

Practice Fusion started on the premise of offering a free EHR to physicians. And in turn, monetizing de-identified healthcare data. Supported by ads etc.

Investors bought into it. Including Peter Thiel (he wrote the founder a check of $1million in 2011 before leading that round).

Then the valuation game caught up with itself. Investors put in money assuming someone else is going to put in at a higher valuation. Later. But when the company isn’t making real cash, the valuation cycle eventually catches up.

Someone says, I can’t agree to that valuation – it makes no sense. And then everything goes down-hill. Down rounds begin. Terms change. Dilution for earlier investors happens. People get fired. CEOs get ousted.

The problem with healthcare is that regardless of how fast the world moves, the industry moves at its own pace. Like life and death, the industry whiffs of a certain permanence.

You can’t do a Google or Facebook here by offering free service and making money via ads or data. At least, not yet.

3) The landscape is freezing

Industry changes happen like lakes freezing and unfreezing.

Rules of the game shrink. Consolidate. Big boys dominate. They make it harder for each other and others to change rules.

In US, Meaningful Use incentive dollars that spurred the industry have dried up. Tech giants like Apple have made healthcare announcements (“effortless solution to bring health records to iPhone”).

Companies like Allscripts bought McKesson (to go after smaller markets), now Practice Fusion. They’ll keep looking for more deals to spread their reach.

Tired of their healthcare costs, Amazon, Berkshire Hathaway, and J.P. Morgan announced that they are teaming up to disrupt the industry.

When industry landscapes freeze, it’ll take time before it melts again. But because it’s healthcare, the freezing – while it’s definitely begun – will happen slowly, slowly.

This leaves doors open for specialty and niche opportunities that are small for the big boys to focus on. That means there’s no point building a new plain vanilla EHR. But there’ll be strong needs for EHRs and products that go a mile deep in specific areas. That naturally plug into the new rules that are bubbling to the surface.

4) Practice Fusion’s real asset is its data. But no one’s talking about it

Practice Fusion has a dataset of 81 million patient records. Imagine applying AI on that data. Creating newer products for the same target group based on their data.

It may be tough for Allscripts because market commands their vision to focus on getting bigger faster. Not develop cool technology tools.

Practice Fusion’s idea was a good one. To build a company around data. But their business couldn’t sustain itself until that point where the industry is mature enough to make that data useful.

What’s the moral of the story?

Practice Fusion’s founder Ryan Howard moved on to build a heart-activity wearable device called iBeat (after differences with the board).

Is there a lesson here? That the healthcare industry is trying to tell us. Perhaps it’s this.

It’ll be slow. You can disrupt but not quickly or suddenly. You’ll need stable, sustainable business models. The boring stuff makes money. Regulations can disrupt your life. And yes, it’ll all be up in the cloud. Eventually.

 

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Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

Image Credit: Pixabay

13 Dec 2018

Healthcare: Disruption at a scale we haven’t seen before

Just like you, I’m trying to make sense of the world around me. But there are no templates for the bridge that healthcare’s building for its future.

All we can do is listen to weak signals and amplify them.

Last week, CVS finally bought Aetna for $69 billion (must we say almost bought because a judge is still questioning them). I spoke to someone closely familiar with the deal. He called it “vertical stacking” – to expand what CVS customers can get – from drugs to MinuteClinic consultations to now insurance.

But it seems more like CVS disrupting itself before Amazon does. Earlier in the year, Amazon bought PillPack, an online pharmacy (CVS and others lost $11 billion in market value on the day of the announcement).

Market is rife with speculation that Amazon is going to be biggest company in healthcare (fancy signing up for Amazon Prime Health?).

After such buzz, do you think other insurances or pharmacies will stay quiet? In the M&A world, more begets more.

In fact, the entire healthcare industry is in an M&A frenzy. As of June 2018, healthcare was only third in line (#1 is Energy, #2 is Media) in terms of size of deals. See below.

Zooming in and out. From the forest to the trees

Healthcare is so big ($8.7 trillion by 2020) that it nurtures mini-industries within itself. Like the space I’m most familiar with: gastroenterology, a medical specialty in high demand.

Long time ago, gastroenterologists (GIs) ran smaller solo or group practices. Despite the myriad challenges of running a medical business, doctors enjoyed the independence that private practices offered.

But over the years, everything got too complicated. From insurance reimbursements to regulatory compliance to even patient behavior. It just became tougher to stand alone. (Younger physicians hardly go solo today. Most join groups or hospitals.)

Smaller groups became bigger. Demand for colonoscopies (the main procedure that GIs perform) fueled the growth of free-standing ambulatory surgery centers.

Hospitals sensed the opportunity. And began luring gastroenterologists to gain access to their patients and bring home revenues from GI procedures. Under the thumbs of hospital administration doctors lost their independence. It didn’t help that they were forced to use monolithic hospital EHRs.

Well, the market’s now shifting again.

Private equity companies are fueling consolidation of GI groups. By providing capital for recruiting other groups, buying new medical equipment, removing administrative burdens and inefficiencies, streamlining technology and so on. They are courting doctors by offering them independence in a way that hospitals can’t.

Small groups (e.g. 4-8 doctors) and mid-size groups (e.g. 8-20 doctors) are merging to become large groups (e.g. 25-50+). Large groups are becoming super-sized groups (80-200+ gastroenterologists).

And the super groups? I learnt that the pipeline goes all the way to 1,000 GIs operating under a single entity.

Private equity (PE) companies refer to this as a “roll up” strategy. These roll ups will create a different kind of market dynamic that doesn’t exist today. A tailwind of ancillary opportunities (imaging, pathology labs, nutrition counseling, administrative consolidation, EHR and billing systems unification, analytics and so on).

There are approximately 12,000 GIs in the US today. Present consolidation trends indicate that these deals would cover at least half that number over the next few years. The rest might continue to operate like they do today – finding ways to not buckle under market pressure.

Depending on where they are in their career, gastroenterologists welcome this trend or are cynical about it. Older doctors see it as a way to capitalize on what they’ve built so far. Younger doctors see it as selling out too soon. And then there are doctors who are more entrepreneurial – they see it as a way to shape what’s to follow.

Gastroenterology offers an insightful window into other specialties such as dermatology (booming these days), orthopedics, ophthalmology and others.

Larger private equity companies will eventually want to combine super groups across specialties and regions. If that makes no sense, think “vertical stacking” that my friend said as a reason for the CVS and Aetna merger. Or even think of Kaiser Permanante – a non-profit with 22,000 doctors on staff – with a PE twist.

Welcome to the new world!

Where do we go from here?

Just the other day, a doctor reached out to us (after reading our monthly newsletter). Saying it’s confusing out there. He runs a solo private practice but owns a surgery center with other doctors.

He hates all these things that he’s had to do in order to stay in practice. Like EHRs and MACRA, he said. So he stopped doing those things. But worries that he can’t keep ignoring them forever. It’ll catch up with him and then it’ll be too late.

In the end, he wondered if he should find a way to merge with somebody. But then his operations weren’t so clean. Wouldn’t PE investors want a cleaner practice?

And so the conversation went.

The sooner you accept the new reality, the better positioned you’ll be to shape that reality. Before it begins to shape you.

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Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

Image Credit: Álvaro Reguly @ Flickr (https://www.flickr.com/photos/alvaroreguly)

17 May 2018

Doc = Drop Out Club? 5 baffling things in healthcare

Say we met 10 years ago during the early stages of our business. And you asked me this: would healthcare delivery be more complicated in the future?

I would’ve shaken my head animatedly and said “no, it would be simpler!”.

I would’ve shown you technology trends. And told you that healthcare transactions will indeed become more automated, much simpler. Repeatable administrative tasks would be tech-enabled, algorithm driven.

As a company, we started life in billing claims for doctors. Back then I was quite sure billing would be way less complicated in the future. Insurances and hospitals would make sure that happens.

In fact, I would often urge our people to learn and upgrade their skills faster because their jobs would disappear soon.

I was wrong. Actually, very wrong.

I would’ve never guessed any of these things that baffle me about our industry today.

Baffling thing #1: It would cost more for doctors to make the same money

We never used to spend so much time obtaining prior authorizations (PA) before doctors perform procedures. Now we do. On an average, doctors today spend 16.4 hours per week or 853 hours every year on prior authorizations. Average wait time of response is 1-2 days.

I recently visited a hospital that houses some of the world’s best doctors. They can’t handle the PA burden. Their gastroenterology division spends 30+ days on average. Imagine what that means for a patient who urgently needs a procedure.

While PAs represent a bulk of the burden, there are many costs that add up. What’s worse is doctors are left with no choice but to meet these expenses. If they don’t, they don’t get paid.

Baffling thing #2: Healthcare law would get more and more complicated

On Jan 1st, 2017, a new law to track physician performance went into first gear. It’s called Medicare Access and CHIP Reauthorization Act of 2015 (or simply MACRA).

MACRA adds to the long list of regulatory mandates that practices already need to comply with. The law is applicable to roughly 55 million clinicians. It’s 2,398 pages long. Check it out here.

MACRA measures are converted to a point-based system. Using points, doctors are compared to other doctors. A score is derived based on what they could’ve done vs what they did. That finally determines how much someone makes.

We find doctors struggling to interpret the law, leave alone moving in the direction of incorporating the mandates.

Baffling thing #3: Technology, intended to simplify life, would end up making doctors miserable

Technology in the form of poorly designed EHRs adds to the burden of practicing medicine today. Some doctors feel it hurts their relationship with their patients. Some quit medicine altogether unable to deal with the technology.

My company recently completed the third stage of our Meaningful Use certification (now bucketed under the MACRA law) for our own EHR. It took our team us 6 weeks plus. The first stage took us a week. The second possibly 2-3 weeks. It’s reflective of how complicated the qualifying criteria have become.

Mandates require that doctors use certified technology to document their cases. If they don’t, they’ll lose money in the future.

Baffling thing #4: Coding would be so complicated. Creating another avenue for insurances to delay payments

When ICD-10 arrived, clinical codes exploded to 155,000 from an earlier set of 17,000. Insurances have begun to demand greater specificity for codes that doctors submit.

For example, earlier you’d use 530.11 as ICD-9 code for Reflux esophagitis (a digestive disease). Under ICD-10, you have to get specific and code say K21.0 – Gastro-esophageal reflux disease without esophagitis.

Doctors aren’t used to documenting this way. So specifically. The result is more avenues for insurances to deny or delay claims.

Baffling thing #5: In a world of desperate medical need, many doctors would actually give up medicine

It’s called the “Drop Out Club” – a networking site where doctors counsel one another to leave medicine. Burnout. Lack of enthusiasm. Depression. Long work hours. Increasing burden of bureaucratic tasks.

Read: In “Drop Out Club” Doctors Counsel One Another on Quitting the Field

To become a specialist doctor, you have to spend four years in medical school and nine more years to train under a specialty. Imagine the kind of frustration a doctor must face in order to give it all up.

Our long, messy path to the future

Of course, I’m excited about the future. As a business, we keep developing a service or product to address the problems that we see. We figured that’s the best way to move forward in healthcare. Be more useful by solving problems that our clients face.

But I worry about the kind of long, messy path we keep traversing as an industry. A path that only gets murkier.

If we met today and you asked me the same question. Would healthcare be more complicated in the future?

I’d still shake my head and say “no, it’ll be simpler!” I’ll point you to today’s technology trends in artificial intelligence and machine learning. Without question, healthcare delivery will be simpler and more automated.

Of course, I’ve no idea what I’m talking about.

_

Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

 

04 May 2018

How do you get 5 star reviews from patients? Ask them

If you haven’t noticed already the popularity of doctor-review sites is on the rise. Healthgrades has over 3 million listed providers. Another review site Vitals claims to collect over 1.4 billion data points on doctors.

survey found 84% of patients use online reviews to evaluate physicians. 47% of them are willing to go out-of-network for a doctor with more favorable reviews.

Some doctors resist the trend. While some others take advantage of it.

Like Dr. M who seems to engage patients masterfully. Take a look.

Dr. M has over 5 pages of reviews of Vitals with an average rating of a stellar 4.8 on 5. Here’s a sample review.

 

If you took time to read the review, this patient’s problems aren’t “over” but s/he rated the doctor 5 stars.

Without question, Dr. M is a great doctor with sound clinical outcomes. Surely, patients must be treated compassionately. Possibly, the practice is also operationally efficient.

But there’s something more happening here. For patients to make the effort of going online and writing a review.

Making your best patients into powerful brand advocates

In today’s digital world, reviews have the power to significantly boost patient volume. Simply because patients trust other patients.

A high quality patient experience can instantly turn patients into powerful brand advocates.

The secret to making this work is this.

You ASK.

Yes it’s that simple. So obviously simple that I’m sure you wonder if there’s more to it.

But the reality is that it works.

Right after a patient receives great service and care, request a review. You’ll be surprised at the number of responses you’ll receive.

Getting patients to review you online. In 3 simple steps

Here’s everything you need to know.

1. Instruct your front-desk to capture the patient’s email address. Patients will be willing to share their email address if they know that they’ll be receiving their medical records digitally and securely.

2. Remind patients. At the end of the visit, remind patients that you’ll be sharing their medical records by email.

3. Use this email script when you share medical records. Setup your electronic health record (EHR) software to automatically send the following email when you share medical records.

 

The mindset of ASK

Most people (including patients) respond well to a request when asked. Here are 4 strategies that’ll help you and your staff get into the mindset of asking reviews.

1. Provide quality services, actually.

2. Even a few reviews matter. Start small

3. Don’t bribe patients. Feel clean

4. Make patient engagement a team effort.

The world of healthcare is changing. Transforming into a more customer-centric arena. Reviews play a crucial role in engaging patients online. With one review building over the other.

Now, over to you.

_

Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

 

03 May 2018

In healthcare, some thrive. But some struggle to survive

I’m sitting in the waiting area across the endoscopy room of a major hospital. Mindless talkshow TV runs in the background. Patients are waiting. Patiently. Looking up anxiously every now and then from their phones. Towards the reception desk.

It’s a scene I’ve experienced for years while working in healthcare. While waiting for doctors.

But there’s something different in the air now.

Patients like those around me will encounter a doctor who’s excited and enthusiastic. But some will meet another who’s dreading her career.

Healthcare is changing faster than ever before.

It’s just not about technology disruption. There are many forces at play. Change in patient and societal behavior. Challenging finances. Evolving policy. Dichotomy of unmet supply and unmet demand for care.

Why some thrive and some struggle to survive

The doctor I’m about to meet is in the thriving category. He and his colleagues are excited about creating a new field. In endoscopic surgery. Yes, it’s what you think it is. Surgery while inserting a tube into your gut. Complex. New. Innovative.

And just the other day, I was scheduled for a video chat with a group of doctors at another hospital. A couple of days prior to the call, I learnt that the hospital suddenly terminated their contract. It’s possible that they are being replaced by nurse practitioners to save money.

I come across doctors from both ends of the spectrum. Excited on one end. Depressed on the other. Some even leave medicine for good.

How does this happen?

Doctors start making real money only in their mid 30s. After accumulating significant student loans. At that point in their career, they either choose to join private practice or find a job at a hospital.

The problem of being employed

Earlier, more doctors were inclined to go solo by developing their own practice. Newer generations of doctors increasingly want the comfort of a regular pay check and life-style.

However, being employed doesn’t take away from the fact that doctors are fiercely independent. While they are taught to give instructions in residency, they end up taking instructions from hospital administration. On the number of clinical procedures they must perform, the number of patients they must see and so on.

Eventually, they are disillusioned with the system. Medicine’s not what they had signed up for. However, they are stuck because they need the money (think student loan, mortgage, car loan, kids’ college fund etc.).

The problem of private practice

When in private practice, doctors are overwhelmed by the many, many balls that they need to juggle. Often to stay in the same place. They need to worry about getting paid correctly from insurance companies. Hiring and training staff. Getting their clinical codes right. Credentialing themselves with insurance panels. Fighting denials. Guarding themselves from law suits and audits. Interpreting long-winded healthcare laws (like MACRA). Dealing with complex technology.

It’s a tough life to go it alone.

Forgetting to unlearn. And re-learn

Eventually, doctors find a certain area within a specialty where they can make a predictable income. For example, there was a time when cardiologists made money from imaging. Despite an environment of declining cardiology reimbursements, some doctors continue to rely on income from reading EKGs.

Imagine what would they do when technology like AliveCor becomes mainstream. People with heart conditions might wear a personal EKG band. Further, the company recently announced that their technology can accurately interpret atrial fibrillation.

There’s more. Through big data analysis, they can even recognize patterns for hyperkalemia (or higher potassium levels) from the spikes and troughs of EKGs.

It’s all changing too fast.

The entire healthcare industry is in for a massive disruption. The key to ride such a wave is to forget fast. Because if you hang on to the past, you’ll be run over.

Losing meaning and purpose

After working hard to become doctors, many lose their way. There are many challenges that the healthcare industry poses before a doctor gets to simply see her patient. In navigating those challenges, doctors figure out ways to survive. And in surviving, they sometimes forget why they became doctors in the first place.

The relationship with patients becomes a routine, near commercial transaction. Not laced with the purity they had imagined in college. They adapt to circumstances. Medicine becomes a vocation. Not intellectually stimulating or challenging. And they enter a long tunnel of career stagnation. Only to be shaken up rudely by industry changes. Sometimes it’s technology. Sometimes it’s financial. Sometimes it’s regulatory or legal.

*

The other day, I was catching up with a friend on the west coast. She’s not in healthcare. She works at a large company that hasn’t kept up with the many changes in their industry.

I asked, “The bay area seems desperate for talent in machine learning. Why not take up an online course and get up to speed?” She’s those brainy ones. This would be right up her alley.

“Oh, I don’t get time from family, work, and myself,” she said.

“Don’t mind me saying this…but what’ll you do if they start lay-offs?” I asked with concern.

“May be, I’ll take a break from everything and learn stuff. May be like machine learning.”

“Why not do it now? Before that desperate point comes.”

“I don’t know. No time I guess…”

And that’s how it goes. Even in healthcare.

_

Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

 

08 Jan 2018

SPARCS compliance reporting is changing. Here’s what you need to know now

The Statewide Planning and Research Cooperative System (SPARCS) is a comprehensive all payer data reporting system established by the New York State Department Of Health (NYSDOH).

The system is designed to collect patient level details such as patient demographics, diagnoses and treatments and charges for hospital inpatient stays and outpatient (ambulatory surgery, emergency department, and outpatient services) visits.

Facilities in New York are required to report data to SPARCS monthly to demonstrate compliance and avoid penalties.

Current data submission process

Under the current submission process, facilities submit SPARCS compliance data in an electronic, computer readable x12 837R format unique to requirements of the New York State. The data is transmitted to Department of Health’s Health Commerce System (HCS), where it is analyzed and response files are generated.

Revised data submission process

With the goal of standardizing data, the New York State Department Of Health (NYSDOH) will be using x225 837R format going forward. This is essentially x12 837I (standard used for submitting institutional claims) format with additional segment for race/ethnicity and NTE segment to collect source of payment and cardiac data elements.

NYSDOH has also partnered with Optum Government Solutions, Inc. for redesigning the processing system required for SPARCS.

Key points to consider:

            • Legacy system lack the utility to export data in 837I format. Facilities will need to check if their system provides data in the compatible format. If not, find a way to convert data into SPARCS compliant format.
            • The redesign of processing system may pose challenges with respect to the interface of the portal and method of submission within the portal.
            • NYSDOH is targeting complete implementation of the new system within 12 months.
            • Testing phase of SPARCS data submission in the new system begins on January 23rd 2018. Facilities can begin submitting test data to get comfortable with the nuances of the new submission method.
            • New format is applicable for Q4 2017 submissions and facilities are required to have at least one accepted claim for each claim type by April 30, 2018.
            • NYSDOH also requires 95% of the facility’s Q4 2017 data to be submitted as per the new format by June 30, 2018 and 100% of the facility’s Q4 2017 data to be submitted by Sep 30, 2018.

 

*Timelines are representative of current plan and are subject to change.

References:

New York State Department Of Health

SPARCS Operations Guide

Redesign of the SPARCS Submission Process

Statewide Planning and Research Cooperative System (SPARCS) Translation Project Stakeholder Meeting

We have been working with several clients and helping them comply with Meaningful Use, PQRS, ASCQR, SPARCS, HCRA and THCIC compliance programs. We have already developed technology to convert data into new SPARCS compliant format. Click here to get in touch and explore further.

 

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