Strategies for Financial Survival in Geriatric Practice: Managing a Primary Care Geriatric Practice Involved in Long-Term and A

In an attempt to describe how a private group practice in geriatrics operates and the various ways in which it can be successful, Jeffrey E. Escher, MD, Acting Associate Program Director for Gerontology, and Associate Professor of Clinical Medicine, New York Medical College, used his own metropolitan New York-based practice as an example. The 20-year-old practice is located mainly in the southern part of Westchester County and the northern section of Bronx County and has contracts primarily with nursing homes, assisted living facilities, outpatient clinics, physician practice members, and nurse practitioners and physician  assistants. In reference to the nursing homes that have agreements with his practice, Dr. Escher said that, “in a way, what they’ve done is they’ve outsourced their medical care to a medical group, which is us.” The speaker explained that this type of practice is “fluid in its content and its relationships with respect to personnel and institutions” in that “we drop one, we pick up another.” In addition, physicians in this practice do not get paid a salary to go to the nursing homes—“we are only fee-for-services.”  According to Dr. Escher, about 70% of the practice’s work involves long-term care, 15% is at the hospital level, approximately 9-10% of the practice comprises office work, and about 5% is in various forms of clinics. The speaker pointed out that his practice also conducts research, provides teaching, and is involved with home care and home visits. In terms of home visits the practice is very selective because “we find that if we are very liberal with home visits, we get abused by it,” the speaker said. “The home care basically involves the physicians’ decisions on their own as to whom they’re going to see, what their functional level is or the level of their dysfunction, and whether they think they simply cannot achieve care in a meaningful way other than with a home visit.” Dr. Escher noted that most of his home care patients were his patients when they were ambulatory. “Primary care MD is the primary care person,” meaning that, “our practice retains primary care control, relationship, dedication to its patient,” the speaker said. “We keep the patients from various institutions in various sites in a continuum–long-term care, hospital, home visits, clinics; they stay our patients.” There are currently five physician extenders and 25 physicians at the practice, with seven of the 25 physicians having done fellowships in geriatrics. The office staff is comprised of a nurse, two receptionists, an office manager and assistants, an accountant, someone who works on credentialing, and five billers for the practice’s in-house billing organization. In long-term care, depending on how the practice is run and the qualities and skills of the caregiver, “we figured that anywhere from 80 to 160 residents can be handled by one person.” In addition, Dr. Escher pointed out that there is a variation in what kind of subacute care exists in each institution, so allotment is integrated into the nursing home’s overall population. A majority of acute care is performed by the primary care MD from the referring nursing home. “In terms of outpatient care, scheduled hours are integrated with respect to nursing home and acute care rounds,” said Dr. Escher. Most physicians “rarely have more than one or two half-days per week” to devote to outpatient services because “of our obligations to other practice sites and other facilities.” “Time is money, and when we’re in this practice, we have to think about that,” stated Dr. Escher. A critique of this type of practice (which the speaker referred to as being hybrid, complex, and atypical) concerns time management that, as Dr. Escher admitted, “requires a lot of work.” Concerning his workplace, he said: “Time management in this practice is as effective as we can make it.” In order to keep physicians’ travel time to a minimum, the practice “modulates the patient volume per physician so it’s physically possible to do, and so that it’s still enough to earn their income.” According to Dr. Escher, the practice’s work volume is “equivalent to the geographic responsibility of two to four colleagues on a weekend.” Visiting nursing homes on nights and on weekends is usually saved for emergency situations; a weekend call in this kind of practice averages to one every third weekend. Unless off call, “each physician takes primary call of his or her patients at any site, 24 hours a day, which promotes continuity of care” and, because the physician is familiar with the patient, there is less work involved. “So we don’t have a practice where we have alternating people on call every third night,” Dr. Escher reiterated. Dr. Escher advised the audience that, in private practice, you have to continuously assess where the money is. “If your accounts receivable are out for 120 days or more, and if it’s over 20%, you’re doing something wrong,” and “before you write off a payment as never being receivable, you have to have your management staff review it,” the speaker said. In addition, in Dr. Escher’s practice, each overhead expense, such as rent, utilities, salaries, benefits for employees, and transportation, gets separately listed and regularly reviewed by the membership of the practice. There are also regular reviews conducted with each member of the group to inform them of how much is going into their 401(k), how much of their earnings are going toward overhead for the practice, and how much is going to their insurance. According to Dr. Escher, physicians and physician extenders must be credentialed, but in the assorted HMOs in the demographic area, “we need to be able to bill. So what we have to constantly do is try to get everyone in the practice credentialed with everything,” including hospitals, nursing homes, and HMOs. He also mentioned that practices should be aware of the fact that there is a big cash flow problem during the first quarter of the year. “You end up getting no money for the first three months because everybody is shifting the bills back and forth”. Dr. Escher recommended that practices budget for the cash flow predicament if they are paying salary or overhead. In addition, “we have to know that the assignment of the worksite for the practitioner has to permit enough patient contacts for that person to generate enough billing and income to pay their salary, benefits, and overhead,” the speaker said. In order to do this, “you have to make it so that you have to do less math and less cost shifting and accountant machinations to justify everybody’s salary.” Dr. Escher’s establishment offers the employees financial incentives and benefits, including an annuity, health insurance, and both disability and life insurance policies. His practice pays for one trip a year to a Continuing Medical Education conference, as well as each member’s vacations, and the physicians’ and physician extenders’ malpractice insurance; the practice reimburses people for cell phones as well as provides the use of a corporate calling card.   “We know in doing this kind of work that it’s stressful,” he said. “We’re constantly bombarded with criticisms, with regulations.” Because it is often difficult to convince people to stay in this type of practice, there is a turnover rate. According to Dr. Escher, “we not only try to pay people what they’re worth, but actually let them do what they like.”