This article appears in the December 2012 issue of Managed Contracting & Reimbursement Advisor Staff.
If you want to get serious about improving revenue in your practice, you may have to consider an entire culture change. That was the experience of Atrius Health in Auburndale, Mass., the largest primary care physician group in the state, which is enjoying increased revenue of $1.75 million per year, after a gain in the first year of $3.5 million.
The improvements were the result of an ongoing cultural transformation, says Chief Medical Officer Michael Pinnolis, MD. Taking a page from Toyota Motor Group, FedEx, and the manufacturing world, Atrius is applying the tenets of Lean management to healthcare to identify and seek out waste. The results have been steady and are accelerating as more of the organization is trained. Best of all, Atrius' first-year return was achieved while simultaneously improving patient care.
By improving patient flow, the MRI suite at Atrius Health has decreased turnaround time, yielding a net gain of more than $750,000 per year and decreasing patient wait time. The endoscopy suite has improved capacity and access for patients without increasing overhead or staffing costs, which resulted in a gain of almost $1 million per year to the practice.
The effort started four years ago at Atrius's 15 practice sites in the Boston area.
"We take a lot of managed care contracts and we're at just over 50% capitated," Pinnolis says. "Something over 80% of our revenue comes from risk-based contracts, and when we looked down the road at where Massachusetts and the rest of the country were headed, we wanted to do something that would help us improve our practice efficiency and lower our medical expenses."
The solution had to include creating a system of care, Pinnolis says. The Lean methodology first promoted by Toyota seemed like the most promising avenue, and Atrius began adopting the methodology in March 2009. Lean management is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Essentially, Lean management is centered on preserving value while decreasing the amount of work.
"We wanted to change the way we managed the practice and create a system based on that," Pinnolis explains. "In the beginning our physicians were almost all skeptics and wondered if it was another thing management was doing to drive the physicians crazy."
However, physicians are almost unilaterally on board now, Pinnolis says. In applying Lean management to the physician practice, Pinnolis and the other leaders had to get the frontline caregivers and other employers involved in problem solving and process improvement. Previously, upper management would address any problems that came up and pass the solution on down the line.
"That had not worked very effectively. With the new approach, we wanted to enlist the staff and their knowledge, expertise, and enthusiasm in this process of change," Pinnolis says. "Continuous improvement is a big part of Lean management, with people trying to improve processes and solve problems all the time."
This article appears in the December 2012 issue of Managed Contracting & Reimbursement Advisor Staff.