4 Solutions to Common Reasons Why Orthopedic Surgeons Lose Money

Practice Management

In an age where many orthopedic practices are experiencing shrinking revenues and a decreasing patient base, the physicians at Orlin & Cohen Orthopedic Associates in Rockville Centre, N.Y., have been able to meet these challenges head-on. Craig Levitz, MD, an orthopedic surgeon and partner at Orlin & Cohen says the practice has grown 30 percent in revenue and patient base over the past few years because the surgeons were prepared to deal with the challenges of today's healthcare environment. Dr. Levitz discusses four reasons why orthopedic surgeons lose money and how to make sure your practice avoids making these mistakes.

Issue #1: High patient volume doesn't always mean higher revenue.
Orthopedic surgeons are trained to think that the more surgeries they perform, the more money they earn. Dr. Levitz says this line of thinking isn't always true and is a contributing factor in revenue loss for many practices. "One of the biggest reasons surgeons lose money is because their surgeries cost more than their expenses," he says. General orthopedic surgeons often take time to perform an array of surgeries and treatments for their patients, which takes a great deal of time, especially if the surgeries are performed in hospitals. Additionally, even though the surgeon is at the hospital, he or she is still running the clinical office and paying employees to work there. "Orthopedic surgeons don't run their practice like a business," says Dr. Levitz. "They aren't always cognizant of the revenue they are getting for their case or how much that case is costing them."

Solution: Focus on efficiency.
Orthopedic surgeons should learn an ultra specialization, says Dr. Levitz, to keep the practice profitable. Surgeons should focus on performing only a few different procedures, such as arthroscopy, instead of performing general orthopedics. Join with other surgeons who specialize in different areas to make the practice more versatile. "When you are doing the same thing every day, you can do it more efficiently, both quality- and time-wise," says Dr. Levitz. "If you are setting up to do the same thing every day with the same team, you work quickly." He says the average time it takes surgeons to perform an arthroscopy is 1-1.5 hours. With his ultra-specialization, he is able to perform the surgery in 10 minutes. "Regardless of the reimbursement curve, you are generating money," he says.

Issue #2: Performing procedures inefficiently. If a surgeon does not specialize in a few different procedures, he or she often takes longer to perform the surgeries, which will lose the practice money. "One of the biggest reasons physicians lose money is that they are doing surgery inefficiently," he says. Beyond a lack of specialization, a big contributor to the lack of efficiency is time spent in the hospital to perform surgery on one patient. Since it takes time to prepare the patient and OR for surgery and the surgeon must stay at the hospital until the patient wakes from surgery, it isn't efficient to only perform one surgery at a time. The surgery usually takes 2-3 hours, but the surgeon must be at the hospital for 8-10 hours. "The surgeon is working eight hours and being paid for three," says Dr. Levitz.

Solution: Refer away patients who aren't in your specialty and demand multiple hospital suits.
When orthopedic surgeons see a patient who isn't within their ultra-specialization, they should refer the patient to a different specialist. "Sometimes it's much more efficient to refer that case to a specialist in your group or another group even if you can perform the procedure from a quality standpoint," says Dr. Levitz. Orthopedic surgeons should also make sure they have multiple ORs available to them so that when one surgery is completed, they can efficiently move to the next room for surgery. "With today's reimbursement levels, physicians can't just sit around and wait," says Dr. Levitz. "If you're very busy, efficient and have lots of cases, tell the hospital what you need or you will take the business somewhere else. The hospitals are hungry for the cases and they will negotiate with you." Hospitals aren't used to negotiating with surgeons; however, if the surgeon is from a larger orthopedic practice there is more negotiating power. "Doctors need to be in larger groups so they have power with the surgery centers and hospitals to demand multiple hospital suits," he says.

Issue #3: Controlling overhead costs.
Traditionally, many orthopedic surgeons purchase space where each surgeon in the practice has a large office and could afford to invest in whatever technology was available. Now, surgeons often spend very little time in their office, says Dr. Levitz, and some of the newest devices place a huge financial burden on the practice. To maximize a practice's bottom line, surgeons must keep overhead costs under control.

Solution: Invest in quality resources.
When considering the facilities, don't purchase space for each orthopedic surgeon to have their own office. "To pay the rent on a separate office for each doctor doesn't make sense," says Dr. Levitz. "It doesn't pay to have a place to hang diplomas. Invest your resources in aspects of medicine that are going to deliver increased revenue." Ancillary technology and additional staffing could help increase the patient volume and practice revenue. The practice should only include a few desks to share between surgeons. Surgeons should also pay attention to the cost of technology and consider whether the technology is necessary before investing in it. "Technology is a large expenditure many practices don't want to make," says Dr. Levitz.

Issue #4: Dealing with a high patient volume.
In the current healthcare environment, many orthopedic surgeons are seeing an increasing number of patients. While this influx might be good for surgeons who don't have a full schedule, busy surgeons will find it difficult to spend a large amount of time with all of their patients, says Dr. Levitz.  If surgeons spread themselves too thin, patient satisfaction decreases and the surgeon's reputation among his potential patient base suffers. "The revenue is important, but the quality drives the revenue equation," he says. "The best way to grow a practice is to make someone happy with their surgery. You can't buy that kind of publicity." Many times patients arrive at the practice with a story about their injury or pain and they want the surgeon to know all about their case before making a treatment decision. Surgeons often don't have time to listen to all these stories, and rush through one patient's visit to stay on schedule with the next.

Solution: Hire new personnel.
After taking the time to perform surgeries and deal with the administrative aspects of a busy practice, if a surgeon feels like there isn't enough time to spend with patients during initial visits, he or she should hire extra staff to spend time with patients, says Dr. Levitz. "Some people think it's a waste of space and resources to hire extra personnel, but you want to invest in your resources," says Dr. Levitz. "You are better off having an extra nurse to develop a relationship with the patient and hire extra staff to deal with the administrative aspect of the practice." He also suggests hiring a physician's assistant to make sure the patients are satisfied with their visits. The PAs can listen to patient stories and relay the important aspects to the surgeon before he or she visits the patient to save time. "You can bridge the quality gap with a good physician's assistant," says Dr. Levitz. The PA can also assist in the OR, and the practice can collect revenue for the assistance.

Alternatively, the physician can also give his or her e-mail address to patients in case the patients have non-emergency questions. The patient can communicate with the surgeon in real-time, which makes it seem as though the surgeon is spending more time with each patient. Dr. Levitz says he would normally pay five people to handle calls from patients with questions, but now he does most of the responding himself using e-mail on his cell phone. However, surgeons should still be mindful of communicating with patients who prefer not to use electronic communication. "A mix of electronic communication and phone calls is the way to go," he says. "You still need to have the office and people there to answer your calls, but you can really extend your reach if you use technology wisely."

Learn more about Dr. Craig Levitz.

Read other coverage on improving orthopedic and spine practice profits:

- 6 Ways for Orthopedic and Spine Surgery Centers to Stay Profitable in 2011

- 5 Techniques to Make Spine Profitable at Your Orthopedic Practice

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