Overhead remains a constant challenge for spine surgeons who also want to balance that with practice growth.
Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. Becker's invites all spine surgeon and specialist responses.
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Please send responses to Carly Behm at cbehm@beckershealthcare.com by 5 p.m. CST Wednesday, Dec. 4.
Editor's note: Responses were lightly edited for clarity and length.
Question: How are you managing overhead expenses, such as facility costs and medical supplies, to ensure sustainable growth in your spine practice?
Brian Gantwerker, MD. The Craniospinal Center of Los Angeles: The best way I have found to control overhead is to become skilled at some of the more basic things. I often do my own IT (everything but networking) and purchase my own equipment through societies or memberships in organizations. I shop around for good deals on medical equipment which I keep to a minimum. Rent is rent, but it's good to negotiate shrewdly and make sure we are getting value in terms of tenant improvements and terms. Some of the fixed costs are harder, such as malpractice coverage. However, other types of practice insurance can be shopped, as can your ISP, phone company, and payroll companies. Make sure you have control and access to all of your policies and rates at all times. Every two or three years, it's time for a refresh and look for better deals on everything.
Jason Liauw, MD. Hoag Orthopedic Institute (Laguna Hills, Calif.): Unfortunately, everyone in our field is feeling the squeeze. Overhead is going up and reimbursement is stagnating or going down. I think this a severe problem with regards to sustainability of the profession, especially as there is also more and more red tape with various trainings, certifications, and documentation that surgeons have to constantly keep up with. With the lack of increased reimbursements, surgeons generally have to see and treat more patients to keep practices sustainable and as a result have to also increase overhead with support staff and physician assistant/NP. In the academic world and in certain employed models in larger health systems, they are able to add a facility fee to outpatient appointments to cover the higher overhead.
Emeka Nwodim, MD. The Centers for Advanced Orthopaedics (Bethesda, Md.): Here at The Centers for Advanced Orthopaedics (CAO), in collaboration with MedVanta, we have made significant efforts to control overhead expenses amid the tremendous financial challenges facing the healthcare industry. Our partnership with MedVanta has enabled those of us in private practice to engage in large-scale negotiations with payers and, on a more granular level, with landlords and vendors.
The corporate office continues to work to centralize most negotiations and establish standards that protect each division and its members. This ultimately provides cost savings.
We have achieved a compound annual growth rate of more than 10% since our inception and have seen a 20% to 30% reduction in supply costs through purchasing power. Leases and facility fees have been scrutinized and optimized by our central office to ensure our expenses are competitive and lease terms are advantageous. These are just a few examples. Just as important is the value of time, which many of us providers have in short supply. The centralized process, with dedicated staff committed to optimizing systems and contract savings, is of tremendous value.