Pat Kroken

Healthcare reform is game changer but nobody can yet fully articulate the impact of the new rules. How do you plan for the future when there are so many unknowns? This is the second article in a series that examines how healthcare reform is likely to affect radiology practices and how they can prepare for drastic changes to come.

Business consultant Pat Kroken discusses the need to batten down the hatches before provisions of the healthcare reform bill blow in next year. She suggests ways to improve internal billing and collection processes and find lost money.

This is the third and final article in a series reviewing why and how radiology practices set themselves up to lose their long-held professional services agreements. What steps groups can take to turn an adversarial relationship to a collaborative partnership is the subject of this third article. Included is a challenge to change how we conduct business, with the goal of long-term success for everyone involved.

From the hospital's perspective, a radiology group's quality is measured by quality assurance reporting, working well with others, participating on medical staff committees, and other administrative duties. Still, a highly competent radiology practice, one with "quality" radiologists, can lose a contract over basic service issues, nonphysician interpersonal relationships, or other common administrative expectations.

In a previous radiology lifetime (not so long ago), geography was the friend of the radiology group with an exclusive hospital professional services agreement. Life was tidier then, with turf carved out in a relatively collegial fashion among radiology practices who maintained a gentleman’s agreement not to compete across certain lines. Geographic distribution and a “moat” of agreed-upon boundaries provided a level of strength so groups could also exhibit an adversarial stance when dealing with hospital administration. And they frequently did. They also tolerated bad behavior among members of the group and, in some cases, seemed to view their contracts as entitlements.

Assuming our hypothetical radiology practice reached consensus regarding a baseline compensation package, what would be the financial implications to physicians in the group? We begin with a practice profile.

The first article in this series discussed why productivity-based compensation is controversial based on the various production levels in the group: the racehorses, plowhorses, and plodders. Once productivity-based compensation has passed the conceptual stage, the real work begins. And this phase, due to its potential complexity and the reality of potential salary adjustments, often represents the point at which the wheels fall off.

At best, productivity-based compensation is a hot topic; at worst, it is potentially the downfall of those promoting it-if not threatening to the very survival of a group. Are there groups compensating on a productivity-based model? Yes, but very few.