8 Pillars of Success at Sonoran Spine
Spine practices can follow one of several different business models with a focus on either surgical cases, non-surgical cases or a mix of both. When founding his group, Sonoran Spine, Dennis Crandall, MD, chose a model that emphasized treating all different types of patients.
"We have chosen a model on purpose that embraces all spine disease in adults and children — operative and non-operative," says Dr. Crandall, who now serves as the practice president and CEO. "We don't want our referral physicians to think about whether their patients would fit our treatment style; we want them to send patients to us regardless of their condition and we can guide them to the best treatment."
Here, Dr. Crandall discusses the challenges and opportunities presented by this practice model and how his group has remained successful despite changes in the healthcare environment.
1. Make it easy for patients to come through the door. Sonoran Spine is a patient-driven practice, which means the surgeons depend upon a high volume of cases to keep the practice running. Since there are specialists in several different spine-related areas, the group can accept most patients coming their way; however, they must also focus on quality to encourage those referrals.
"We want to see everyone who walks through the door," says Dr. Crandall. "We need to have sufficient quality providers to meet our need for volume. Our care must be consistent with our patients' and referring physicians' quality expectations. We have to be able to take on surgical and non surgical cases, work-related issues, tertiary or simple cases."
Currently, the practice has four spine surgeons ranging in expertise from adult and pediatric scoliosis and other major deformity correction to caring for patients with degenerative and traumatic conditions. Additional medical specialists include a pain management physician, five physician assistants and one research nurse. In the future, Dr. Crandall hopes to add additional pain management specialists, tumor and spinal trauma surgeons to further extend coverage at the practice.
"We want to develop niche areas in spine we don't have covered right now," says Dr. Crandall. "It's hard for us to meet the needs we have right now and go after new business considering how busy we already are. However, this is an opportunity for the future and we are thinking about how to take advantage of it."
2. Develop additional ancillary service lines. Right now, the surgeons at Sonoran Spine accept any case almost regardless of the payor, which means accepting Medicare patients. Managed care plans continue to drop their rates, significantly decreasing profitability on those cases. Medicare reimbursement has been in a constant state of flux, with Congress threatening to dramatically decrease payments to physicians. As a result, Dr. Crandall and his partners are exploring ancillary services as a new way to bring revenue into the group. Sonoran Spine currently includes an in-house X-ray and physical therapy.
"Most practices have an X-ray, but since we do a lot of spinal deformity cases we have a machine that allows us to shoot 18x36 inch long spine films," Dr. Crandall says. "That's something that can't be done at just any outpatient radiology center, so we brought it in-house."
When it was time to bring in physical therapy, Dr. Crandall was initially skeptical of its profitability because overseeing the collection of $10-$20 copays can be onerous; the office staff spend time tracking down these small payments, which may not amount to much value. However, soon after incorporating those services the profitability became clear.
"It really has been a good, revenue positive decision to add physical therapy," he says. "We have tight control on the therapists and how the therapy is delivered. Our communication between the physicians' and therapists' offices is fantastic, which makes working together with a patient so much easier."
Now, when Dr. Crandall recommends therapy for the patient, he can call a therapist into the office to the office during the patients' visit to discuss their treatment plan. This boutique level of care projects a positive image of the practice with highly integrated care.
3. Investment in a surgical hospital. Sonoran Spine invests in a surgical hospital dedicated to orthopedic and spine procedures. While the hospital offers a little extra ancillary revenue, Dr. Crandall said the most significant return on the investment comes from patient and physician satisfaction. "We have governance control on the way patients are taken care of and screened at the hospital," he says. "It's far more enjoyable from the patient's experience, as well as the surgeons' standpoint, to have all the nurses, physical therapists and OR staff all on the same page with one goal: to make patients happy."
Since the staff is focused only on orthopedic and spine cases, they are more familiar with recovery process and can develop a closer relationship with physicians and patients. "For me, it's such a pleasure to walk on the floor and have the nurses approach me, telling me about a specific patient," he says. "I can tell the nurse has been closely involved with the patient, and patients feel like we are listening to them. The patient satisfaction surveys we get back at our surgical hospital are sometimes 20-30 percent higher than satisfaction surveys on the same surgeons at different hospitals."
Dr. Crandall says the strict focus on patient care has created a culture in the surgical hospital that promotes higher patient satisfaction and a better physician experience than at typical, non-specialty hospitals.
4. Strike a balanced payor mix. With declining reimbursement rates across the board, spine practices must analyze their payor mix and figure out how to recruit more profitable cases. For Sonoran Spine, this means doing an appropriate number of other cases, including workers' compensation cases, to balance Medicare rates. Workers' compensation cases pay higher rates than other cases, partially because there is extra work the physicians and specialists must complete for each episode of care. Some practices focus solely on workers' compensation cases — which is one example of an effective business model, but not one Sonoran Spine aspires to achieve.
"We don't want to do entirely workers' compensation cases, but we do want a good level of workers' compensation in our payor mix," says Dr. Crandall. "With that higher reimbursement, we can become more efficient."
However, if Medicare cases continue to decline at an unsustainable rate, spine practices may need to drop those cases in the future to stay profitable. "We haven't closed the door on Medicare patients yet because we feel it's important to care for this population," says Dr. Crandall. "However, we can't follow Medicare if rates keep declining. Many of our colleagues have already decided they can't see Medicare patients."
5. Hire quality providers to work with your patients. If providing high-quality patient care and promoting a positive patient experience is what differentiates your practice, then you want to attract and maintain "A level" staff and employees, says Dr. Crandall. High quality employees can boost patient satisfaction and promote better treatment outcomes.
"We don't settle for less than 'A level' providers because we think as the future evolves there will be more stress on getting patient volume through the door; in that environment, our best asset is our service quality," says Dr. Crandall. "If we have 'B level' or 'C level' people working for us, we won't be able to compete well."
The quality of care begins with the physicians, which is why Sonoran Spine only brings on like-minded physicians focused on providing a high level of service. "These are the type of people who enjoy interacting with patients and the private practice environment," says Dr. Crandall. "Our office manager is also completely in step with the overall patient care ethic we embrace as physicians."
With physicians leading the charge, the culture of excellent patient care becomes pervasive among the practice staff, especially when they are incentivized. At Sonoran Spine, employees undergo yearly evaluations and are rewarded with bonuses or raises based on how consistent their performance was with the group's overall outlook on patient care.
6. Focus on the patient-physician relationship. Healthcare legislation and regulation is constantly changing, which makes it difficult for providers to run their businesses. Despite these challenges, it's important to maintain a focus on the patient-physician relationship to provide a higher level of care. "I see significant changes regardless of who wins the election in 2012," says Dr. Crandall. "The healthcare economics of 2012 are going to require changes regardless of your politics. At the end of the day, healthcare delivery will still depend on physicians taking care of patients."
Some providers are forming accountable care organizations for shared savings, but Dr. Crandall doesn't see his group joining an ACO any time soon. Instead, the group plans to tackle today's challenges by devising new ways to capture outcomes and patient satisfaction data as well as strengthening relationships with referral sources.
"Our biggest referral sources are prior patients, so we want to make sure that doesn't change," says Dr. Crandall. "If that continues, we'll be in a good place for the future. We fully expect competitive pressure from other groups, but having a positive patient care experience can give our group the edge."
The group also takes time to thank referring physicians and is exploring new ways to build a relationship with those colleagues as well.
7. Project leadership through teaching and education. In the professional and local community, it's important to accept leadership roles. The physicians of Sonoran Spine are involved in teaching residents and spine training for the residency program in Phoenix. They also host community outreach educational programs and present research at professional society meetings.
"We want to continue to project leadership through teaching programs and the research presentations we give," says Dr. Crandall. Last year, the surgeons presented 22 different research papers based on their practice data at national and international meetings. Next year, the group is on track to present 30 or more papers, some with an average follow-up period of five years.
8. Initiate research and share results. Many of the physicians at Sonoran Spine engage in spine research, education and innovation in addition to their regular practice. The group includes Sonoran Spine Research and Education Foundation, which is an independent, non-profit organization that supports public awareness programs, spinal advocacy groups and research activities.
"Since we have the research foundation, our research costs aren't direct overhead for the practice," says Dr. Crandall. "They are handled under the foundation overhead. As a result, partners who aren't active in research don't feel the pinch on their salaries when they aren't participating in research efforts to the degree of other partners."
The surgeons gather data from their all patients at Sonoran Spine, regardless of their research intentions. This data includes patient outcomes and satisfaction scores. Then, two full-time research coordinators gather and organize data from the practice so the surgeons can easily analyze and present their findings.
"For us, the key is that every single patient on every single visit fills out research and outcomes forms," says Dr. Crandall. "We try not to make them long but still capture the data we need. When I ask my research coordinators to look up data on 15 projects on long term patient outcomes, they can easily pull the information from our database."