Managing Expectations

Radiology business managers help practices thrive in a challenging business climate.managing expectations

Jonathan Swift once said, "A wise many should have money in his head, but not in his heart." In light of the current political and economic climate, this is a maxim that radiologists sometimes forget.

At a number of private practices, physicians have taken on business responsibilities in hopes of saving their practice money. These radiologists often find themselves spending many hours each week on such activities as engaging in personnel decisions, reviewing contracts, and scheduling equipment maintenance, all of which take time away from patient care. Although this approach has proven fruitful for some doctors, for others, it might make more sense for practice business managers to step in and handle these duties.

The Chief of Staff

Bob Still, president of the RBMA board of directors, explains that business managers bring a level of business experience to the table that most doctors simply do not have. The practice business management industry, he explains, has evolved along with the increasingly complex business landscape. "Thirty years ago, a business manager was someone who ran a practice's front desk," he says. Now, running a business is a sophisticated enterprise, requiring the practice to employ professionals who can bring a variety of operational skills to the table, such as the ability to negotiate contracts with insurance companies.

Still, who is practice manager at Lancaster Radiology Associates, Ltd., in Lancaster, Pa., thinks of himself as chief of staff to the physician leaders at the practice — not as CEO. "To describe my role as that of a CEO would be incorrect," he asserts. "Few people in my position have hiring and firing capabilities over physician staff members." Instead, though he is a full-time employee, he works in a consulting capacity, advising the practice's physicians on matters such as negotiating contracts with the hospital with which they partner. In addition, once a month, he meets with both the president of the practice and the senior leadership of the hospital to review business-related issues.

Although business managers may not be considered CEOs of the practice, they nonetheless operate at a high level within the organization. "I see the business manager as fulfilling the role of chief operating officer or executive vice president in a practice," says William T. Thorwarth Jr., MD, FACR, of Catawba Radiological Associates in Hickory, N.C. "They should always have a finger on the pulse of what's going on in the business of radiology."

Relying on the counsel of a seasoned business professional allows radiologists to spend less time on corporate matters and more time doing what they were trained to do: practice radiology. Still cites an example of a doctor who dedicates 12 hours a week to managing his group's pension plan. Business managers can often handle this sort of workload more efficiently than doctors, freeing the physicians up to practice medicine for more hours during the week. "As a doctor," Still says, "if you're spending a lot of time managing your group's affairs, you have to ask yourself, what is your time worth? What are you trained to do?" At the end of the day, he concludes, it may make sense to hire someone with management expertise.

Many Paths, One Goal

Whether or not a practice hires a business manager, the physician leaders should keep in mind that, in Thorwarth's words, "the economic viability of an entity is dependent on generating sufficient revenues." Seeking outside assistance to manage a company's books, either on full-time basis or through a part-time consulting arrangement, depends on many factors, including practice size. "Practices often experience a business-related tipping point," notes Michael R. Mabry, executive director of the RBMA, after which hiring a business manager becomes a practical option. Such a scenario may involve a precipitous increase in the number of patients being seen or new partnerships with multiple hospitals. Mabry believes that practice size has everything to do with the appropriateness of hiring a business manager. "In, say, a small radiology group that supports one hospital, the doctors could do reasonably well outsourcing their billing and coding to an outside billing company," he says. Once that group expands, though, he notes that physicians have to contend with technology decisions, such as obtaining and billing and coding software. At that point, many practices find that they need to bring in professional assistance.

But there are exceptions to this rule. Some radiology practices have flourished while choosing not to hire a practice manager. Advanced Radiology PA in Baltimore is just such a practice. A professional provider of imaging services for hospitals and imaging centers, Advanced Radiology works exclusively with a business partner, who owns and runs the practice's imaging centers. Although they have hired outside help to manage a portion of thier business affairs, staff radiologists make some financial decisions. Loralie D. Ma, MD, PhD, FACR, a radiologist with Advanced Radiology, explains that, even though the practice came about when seven different radiology practices in the Baltimore metropolitan area merged, bringing together 80 radiologists under one entity, the practice has not felt the need to hire an employee to manage the entire practice.

"We've been able to hire accountants, lawyers, and others to fill the roles of a practice business manager," she explains. The group felt from the beginning that it needed physicians in leadership positions, including business leadership. "We didn't think a business person could understand the facets of our organization as well as the doctors could," Ma says. Although operational responsibilities can be distributed across many radiologists in such a large practice, she admits that taking care of business activities consumes a good deal of time.

The group's president, along with its lawyers and accountants, reviews all of the practice's business contracts, including hospital contracts. When it comes to operations, the president and the practice's board of directors decide such things as how many new radiologists the practice hires, how responsibilities are divided, and how employees are scheduled.

Education Gap

If a practice happens to enlist radiologists with a background in business, as is the case at Advanced Radiology PA, then it has some latitude in whether or not it hires a business manager. But many practices do not have this luxury. Although 65 universities offer joint MD/MBA programs, a large number of medical schools offer little business training as a part of their core curriculum. Because of this, radiologists often begin their careers without the skills necessary to manage a successful business.

Every other year, Still travels to the Hershey Medical Center in Hershey, Pa., to lecture on the business of radiology to radiology residents. During his most recent visit, out of 700 lectures, his was the only one that tried to impart business skills to medical students. And although more schools are offering joint MD/MBA programs than they did twenty years ago, Still does not believe that most medical students will be taking on the progressively more intricate landscape of medical reimbursements. "There's going to be a whole new world of physician reimbursement over the next 5 to 10 years in this country," he asserts. "That says to me that there will be many employment opportunities for people who can figure out how the mechanics of reimbursement will work."

When it comes to financial matters such as billing and contract negotiations, radiologists in private practice can either lean on whatever business training they may have and accept these responsibilities for themselves or they can take advantage of outside help such as business managers. While some find this outside help advantageous, others prefer to balance medicine with business. Given the difficult economy, the choice for radiologists is not an easy one.

By Chris Hobson

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