What I learned from Bennie the Brit

My first major purchase in life was a new, British, racing green,1968 MGB/GT. It cost $3,225, and after a down payment, it was paid off in 36 monthly drafts of $60.69. I remember that, to the penny. While a truly inferior automobile at any price, it was a source of great pride, for its lines and the rumble of its engine. It was also a frequent visitor to the shop, and a financial hemorrhage.

The warranty period was over all too soon, and on the first visit for repairs on my own nickel, I was shocked, shocked, to discover that I was charged for two hours of shop work when the mechanic spent only one hour under the hood.

“Why this extortionate fee?” I demanded of Bennie, the rotund and dapper little man with a pencil mustache and English accent who had sold me the car.

“Well,” he replied (my memory being, in this case, approximate), “you must recognize that this is an exceptionally talented mechanic. A normally talented mechanic, according to a survey conducted by British Leyland Motors, takes two hours to perform this particular operation. Should we punish this chap simply for the crime of being skilled?”

That introduction into the philosophy of Adam Smith left me speechless. Because, of course, he was right.

The official philosophy of Marxism was “from each according to his ability, to each according to his need.” Given the inexorable law of human nature, this led to the old joke in communist Russia: “I pretend to work, and the State pretends to pay me.”

This might be a pretty good description of some hospital-owned family physicians, at least according to the stories I hear from patients defecting from their practices. Routine physicals not available for eight months? No more than one problem per office visit?

Now I have to make a confession. Although I am an avowed capitalist, I was really slow to apply the lesson of Bennie the Brit when it came to my own practice. My excuse is that I’m not instinctively entrepreneurial, and the health care system is an oligopoly, not a free market. When I started practice in 1986, there were no guides to tell me what E/M code to charge – in fact, the term E/M wasn’t invented yet. So I asked around, and the consensus seemed to be that an office visit was a 99213, no matter how many problems you solved.

Except for Pap smears. Those were 99214, because that was what the local OB/GYNs charged. I was too dumb to ask why, and Blue Cross never challenged my charges. So I thought I must be doing something right. Now I know that they charged 99214 because their Pap was "special."

My goal was to imitate the Cooper Clinic physical, only cheap. Giving value was the part of capitalism that I understood at that point. Then the era of full capitation hit, and giving value was the precisely right formula; I got the same results as my peers for a lot less money, or better results for the same money (same thing, really) and took home bonuses amounting to 30 percent of my total income for several years.

Then the greed of Big Cigar HMOs cost us the confidence of the public, who assumed we were shorting them services when we didn’t order CT scans for muscle-contraction headaches. My income regressed toward the mean.

All this time, mind you, my practice style hadn’t changed. I pounced on hyperlipidemia like Holmes on Moriarity. Adult-onset diabetes was the rat to my rat catcher. I only hired RNs, and since I tried to follow the same algorithm with every patient, they did a lot of the work before I got into the room. Since patients got the same story every time, they didn’t get confused; and, though they rarely followed my “therapeutic lifestyle changes,” they did come to believe that I was informed, concerned and worthy of their trust. So they took the pills I prescribed.

When I worked for the U.S. Army, 12 patients a day was an exhausting load. Six years in the emergency room cured me of that bad habit. Early in my private practice, I found that 25 patients per day was not only conceivable but comfortable, when my staff became an extension of myself. Now the challenge is to see how many problems we can address in 10 or 15 minutes.

But I was still charging 99213 for these complex encounters. The scales fell from my eyes when I read a classic FPM article, “How to Get All the 99214s You Deserve.” A terrific follow-up to that was just published: “Coding From the Bottom Up."

Once I started getting all the 99214s I deserved, my charges rose by 30 percent over a four-year period. (It took four years to change my charging habits; such was the depth of my rut.) And all of that, dear reader, went directly to my bottom line – because it didn’t raise my overhead one dime to change a code.

And that was how I learned the lesson – better late than never – of Bennie the Brit. I was the skilled mechanic who was charging like a normal mechanic. If there is any low-hanging fruit in this blog, which is dedicated to proving that FPs can compete with specialists financially, this is it.

As for the more difficult issue – how to become a skilled mechanic – that’s a story for another day.

Sideline: If you’d like to get in on a continuing conversation between me and the physician who practically invented HMOs while serving as a member of the U.S. Congress, here’s the link.

Posted at 01:50PM Dec 15, 2008 by Doug Iliff  |  Comments[3]

Financial vs. medical productivity

There are two kinds of productivity in family medicine, closely intertwined.

The first (and the one I am primarily concerned with in this blog) we might call financial productivity. It has to do with the formula I gave you fortnight last. How much money did you make from your medical activities per hour of time?

The second we will call medical productivity. This involves the number of problems you address successfully per hour of time. Let’s not split hairs; obviously, managing a myocardial infarction takes more time than a bronchitis. The key is whether you manage the MI more efficiently than the FP in the next office.

I know my financial productivity by the monthly reports from my accountant, and from my adjusted gross income on my 1040. Those give me numbers I can divide by the hours I spend in the office, the hospital and the committee room.

It would be hard to know my medical productivity without a helpful semi-annual report I get from Blue Cross, which is 85 percent of my business. It looks like this:

This report is representative of all the others. Year in and year out, I manage comparable problems for about 20 percent less money than my peers. This is why I wept when full capitation ended. I didn’t practice any different under that system, but I got a share of the money I saved. All the efforts I make to educate my patients, to use generic medications, to prevent medical breakdowns – all the money I save now goes to the insurance company, and in turn (I trust) back to patients in lower premiums. 

Of course, there are other potential explanations. I may turn away walking medical disasters at the door. I may turf them to other primary care docs. Healthy patients may choose me selectively because of my practice philosophy. I may be nice to compliant patients, and nasty to the rest, who drift away. I may be lucky. 

Because I’m not concerned here with medical productivity, I don’t have to address those questions. 

There are at least six overlapping elements of financial productivity. I will reserve the right to acknowledge more under the close questioning of readers, but this is a good start:

1. How fast do you work and think?
2. How many problems can you manage in an hour? 
3. How much time do you spend on non-paying medical activities?
4. How much do patients trust you?
5. How efficient is your collection system?
6. How much attention do you pay to coding?

I said at the beginning that medical and financial productivity are intertwined. For instance, if my patients trust me, they are more likely to be compliant with my advice, and (assuming it is good advice), Blue Cross will like me more; but I will also have to spend less valuable time persuading them to follow my directions.

Similarly, if I manage more problems per unit of time, I will see patients today rather than six weeks from now, and seeing them promptly is medically more important than being smart; but it also allows me to charge more 99214s. You get the picture.

For the purpose of this conversation, there is an important question I can’t answer with confidence. To what extent are the above six elements teachable? I know I can teach a student how to read an EKG or manage adult-onset diabetes; but can I teach her to make decisions more quickly? to connect with patients more effectively? to refuse to procrastinate?

If these are immutable personality factors, then this blog is a waste of time. Time will tell. But I have one small piece of personal evidence which persuades me otherwise.

When I was on the teaching staff of a residency program, I conducted a research study as part of the first class of faculty fellows at the University of North Carolina-Chapel Hill. It was published in some obscure journal, now out of print, and I don’t even have a copy.

I videotaped residents interviewing mock patients, and then had them watch the tapes. That was the only intervention. No coaching was involved. The interviews were repeated, and the before-and-after tapes were graded according to five behavioral parameters, all of which I have forgotten save one.

It was “attending behavior.” What that meant was the ability of the resident to pay attention to the patient during the interview. There would be points off for poor eye contact, nose-picking, interrupting, non-sequitur comments or questions, that sort of thing. Today we would include excessive attention to the EMR format.

The response was really quite dramatic. In the post-interviews, residents had obviously been embarrassed by their behavior quirks. They did a good job of appearing to attend. Of course, there is no way to know if they were just faking it; one can make eye contact during a daydream. But that’s a useful skill, anyway.

So I am led to believe that young family physicians can be taught to work hard, to work efficiently, and to work well – all at the same time. We’ll see by your response.

Follow-up to the last column:

Dr. Willis asks honest and perceptive questions, which I will answer economically. Over the first 11 months of 2008, I have averaged 25 patients per day. Of my E/M codes, the top three were 99213 (56 percent), 99214 (20 percent) and 99396 (5 percent). Procedures are a very small part of my practice, and almost all of my hospital work is obstetrics and newborn care. All of my billing and collection work is done by my staff. I don’t ever say goodbye to my patients, but about two-thirds say goodbye to me when they enroll in Medicare.

Dr. Schmidt raises a philosophical issue: Is the practice of family medicine a business, or a profession? My personal view is that it is first a profession, and that business considerations must come second. Whenever there is a conflict between a professional duty to the welfare of the patient and my personal financial profit, duty trumps.

(For a 19th-century literary view of this subject, I would recommend Middlemarch by George Eliot; the struggles of a well-trained, honest young physician against the medical establishment will remind you why we don’t dispense the medicine we prescribe.)

There is a constant battle between the expectations of patients and quality medical care. I think I fight the good fight, but it would be dishonest to claim that I never throw in that towel. No one becomes a drug addict on my watch, though. My head nurse sniffs them out like a bloodhound. And nobody gets antibiotics over the phone.

Finally, Dr. Schmidt, I am indeed uncomfortable talking about making money. There is a tension there, but I’m convinced that there is no essential conflict. The most selfless physicians I know are primary care physicians, and for that selflessness we’re going out of business; and when we go out of business, health care goes to hell. So business it is. Thanks, by the way, for your recommendation of dinosaurmusings.blogspot.com.

Next time we’ll tackle the elements of financial productivity one by one.

Posted at 09:28AM Dec 03, 2008 by Doug Iliff  |  Comments[0]