Adding Super Specialists to Your Medical Group
In a multi-specialty group, there are advantages and disadvantages to having different specialists within the group versus referral to an outside specialist. Beyond general medicine, family practice, and general surgery, the group must weigh whether certain sub specialties, such as nephrology, orthopedics or neuro surgery are worth having full time in the group.
The decision has complex components. At first one has to ponder the salary versus extra revenue that can be generated, but there is more to consider. The addition of a subspecialist can help to increase demand for healthcare within the group, as patients prefer one stop shopping. The group can further increase revenue by implementing economies of scale, for example to share office and personnel costs. And, revenues can also increase based on increased intragroup referrals driven by the ease of access to referrals and the knowledge that patients are remaining within the group and will return appropriately to the referring physician. Notes the Houston Medical Journal, “Being in a group also provides the potential for a referral network. Competition exists in every industry and the medical field is no exception. Members in a group become familiar with other doctors in the organization and stand a better chance of referrals when appropriate.”
However, the group also incurs additional expenses including recruitment costs and insurance. There could be a loss of certain spin-off referrals.
So how does a VPMA sort this out and decide if the addition of a subspecialist will really benefit the group? The use of cost effectiveness analysis (CEA) can be the tool that really helps you decide. The decision tree structure of CEA models can easily compare one set of circumstances versus the other. And in the model, one can compare the various costs and benefits of referring out vs having a sub specialist, even the ability to quantify its effectiveness or perceived effectiveness for patients in addition to the cost differences.
CEA is a flexible tool that can allow one to make better economic and healthcare decisions in a time where healthcare resources are becoming increasingly limited.
If your objective is to provide the best decision-making for your organization and take a global view of your business, expanding your sights beyond ROI, and educating other decision-makers, Cost Effectiveness Analysis can make your organization more competitive and more profitable.