Article Date: 11/1/2012

Can You Afford Not to Invest in New Technology?

Can You Afford Not to Invest in New Technology?

Forward-thinking practices look beyond upfront costs to provide the best available care.

BY DESIREE IFFT, CONTRIBUTING EDITOR

At Barnet Dulaney Perkins Eye Center in Arizona, the responsibility of determining what impact the adoption of a new vitreoretinal technology would have on the enterprise falls largely to CEO Mark Rosenberg. To decide whether the impact is positive enough for the practice to make the investment, he asks three main questions. First and foremost, based on his physicians' evaluation, does the new technology provide clinically significant benefits to patients? Second, how might the new technology affect doctor efficiency? Third, does it have the potential to increase revenue?

“If the new technology in question doesn’t meet that first criterion, it isn’t worth the investment,” he says. “Have we ever purchased a new product that’s good for patient care but not necessarily good for practice finances? Yes, but it’s never the other way around.” The second question is important to ask, Rosenberg says, because if a new technology can improve doctor efficiency in any way, even a basic way such as decreasing patient wait time in the clinic or ASC, it can have a positive impact on patients as well as the practice’s bottom line. The third question, whether the technology has the potential to increase revenue, tends to be the most complex, in part because technology can lead to improved revenue for a variety of reasons, some more obvious than others. “For example, a new piece of equipment might perform a test or support a procedure that isn’t currently reimbursed by insurance but soon will be,” Rosenberg explains. “Or, a higherresolution imaging device might increase revenue because it allows better visibility of pathology. Not only do patients benefit from earlier intervention, but surgeries that wouldn’t have been performed in the past may be added to the schedule. It would be nice if we could base every technology purchase solely on benefits to patients, but unfortunately that’s not the reality. Usually, we have to ensure at least some level of balance between that and economics.”

This brings Rosenberg to another key tenet in his approach to new technology: “Upgrade sooner rather than later.” In his experience, it’s best to keep up with incremental software advances as they emerge. “Sooner or later, the hardware will be replaced, too. If you wait until then to update, you have too big of a jump from the legacy system to the newest one.”

Rosenberg says one of the advantages of a large group practice is the ability to purchase the latest technologies to gain a competitive advantage in the marketplace. Barnet Dulaney Perkins Eye Center provides comprehensive eye care with nearly 40 doctors, including optometrists, 420 employees, 14 office locations and eight surgery centers. Providing state-of-the-art services is central to the practice’s branding strategy, and “we believe at our core that multiple doctors working together and sharing resources is the most stable business model,” Rosenberg says. “However, the process of deciding whether to invest in new technology is the same for any size practice.”

“ We believe at our core that multiple doctors working together and sharing resources is the most stable business model. However, the process of deciding whether to invest in new technology is the same for any size practice. ”

— Mark Rosenberg, CEO of Barnet Dulaney Perkins Eye Center, Ariz.

Acknowledging that early adoption comes with risks that must be weighed against rewards, he considers now one of the best times to bring in the newest technologies. “In all of medicine, we’re facing huge changes in reimbursement structure that could take various forms, such as accountable care organizations, capitated contracts or Medicare discounts, as well as a surge in volume. We may very well be living ‘the good old days’ right now. I would much rather invest in the latest technology today and get it paid for in case it’s much harder to in the near future. Not being able to upgrade when we need it most would make us less likely to withstand reimbursement changes while staying at the leading edge of care, which would be a huge competitive disadvantage.”

New Technologies are Central to Growth

In recent years, Barnet Dulaney Perkins Eye Center has been among the first to adopt several new vitreoretinal technologies, including 25+-gauge surgery (Alcon) and Heidelberg Retina Angiograph imaging systems (Heidelberg Engineering). “Both have been central to the growth in our retina segment,” Rosenberg says. The practice has also replaced four Accurus vitrectomy systems with Alcon’s newer system, the Constellation Vision System. According to the practice’s vitreoretinal surgeons, the Constellation improves the safety and effectiveness of patient care significantly. When Rosenberg and the physicians analyzed how it might affect revenue, they determined that based solely on its higher maximum cutting speed, 5,000 cpm vs. 2,500 cpm, the Constellation would increase the number of surgeries they could perform by 20%. “In our particular case, that means 1.5 additional surgeries per half-day surgery block of time,” Rosenberg explains. “Therefore, for example, if we dedicate four half-day surgery blocks per week to retina surgeries with the Constellation, that gives us an annual gross margin of $158,400. After expenses of $32,640 for those blocks of time, including the expense of investing in the technology, we realize $125,760 of positive cash flow for the year. The revenue gains are incremental depending on how many retina surgery time slots a practice or ASC can schedule.”

But what if a practice’s surgeons or an ASC reach a point where they don’t have additional surgery cases to add to the schedule? Not a problem, Rosenberg says. “Just about every retina doctor has a shortage of clinic time. If time saved in the OR isn’t spent on additional surgery cases, it can be spent in the clinic. Every additional hour per week a doctor spends in the clinic, after expenses are taken into account, creates incremental revenue gains.”

Continuously Improving Care

The process of deciding whether to upgrade to a new vitreoretinal surgery platform unfolded in a similar manner for Sunil Gupta, MD. Talking about his dual role as founder of the Retina Specialty Institute and part owner of the Andrews Institute Ambulatory Surgery Center, both in Florida, he emphasizes, “We, as a group, decided a long time ago that we wanted to be at the leading edge of technology in order to provide exceptional care, and the culture of the practice and the surgical center supports that.

“If you look only at the upfront cost associated with new technology, the tendency might be to not upgrade to new systems,” he continues. “However, like any company, to see the whole picture we need to factor in everything, such as efficiency, doctor and nurse time, surgical center time, tax credits, surgical pack price and, most importantly, margins on cases.”

As a member of Alcon’s retina advisory committee, Dr. Gupta had the opportunity to test-drive the Constellation Vision System and provide feedback during its development. Judging by those experiences, he had no doubt the platform’s unique features, aimed at improving safety, surgeon control and efficiency, were exactly what was needed to take patient care to the next level. (See “Improving Safety, Efficacy and Productivity,” on page 9) Those same features figured prominently into whether investing in the system made sense from an economic standpoint. The V-LOCITY Efficiency Components, including a simple plug-in approach to accessories, surgery packs containing everything needed for a case, and the system’s overall ease of use, all contributed to a 25% reduction in the time it takes Dr. Gupta to complete a case and a reduction in OR turnover time to 5 minutes. “With the costs of labor and overhead continuing to rise, any time we can generate the revenue from a case in 25% less time, we come out with a net positive,” he says.

Dr. Gupta points out that when a surgery center is already running at capacity, it’s crucial for its financial analysis of a potential technology upgrade to include margins per hour or block of OR availability. “If you’re at capacity and not adding ORs to accommodate a new technology, you must be able to complete more cases out of the same space,” he says. “You have to consider the labor and facility costs of each case. So it’s not only about the price of upgrading your equipment, it’s also about how long the patient is in the OR.”

The Andrews Institute Ambulatory Surgery Center is multispecialty, and surgeons perform approximately 600 cases per month in its eight ORs. Eye surgeries are performed in two of the rooms, but those rooms aren’t dedicated solely to ophthalmology. Therefore, any new surgical technology adopted by the center would be detrimental to its financial health if it didn’t increase throughput. It would be counter-productive to increase the time we spend in a room to complete a case, taking time from our orthopedic or ENT colleagues, for example, says Dr. Gupta. “The 25% reduction in case time we realize with the Constellation increases our throughput enough to make it a sound investment.”

“ Demographically, retina will always have patient volume, so whenever a better technology comes along that allows us to improve the quality of care as well as productivity, we’re always up for adopting it. ”

— Sunil Gupta, MD Founder of the Retina Specialty Institute, Fla.

With the Constellation in place, Dr. Gupta performs 20-24 cases out of the two ORs in a day that starts at 7 a.m. and ends at 4 p.m., which, as he mentions, “is a lot for retina.” The efficiency has allowed him to manage his schedule differently as well, leading to additional benefits. He now performs all of his non-emergency, prescheduled surgeries on one day every other week. “This opens up an OR for an entire day during that other week, so cataract surgeons can use it. The new schedule also gives me time to complete administrative work or take on another clinic day, where we have a higher profit margin than surgery.”

Changes for Retina Surgery in the ASC

From where Lou Sheffler sits as CEO of American SurgiSite Centers, Inc., the landscape has never been more favorable for investing in vitreoretinal technologies and services. “Reimbursement for ASCs has come more into line with hospital reimbursement, changing retina surgery in the outpatient setting from a money-losing proposition to a potentially profitable venture,” he says. “Today’s advanced technologies have contributed to making this true as well. For instance, surgery time with previous-generation vitrectomy systems was longer than with the options available today. Average procedure time in our centers where we’ve placed Constellation Vision Systems is now 30-45 minutes when it used to be an hour or two.”

For Sheffler’s company, which manages and/or co-owns several ophthalmic ASCs, having the latest equipment has always been a corporate goal. Access to the tools most likely to produce the best outcomes in the least amount of time is a powerful way to attract surgeons to the centers, he says. “Even if the local hospitals eventually follow suit, being first to have the newest options is a big advantage. Once doctors experience surgery in an ASC, they’re typically reluctant to go back to operating at the hospital.”

American SurgiSite makes technology acquisition decisions center by center based on the volume each has plus the volume each determines it can attract. In their experience, if a center is adding retina for the first time, when you need to buy all of the necessary equipment, it would need to perform 150 retina cases a year. “You would likely need two or three surgeons to reach that volume level, but it would allow you to break even and then you can grow from there,” Sheffler says. Paying attention to certain surgeon dynamics can sometimes help with volume by facilitating smart scheduling, he adds. “We’ve noticed that while most cataract surgeons prefer to get an early start each day, many retina surgeons don’t mind operating in the afternoon. So, if your cataract surgeons are finishing by 1 p.m., you might have trouble finding another cataract surgeon to fill the remaining slots, but you may find a retina surgeon to use the time.”

American SurgiSite Centers has been busy looking into what it considers today’s best new vitreoretinal technologies. Along with upgrading to the Constellation in several centers, it has outfitted all facilities with OPMI Lumera surgical microscopes (Carl Zeiss Meditec). “Compared with the previous scopes, these have integrated features, such as automatic uprighting of the image, that make work more ergonomic and efficient for the surgeons,” Sheffler says. “They are great for retina and cataract surgery, and taking advantage of a trade-in program helped with the switch.” Sheffler and the surgeons he works with also see the Stellaris PC combined anterior/posterior segment surgical system (Bausch + Lomb) as a promising upgrade that also looks good financially.

Change is Worth the Effort

Staying on the cutting edge of technology definitely comes with challenges, Dr. Gupta says, but the challenges are manageable and worth the effort for the sake of patients and the practice. “All of the doctors need to be on board with any new technology before the investment in order to create whole-team buy-in,” he says. “And the more upfront training that is done for doctors, nurses, supply staff, and so on, the more the ‘trauma of transition’ is minimized. During any technology transition, we make sure the last generation technology is close by in case anything arises with the new systems or protocols that we aren’t able to troubleshoot on the spot.”

Health care is an ever-changing field, Dr. Gupta notes. “The reality is we need to be able to cope with whatever the next phase is, still be able to take great care of our patients and have financially viable practices,” he says. “Demographically, retina will always have patient volume, so whenever a better technology comes along that allows us to improve the quality of care as well as productivity, we’re always up for adopting it.” ●



Retinal Physician, Issue: November 2012, page(s): 4 - 7