The US Supreme Court

Posted on January 11, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Denies GA Hospital Peer-Review Case

Staff Writers

According to Gregg Blesch of Modern Healthcare, the US Supreme Court just declined to review a case that hospitals hoped would clarify whether federal courts must defer to state laws protecting the confidentiality of peer review. 

The 11th U.S. Circuit Court of Appeals ruled in June that peer-review records should be fair game for a urologist attempting to prove he was the target of racial discrimination at 186-bed Houston Medical Center [HMC] in Warner Robins, GA.

HMC appealed to the Supreme Court. No federal law provides a privilege for hospital peer-review, yet all states have laws that protect the confidentiality hospitals say they need in order to foster the participation and candor crucial to identifying and addressing mistakes. 

And so, have you ever been on a hospital peer-review panel, and what are your thoughts on this case regarding privilege and confidentiality?

Related information: http://www.jbpub.com/catalog/9780763733421

Filed under: Health Law & Policy | Tagged: | 1 Comment »

Medicare Prescription Drug Benefit Outcomes

Posted on January 11, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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Annals of Internal Medicine [AIM] Study on Part D

[By Staff Writers]body

The AIM recently reported from its online survey that Medicare Part D induced a 13.1 % decrease in out-of-pocket expenses for patients and a 5.9 % increase in prescription drug use.

The study compared out-of-pocket costs and the number of pills purchased by those who were eligible for Part D – with comparable patients who were not. It also compared Part D members to patients who were eligible for, but did not enroll in, Medicare Part D.

The program saved pre May 15, 2006 members about $6 per month and gave them an extra three to four days worth of one medicine per month.

After the enrollment deadline, average savings among all eligible seniors increased to about $9 a month with 14 extra days of medicine per month. The study also found that patients who enrolled early in the Part D program and higher rates of utilization and out-of-pocket costs prior to the Part D period and stood to benefit most from enrollment.

Assessment

And so, what are your thoughts on these results, first reported by Newswise on January 8, 2008?

Conclusion

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Filed under: Drugs and Pharma | Tagged: | 2 Comments »

Maximizing Medical Practice Value

Posted on January 11, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Basic Business and Economic Concepts

[By Dr. David E. Marcinko; MBA, CMP™]

There a several interesting managerial concepts that all physicians should know in order to maximize medical practice value or business entity transfer worth. 

For example, when having a medical practice appraised, be sure to include the Discounted Cash Flow [DCF] method of valuation to estimate practice value. This method consistently produces higher values than some others, but recall USPAP edicts.  

Now, consider these three other operational concepts listed below: 

1. Practice Revenue: 

Can the practice and local market support adding additional providers such as physicians or mid-level providers? Providers usually take two to three years to ramp up their practice before they begin to significantly contribute to the bottom line.  Generally, adding a mid-level provider will produce a greater impact on value, as their compensation levels are lower than physicians.

Also be sure to consider:

· What future provider productivity is expected?

· Does the practice plan to offer new services?

· Is the current practice fee schedule at market rates?

· Is there an opportunity for fee increases?

· Is there an opportunity to improve payer mix? 

2. Practice Costs:

Perform the following cost reduction strategies to the extent possible:

· Eliminate any unnecessary practice expenses and identify unusual, non-recurring costs.

·Eliminate any physician-related costs not likely to be paid by a potential buyer.

· Eliminate any special perks of business ownership.

· Adjust for any over-inflated salaries of relatives and eliminate unnecessary salaries. 

3. Physician Compensation – An Inverse Relationship to Value: 

Although physician compensation must be based on market rates, fair market value is a range and not a discrete number or dollar amount. And, practice value correlates directly with the net cash flows available after all practice expenses including physician compensation, are considered.

· As a consequence – the higher physician compensation – the lower practice value.

· And conversely, lower doctor compensation produces a higher practice value.  

For example, as little as a $10,000 swing in salary can have significant impact to value, and as physician compensation rises, practice value falls. 

Assessment

Were you previously aware of the above, or the important inverse value relationship between practice value and salary; please comment and opine? 

Conclusion

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