Mind Your Business: How to Get the Financial Resources and the Administrative Support for Your Innovation

Diabetes Care_Mehta

It helps to be able to “talk the talk” and make the business case as well as the clinical case for new expenses.

Healthcare is one of the sectors where technical innovation is taking place at a break-neck pace. A practice that is slow to adapt will be slow to catch up to an everchanging landscape of evolving technology and methods. Unfortunately, technology comes at a price, and that price might not always be enthusiastically embraced by administrators. In “Making the Business Case for Your Innovation,” Anand Mehta, MD, of the University Healthcare Alliance/Stanford Healthcare, in Hayward, Calif., dispelled the myth that good healthcare and cost-effectiveness cannot coexist. Coming toward the end of the session, Mehta was able to refer to some of the innovations already discussed, such as the value of e-consulting or bringing a pharmacist into the practice, to make his point. “A lot of good ideas were presented, and as we thought about these ways to innovate care, we realized too that because most of us are employed practices, rather than solo practices, we need to show the value to our administrators,” Mehta says.

Making the business case becomes critically important in an employed practice. Physicians and administrators generally have two very different — sometimes even opposing — perspectives. When a physician wants to implement an innovation, a financial administrator is not likely to just give the green light. “They’re going to look at the numbers,” Mehta says, “and want to know why is this relevant and how will it help us.” Physicians, on the other hand, are first and foremost trying to help patients. “So, how do you try to convince your administrators that spending money on an innovation is a financially worthwhile endeavor? They are looking at the institution and where it’s most feasible to spend dollars.”

Mehta, a former investment banker, has special insight into just how an administrator would look at the problem. “After finishing my medical training,” he explains, “I had the sense that medicine was going this way and wanted to learn a little business.” As he was deciding whether to pursue a master’s degree in business or just how to integrate finance with medicine, he was offered a position at a biotech investment bank, where he was able to use his scientific knowledge while learning the business side of things.

“A physician’s lens typically is what’s most important for the patient, independent of expense. Maybe that’s changing a bit now with some of these overpriced medicines, but, typically, it’s what’s best for the patient, and cost is not an issue. The administrator, however, looks at what it’s going to cost and possibly finding a cheaper alternative.” — Anand Mehta, MD, University Healthcare Alliance/Stanford Healthcare, in Hayward, Calif.

“With this background, I’m regularly going toe to toe with our finance people and sometimes surprising them that I can actually talk their talk. I understand what metrics they are looking at, and my metrics are patient outcomes and patient care,” he says. Merging those metrics is not only possible, making all involved parties happy, but incidental benefits accrue as well. Being financially savvy will allow physicians to grow their practices, for example.

Through the Numbers

Mehta wants to get the message out there that this is an important skill to learn, and going through the basics of a business plan was the gist of his presentation. “What types of things do you need to put together to walk over to your administrator and, number one: be taken seriously; and number two: have them buy into this program? For any one of these scenarios presented, we would ask, ‘How much does it cost? How do we bill for these services, and what does that look like? Why is this valuable from a financial standpoint?’,” he explains. What inspired Mehta’s presentation was his own successful care innovation that happened four years ago. He wanted to implement continuous glucose monitoring, but his administrators were initially against the idea. He spent a few months pulling together a clinical business plan to present but was still initially turned down. “The glucose monitoring was a very straightforward kind of analysis, but maybe because they weren’t used to seeing the numbers put down this way; they were not seeing a return on investment,” he says. “Our job is to guide our colleagues into knowing what to look for. Okay, how much does each continuous glucose cost to buy, how much does the sensor cost, how much does the reader cost, how many do you need, how often do you need to buy new ones? So, we take them through the numbers.”

After doing just that, Mehta’s plan got approval, and, within a few months, he was able to demonstrate that the glucose monitors would pay for themselves. “The key is knowing what you’re looking for and setting up the parameters, basically,” he says. “How many glucose monitors do you need to buy, how much time is devoted to this, how many patients do you need to use the glucose monitors?”

Talk the Talk

According to Mehta, it helps to be able to speak the language that an administrator will understand. “Again, a physician’s lens typically is what’s most important for the patient, independent of expense,” he says. “Maybe that’s changing a bit now, with some of these overpriced medicines, but, typically, it’s what’s best for the patient, and cost is not an issue. The administrator, however, looks at what it’s going to cost and possibly finding a cheaper alternative. Each point is valid, especially nowadays.” Of course, a big part of this is finding out the healthcare reimbursement codes and the reimbursement rates. Mehta says that his practice regularly does these kinds of analyses, recently for a diabetic retinal camera. “The key is learning to present the financial merits in addition to the clinical benefits,” he says, adding that it’s vital to learn how to address the key issues “from an administrative standpoint regarding whatever innovation you’re trying to implement as well as learning to talk the talk of the other party.”

Lest this seem daunting, Mehta has good news: In addition to delegating some of the legwork, such as researching those all-important reimbursement codes and other relevant pieces of the puzzle, innovation for your innovation is on the horizon. “The Endocrine Society is working to put resources together to assist doctors in preparing an understandable business plan,” he says. “We’re looking to post an online calculator that you can input how much piece X costs to buy and how much you would charge for it, and it will tell you your internal rate of return.”

— Horvath is a freelance writer based in Baltimore, Md. She wrote about new obesity research from ENDO 2019 in the October issue.

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