Evaluation of economic efficiencies in clinical retina practice: activity-based cost analysis and modeling to determine impacts of changes in patient management

Abstract

BackgroundThe purpose of this study is to report the use of activity-based cost analysis to identify areas of practice efficiencies and inefficiencies within a large academic retinal center and a small single-specialty group. This analysis establishes a framework for evaluating rapidly shifting clinical practices (anti-vascular endothelial growth factor therapy, microincisional vitrectomy surgery) and incorporating changing reimbursements for care delivery (intravitreal injections, optical coherence tomography [OCT]) to determine the impact on practice profitability. Pro forma modeling targeted the impact of declining reimbursement for OCT imaging and intravitreal injection using a strategy that incorporates activity-based cost analysis into a direct evaluation schema for clinical operations management.MethodsActivity-based costing analyses were performed at two different types of retinal practices in the US, ie, a small single-specialty group practice and an academic hospital-based practice (Bascom Palmer Eye Institute). Retrospective claims data were utilized to identify all procedures performed and billed, submitted charges, allowed charges, and net collections from each of these two practices for the calendar years 2005–2006 and 2007–2008. A pro forma analysis utilizing current reimbursement profiles was performed to determine the impact of altered reimbursement on practice profitability. All analyses were performed by a third party consulting firm.ResultsThe small single-specialty group practice outperformed the academic hospital-based practice on almost all markers of efficiency. In the academic hospital-based practice, only four service lines were profitable, ie, nonlaser surgery, laser surgery, non-OCT diagnostics, and injections. Profit margin varied from 62% for nonlaser surgery to 1% for intravitreal injections. Largest negative profit contributions were associated with office visits and OCT imaging.ConclusionActivity-based cost analysis is a powerful tool to evaluate retinal practice efficiencies. These two distinct practices were able to provide significant increases in clinical care (office visits, ophthalmic imaging, and patient procedures) through maintaining efficiencies of care. Pro forma analysis of 2011 data noted that OCT payments to facilities and physicians continue to decrease dramatically and that this payment decrease further reduced the profitability for the two largest aspects of these retinal practices, ie, intravitreal injections and OCT retinal imaging. Ultimately, all retinal practices are at risk for significant shifts in financial health related to rapidly evolving changes in patterns of care and reimbursement associated with providing outstanding clinical care.

The Impact of Ultra-widefield Retinal Imaging on Practice Efficiency

“…1 We found that the small group practice outperformed the academic medical center on nearly all markers of efficiency.…”

Human Factor and Usability Testing of a Binocular Optical Coherence Tomography System

“…Historically, eye examinations in hospital eye clinics have been fragmented, inefficient, and costly. 4 – 6 , 8 The binocular OCT prototype combines many routine tests into one single instrument, with the aim of improving the speed and efficiency of patient flow, in addition to providing reproducible and quantitative data for several aspects of the eye examination. Designed as an automated, patient-operated device, usability testing is indispensable to predict the likelihood of future successful implementation in eye clinics.…”

“…3 Although reasonably quick and safe to perform, the costs involved with operating OCT devices are not trivial. 4 , 5 Commercial devices are expensive to purchase, and the costs of associated labor to capture the OCT scans are even greater. 4 The requirement for OCT and other imaging also places increasing demand on ophthalmology clinics, with fragmented patient pathways and often extended waiting times.…”

“… 4 , 5 Commercial devices are expensive to purchase, and the costs of associated labor to capture the OCT scans are even greater. 4 The requirement for OCT and other imaging also places increasing demand on ophthalmology clinics, with fragmented patient pathways and often extended waiting times. 6 , 7 Clinic efficiency has recently been reported to improve by stationing all necessary tests for the visit in one location, minimizing the time patients spend moving around and waiting.…”

Imaging in DRY AMD

“…For wet AMD, OCT is frequently preferred to FFA in assessing the efficacy of therapeutic strategies due to its non-invasiveness. OCT is also used as a screening tool to exclude the presence of wet AMD [40,41]. Combining SD-OCT with FAF or NIA images, enables the correlation of the topographic distribution of GA with cross sectional alterations in real-time [42,43].…”