Founder of ACLP’s new Quality & Safety SIG, David Kroll, MD, director of quality and safety for the Psychiatry Department at Brigham and Women’s Hospital, leads new thinking on business issues in occasional articles for ACLP News.
Volume of clinical work done “probably isn’t the best method”
A consultation-liaison psychiatrist’s productivity, i.e., the volume of clinical work done per month or year, probably isn’t the best way to measure his or her overall value to a hospital system. Volume does not equal quality, and the successes of psychiatric care delivery models that do not rely on traditional productivity measures, such as collaborative care and proactive inpatient consultation, are hard to ignore. Consultation is only half of the job, after all—as the name of our organization now reflects. Yet most of us seem to be stuck with productivity measures in some capacity.
The truth is, C-L psychiatry service directors need to have some way of accounting for the work that their clinical staff do. This isn’t because C-L psychiatrists can’t be trusted to show up for their shifts and see patients—although ensuring that hired staff fulfill their contracts is, sadly, an important part of running a service. There are many good reasons to account for the work that’s done, but perhaps the most important is that allocating resources and lobbying for more resources require objective data. Clinical productivity is one way to represent that data, and the fact that it is (usually) readily available, coupled with another fact that correlates (imperfectly) with revenue, makes it uniquely attractive for this purpose.
But how exactly does one set a productivity target? When you look closely, it’s hard to avoid some arbitrariness. In theory, assuming money is important, the clinical productivity expected of a full-time clinical staff member should generate enough revenue to cover that staff member’s costs (i.e., salary, benefits, and other fringe costs), whereas anything above that is bonus (for someone). This is how a pure private practice works, and hospital departments in revenue-generating specialties may approximate this formula when constructing their own targets. But reimbursement for services is rarely guaranteed, it is rarely equal across locations and insurance carriers, and it is consistently lower for psychiatric care compared to other specialties. It would be hard to make this work for a C-L psychiatry service.
Before we go further, I want to make sure that the definition of an RVU, or “relative value unit,” is clear. An RVU is a standardized representation of the cost of a medical service used by Medicare, and it has three components. The component most clinicians are familiar with is the “work RVU,” which corresponds directly to the billing code (or codes) that a clinician submits with each encounter. The other components, which represent practice expenses and the costs of liability insurance, are determined by factors beyond the individual staff clinician’s control and can be put aside for the purposes of this article, but the three components are ultimately plugged into an algorithm that determines reimbursement by Medicare, based on Medicare’s fee schedule for that year. Although insurance carriers other than Medicare have their own fee schedules that do not rely on RVUs, hospital systems will often use RVUs as a proxy for overall clinical productivity and, by extension, expected revenue.
In many specialties, it is common to set an RVU target based on the expected revenue compensating for the costs of the clinical staff member. But such a target would be extremely difficult for a C-L psychiatrist to meet. Unlike transplant surgery, for example, C-L psychiatry is typically a “cost center” rather than a “revenue center” in the business of health systems—meaning it loses money, and the “business” chooses to “invest” in it for reasons other than generating revenue (there are non-monetary reasons to “invest” in transplant surgery, too, but I hope you get the point). The RVUs generated by a C-L psychiatrist will rarely be sufficient to offset costs.
Another way to determine a work RVU target is to consider how much clinical work you expect the psychiatry staff to do. If you think that a psychiatrist should staff two new consults and two follow-up encounters per half-day shift, for example, you could simply look up the Medicare fee schedule and add it up for the year: [(2 * 3.29 (RVU for initial consult code 99254)) + 1.39 (RVU for follow-up code 99232)] x 8 (number of half-day shifts per week) x 48 (number of weeks on service) = 3594.24 for each full-time staff member (or full-time equivalent). If you wanted your staff to spend more of their clinical time teaching or doing liaison work, you would set the bar lower; and you could set it higher if you wanted them to see more consults.
A third way is to use a standard reference, such as a compensation survey from the Medical Group Management Association (MGMA) or the American Medical Group Association (AMGA). MGMA and AMGA conduct annual surveys of health systems across the United States and report median compensation and work RVU targets by specialty. Just keep in mind that if you use a standard reference, the median work RVU target in the US, or any other location, may not be realistic everywhere, and may not reflect the priorities of your service. It’s also common for psychiatry departments to set different targets for different clinical services, which may not be apparent in the survey report.
In the end, C-L service directors should consider a number of factors in setting productivity targets for their staff. Some of it will be arbitrary, and there will always be tradeoffs. But if you can find a way to throw out clinical productivity tracking altogether, let me know—I’ll probably want to come work for you.