Lovelace Family Medicine

October 1, 2005

Crushing debt and maxed-out physicians threaten this rural practice.

Practice is Stretched, Saddled with Debt, and Needs More Clinicians

The physicians of Lovelace Family Medicine are on a mission - literally. Five physicians who once worked in the practice now work full-time as foreign missionaries. A sixth just cut back his hours because he is in seminary training to become a missionary.

The practice's founder came to rural South Carolina, according to Dave Carlson, a CPA who works with the group, when a preacher told him to "go where no one else would go and do what no one else will do."

You can feel the passion when staff speak about providing for the rural poor here in the ironically named town of Prosperity. Then Chip Dixon, MD, a practice owner, chimes in grimly, "Unfortunately, you have to make the business side work."

Indeed.

Lovelace Family Medicine carries over $1 million in debt, and costs are high. "In four years, my malpractice [premium] has gone up 400 percent," says Dixon, who wonders if he'll be able to keep providing obstetric care.

Physicians and staff feel overworked, stressed out, and worried. "The work gets done," says Dixon, "but it's a matter of do we get sleep in the meantime." To meet the needs of its rural patients, the physicians do it all - they're visiting nursing homes, performing colonoscopies, doing surgical obstetrics, and offering DEXA scans. That means high overhead and long hours mostly compensated by low-paying Medicaid and Medicare.

Lovelace needs to change course to keep living up to its mission - starting with lightening the load of its overburdened physicians.

Regaining balance

The schedule at Lovelace is jam-packed. Pap smears are scheduled three months out. The few appointments left open each day for acute issues fill by 9 a.m.; everyone else gets double-booked or pushed off the schedule.

Schedulers try to fit urgent cases into any available appointment, regardless of the type of appointment they need. Office manager Linda Kinard points out that on their "on call" days, physicians expect to see about nine of these patients on their schedule at the start of the day. Instead, these days, it's typical for them to see 13 patients before noon.

To make matters worse, provider hours are dropping. The seminarian is working less than half time. Another physician dropped to 70 percent of a full schedule after the birth of her daughter. The practice's very busy founder, Oscar Lovelace, is starting to cut back hours as he prepares to run for governor in 2006. By then, the practice will be down two experienced physicians. A new physician is expected to join up this fall, but it'll take him some time to get up to speed. The physicians left are frustrated by "unreasonable schedules," says Dixon, who worries that the diversity of services the practice offers further complicates things.

Shore up scheduling

Some changes to simplify scheduling are in order. Instead of specifying appointment "types" - gynecology, chronic medical conditions, physical, and so on, specify just long (30-45 minute) and short (10-15 minute) appointment slots. There could be one longer slot (60 minutes) as well. Staff will still want to ask about and note the patient's key problem so the exam room can be properly prepared, but they'll spend less time finding just the "right" slot.

Here are some other scheduling possibilities:


Try modified wave scheduling, where one short visit overlaps with a long visit. The physician handles the short visit while the longer visit is still getting started - for example, with an RN weighing, taking a basic history, and checking blood pressure on a patient in for a longer physical. That means more patients seen per hour with no real additional strain on people.

Consider advanced access. Busy family practices with a high demand for acute appointments are great candidates for advanced access scheduling. In this model, the practice opens all appointments to same-day or next-day appointment requests. There is far less phone-based triage, less trying to decide if a patient is "sick enough" to merit an acute slot, fewer angry calls to return. No-shows are reduced as patients come in almost immediately after they call for an appointment: their need is still high, and they are unlikely to forget.

This model will work only if the practice's demand remains consistent over time - that is, if wait times were about the same this time last year as they are now. The practice, of course, would have to put in some long hours over the course of a few months, and possibly recruit a locum tenens to work down the backlog. But after that, advanced access is a real possibility.

At the very least, the practice should measure demand for same-day appointments over a three-month period. Armed with that data, the group can leave open slots in each day's schedule to accommodate at least 80 percent of the average demand instead of double-booking or putting off sick patients.

Deliver more babies?

It may seem counterintuitive in an overburdened practice, but our advice is to keep the service diversity Dixon worries about - it helps the bottom line. Colonoscopies and surgical procedures pay better than more standard family practice fare and provide a great service for the community. That's what it takes to keep this group of physicians motivated. Many family practices are expanding to include things like hearing tests and radiology in their repertoire.

Even surgical and nonsurgical OB can be a win for this practice, despite the high malpractice costs. "Because of malpractice, initially three physicians did OB, then it went down to two. Now we're down to one," says Dixon, who'd save about $40,000 a year if he dropped his OB malpractice coverage. He also nixed the idea of the new physician handling OB cases to save on costs.

Still, Carlson estimates the practice breaks even on OB. Its 35 or so deliveries per year bring in nearly enough revenue to cover the malpractice costs. It's discouraging, of course, to have to deliver 35 babies before seeing a profit. But the solution is to deliver more babies, not to cut a service the physicians seem to love doing and that the community needs.

Lovelace already does surgical deliveries for another practice that will only do nonsurgical OB. Why not consider striking a deal with the primary-care practices in the region: they'll drop their OB malpractice coverage (which has probably crossed their minds already) if they can send their OB patients to Lovelace. More of these patients will help make the malpractice costs worthwhile.

The practice could maintain coverage on just one physician, depending on the volume. Have the new physician do the colonoscopies, for instance, while Dixon focuses on OB, where his years of experience will be vital.

Add clinical staff

When the newly recruited physician starts, the practice will have about three to 3.75 full-time equivalent physicians, depending on how quickly the new fellow comes up to speed - and how quickly the founder steps back. With a reported patient base of 15,000 patients (that's about 4,000 patients per physician, or more than 3,000 patients per provider, counting the two half-time NPs), it's no wonder physicians at Lovelace feel overwhelmed. Most experts cite 2,500 as the ideal panel size for primary-care physicians. No amount of efficiency can make up for not having enough physicians to meet demand.

Lovelace should probably recruit another physician or nurse practitioner in 2006. With the high demand, the practice should be able to make more than enough revenue from another provider to cover the related costs.

Manage no-shows

Lovelace has tried charging patients for no-shows, to no avail. Improving access with changes to scheduling will help. But given that the practice's patient population also sometimes lacks reliable transportation and childcare, it might be worth calling some of those no-shows to find out if these issues are, in fact, contributing to the problem. If so, Lovelace may consider arranging for discounts at a nearby daycare center or taxi service, or even asking a retired patient if they'd like to make a little extra money offering rides to patients who can't otherwise get in. The patients would have to contact and pay the driver themselves, but the practice could let patients know about this service with signs in the office, notes on bills, or by mentioning it during reminder calls.


Speaking of reminder calls, consider changing the message of these. Instead of just reminding patients that they have an appointment, explain that their provider thinks it's important that they make it in for their continued health and that the practice looks forward to seeing them. Sometimes patients don't realize they will be missed if they don't show. Make it personal.

Rein in phone chaos

All of the changes suggested so far should help ease the workload, but the staff will still have lots of calls to answer - about 2,000 a day. A nurse dedicated to taking triage calls often has them stacked four deep, and many are repeat calls from angry patients who feel they haven't been dealt with quickly enough. Nurses also spend time placing outgoing calls to local pharmacies for refills.

The practice tried an automated attendant, but the elderly patients complained, and more patients actually ended up at the ED instead of the clinics when they "couldn't reach" the practice.

To reduce the number of incoming calls, solve patients' problems and questions before they become phone calls. For example, to cut down on calls related to refill requests, physicians need to refill prescriptions when patients come in, and have the patient take the script to the pharmacy in person.

Some calls will still come in for refills, of course, but it's wasteful to wait on the phone to talk to a pharmacist, especially when the practice's EMR has an e-prescribing module. The stumbling block is that local pharmacies claim they won't accept electronic signatures. Solution: Estimate how many prescriptions you send each pharmacy and the resulting revenue to them. Arrange a meeting with the lead pharmacist and manager and tell them that you expect them to take your e-prescriptions. They don't have to accept the actual EDI (electronic data interchange) - the pharmacy just needs to be willing to take a prescription by fax. On the practice's end it feels like e-prescribing - one click and they're done. To the pharmacy, it can still look like a fax.

To reduce repeat calls, set patient expectations clearly. If, for example, the practice knows a refill request won't be filled by the pharmacy for two days, tell the patient that. Similarly, let patients know when they should expect the physician to call them back so they aren't sitting by the telephone waiting.

Triage calls will decrease if the practice goes to a more open scheduling model. Another solution is to track for a few weeks why patients are calling - then do what you can to educate them about those issues before they call, say, in the form of a handout or a checklist of topics physicians should cover with patients who have certain diagnoses.

Cut a better deal with payers

From a coding standpoint, Lovelace does a great job getting its fair due from payers. Its physicians tend to spend more time and provide more services to patients than the norm, and their coding justly reflects that - 99215 accounts for 13 percent of the practice's 10 most frequently used codes.

According to Carlson, the practice has even managed to defend itself against queries from Medicare about its coding profile, thanks in large part to the careful documentation provided by the practice's EMR.

However, when it comes to allowables, the practice isn't doing as well. As a rural provider, Lovelace will be the only one who can provide the services it does to the payer's beneficiaries, so there's some negotiating clout with commercial payers. If negotiating better allowables is a success, adjust the fee schedule upward. Right now, all of the practice's fees are at or just above Medicare's rates. And no practice should charge a payer less than the payer is willing to pay.

Climbing out of debt

Changes like new scheduling templates or tracking no-shows will certainly have an effect on the day-to-day, and will likely help financially. But the practice has an even bigger, more long-term struggle: a tremendous debt load.

"We struggle with cash flow every single day," says Carlson.


The majority of the practice's debt hasn't been caused by ongoing losses, but by a single catastrophe. In the late '90s, Lovelace signed an agreement with a local hospital to reorganize as a teaching practice. It constructed a new building, hired and started paying faculty, even bought an EMR. Then the hospital merged with a larger business, started losing money, and eventually jettisoned the signed agreement, leaving Lovelace holding the bag. The faculty left when asked to go on a production-dependent salary (it's just as well) but the practice still took a big hit.

"We joke that we were going to write a book on how to succeed in the medical profession but could not get past Chapter 11," Carlson laughs.

Lovelace has tried to get better loan terms but "$300,000 to $500,000 is very difficult to find when you have not shown a profit," Carlson points out. Lenders are being stingy with all practices these days. Carlson is hoping a few individuals will come forward willing to take up the practice's debt on nontraditional terms.

In the meantime, "we're paying it down one CBC test at a time," Carlson says.

That is really the best thing the practice can do. If the dent is deep enough after such a major disaster, it can make sense to declare bankruptcy, but if the practice can pay the debt down, it should.

Be more business-like

Dixon reports that some physicians in the practice, while much loved, aren't always the best business people. One consistently shows up an hour later than his first scheduled appointment. Another visits patients at the nursing home but neglects to document her visits - even as much as 18 months after the fact. The practice either doesn't bill for many of these visits, or files claims only to have them denied for untimely filing.

It's hard to "discipline" your peers but this lax approach can't continue if the practice is going to climb out of debt and stop feeling the constant scramble. The best option is to have a physician-only, heart-to-heart talk. Start by defining what the practice wants to accomplish, from the standpoint of patient service and financial stability. Establish a shared vision. Then make it dead clear how poor business practices impede that mission. Everyone needs to see when and how they are hurting their colleagues and the overall success of the practice.

If that doesn't work, the practice will have to get tough: Don't schedule any patients with the late physician until after he shows up. Take the other physician out of the nursing home. It's time to get serious. The physicians owe it to themselves and to their patients.

Pamela Moore is senior editor, practice management, for Physicians Practice. If you'd like your own practice makeover, write to her at pmoore@physicianspractice.com.

This article originally appeared in the October 2005 issue of Physicians Practice.