Oncology Economics 101
Teri U. Guidi, MBA, FAAMA
President & CEO
Oncology Management Consulting Group
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What is Benchmarking?
• A tool/process to compare your
practice/program with regional or national
standards and/or with itself, and to
evaluate performance over time
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Creating Benchmarks
• Benchmarks and gauges are created
using objective measurable data elements
to describe “something per something”
Work Factor
Capacity Factor
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Creating Benchmarks
• The Work Factor is generally a measure of work
production and is measured in terms of
– Procedures delivered
– Revenue earned
– Cost incurred
• The Capacity Factor is either a measure of capacity to
produce clinical work or the time necessary to produce
units of work
– Generally measured in resource terms, i.e. full time equivalent
(FTE) positions or infusion chairs
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Why Benchmark?
• To improve productivity and performance
– Discover potential work flow and/or staffing
efficiencies
• Lower the cost of operations
– Better inventory control
– Improve patient scheduling
– Streamline work flow from clinic to billing office
• To provide more time for clinicians to spend on
patient care
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Benchmarking
• Use measurement and comparison to improve
productivity and performance
• Make it a priority
– Decide what’s important for your practice/program
• Works best when
– The practice/program has an accepted set of strategic objectives
– The practice/hospital supports sharing of information and
decision making
– The practice/hospital uses data-driven decision-marking
processes
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Benchmarking
• Benchmarking is about both identifying the
right questions and getting answers
• Be strategic – don’t measure something
just because it is measurable
• Identify
– What you will measure
– How frequently you will measure
– How you will present the findings and to
whom
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Benchmarks & Gauges
• Benchmarks
– Data points for periodic checkups
– They measure the direction of your overall business;
use them annually or semi-annually
• Gauges
– Use for regular monitoring and review
– They measure the effect of changes you make in your
operations; use them quarterly to keep on track
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Things to Measure
• Sample Benchmarks
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New patients / FTE physician
Total FTE staff / FTE physician or chemo chair
Total revenue / year or new patient
Medical revenue / FTE billing staff
Tasks / paid productive hour
• Sample Gauges
– Days in A/R
– Drug expense / month
– Revenue collected / month
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ph 215.766.1280 • solutions@oncologymgmt.com
Benchmarks & Gauges
• Some metrics can be both benchmarks
and gauges
– Drug cost / FTE physician or patient group
– Drug margin / FTE physician or treatment
– Drug margin / Drug cost
– Physician services revenue / FTE physician
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How Do You Measure?
• Informal benchmarking
– Conversations at meetings, visits with colleagues, listservs
(AOHA, ACCC, others)
• More formal
– Find and use a standard
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Oncology Metrics National Practice Benchmark
Oncology Circle
MGMA’s Cost survey
State society or national organization surveys
A benchmarking collaborative or membership
Oncology publications (JOP, OBR, HONI, ACCC)
• Most important
– Benchmark your practice/program against itself over time
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Practice Tools
• Procedure Productivity Report
– From the practice management system
– Use for virtually all productivity measures
• CPT codes
• Units of service
• Collected revenue
• Financial reports
– Income, expenses, cost of drugs, etc.
• HR records
– Full time equivalent (FTE) positions
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Procedure Productivity Report
• Most benchmarking data comes from the practice
management system
• All practice management systems produce some
type of procedure productivity report (PPR)
– This report shows the CPT codes the practice has billed
for a specific time period
– Most practices generate this report monthly and can
produce the report for the practice as a whole as well as
for individual providers and/or locations
– Many vendors can also develop custom reports
• Caution: this can be very costly
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Procedure Productivity Report
• Many practice management systems default to
producing units and billed charges
– You may need to adjust the standard options to get
more meaningful data
– If possible, report on total units and revenue
collected, not billed charges
– For most analysis, you only need the summary for the
entire practice and do not need individual provider or
location details
• One exception is physician/provider productivity analysis
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Procedure Productivity Report
• Use your PPR to find the number of units
billed and revenue collected for things like
– E & M services including the number of new
patients
– Drug administration services
– Volume and revenue from drugs
– Imaging services
– Total revenue, all services
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Working with the PPR
• Using data in spreadsheet format, group CPT
codes into standard categories
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Provider services (E & M codes)
Pharmacy services (J codes and others)
Infusion services (drug administration codes)
Laboratory services
Imaging services (if applicable)
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Hospital Tools
• Procedure Productivity Report
– From the billing system
– Use for virtually all volume measures
• CPT codes
• Units of service
• Financial reports
– Income, expenses, cost of drugs, etc.
• HR records
– Full time equivalent (FTE) positions
• Tumor registry
– Case counts
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Limitations for Hospitals
• Too difficult to gather and calculate internally
• External options may:
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Be inpatient and outpatient combined
Be general rather than specific to oncology
Be RVU based
Definitions are not always clear
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What exactly is a “TWU?”
What counts as a “procedure?”
What is “FTE?”
What is included in a “service line?”
– Method of creating the benchmark is not always known
• Formal survey?
• Informal survey?
• Data submission?
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Common Frustrations
• Once and done
• Calculating one’s own performance in the
same terms as the benchmark
• Often expressed as “per adjusted
admission” or “per adjusted patient day”
• Often uses DRGs to sort data
• Complicated process
• All I want to know is…
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Sources for Hospitals
• Solucient Action OI
– Across the hospital
– Fed by intense annual survey completion and
automated data submission from other
departments
– Intended for use each pay period
– Focus on staffing budget performance
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Sources for Hospital Oncology
• Oncology Roundtable
– Once and done
– Fed by interviews and/or solicited data
– Chosen to support the Roundtable’s annual
agenda
– Sometimes unclear “n”
– Member must calculate own performance to
compare
– Focus varies
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Sources for Hospital Oncology
• The Oncology Business Institute
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New in 2011
Oncology specific and by oncology experts
Infusion, radiation, registry, support services
Fed by simple annual survey and automated data
submission from other departments
– Ensures good data with start up coding and billing
audit tool
– Calculates member’s performance and compares to
others
– Focus on staffing, volumes, financials
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Questions?
• Teri U. Guidi, MBA, FAAMA
President & CEO, Oncology Management
Consulting Group
tguidi@oncologymgmt.com
215-766-1280
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