Case Study: Cooperstown Medical Associates
In March 12, 2015, the for-profit business, Cooperstown Medical Associates (CMA) was founded in southeastern Michigan. Stock ownership is distributed among five doctors. Four own 15 percent each, and one owns 40 percent. CMA currently offers urgent care services in three locations-at the main facility in Cooperstown, 45 miles south of town in Riverdale, and 30 miles east of the main facility in Monaco. Although emergency care is not offered, routine ambulatory care services are available by appointment and on a walk-in basis.
The Cooperstown Main facility was opened in 2015 when the company was founded. They offer a full range of non-emergent care services for private patients as well as occupational health services for employees and potential employees of local businesses. The Riverdale facility which opened in 2017 is much smaller and serves only private patients (i.e., patients not referred by an employer), as it is in a more rural area. The Monaco facility, which opened in 2019, is larger than Cooperstown main also offers care for private patients and occupational health services.
CMA provides on demand care for patients with urgent but not emergency medical issues but does not provide continuity of care or chronic illness care. Patients who are treated are referred to outside physicians for follow-up and specialized treatment.
The highest operational priority for each of the three facilities is patient satisfaction. They aim to provide efficient care in the community for private patients and contracted businesses.
Patient Services:
Occupational Health Services:
Part of the occupational health services that are provided by the Cooperstown main and Monaco facilities include employee health testing, work-related injuries, comprehensive employee physicals, and physicals for potential employees. These services are paid by the contracted employer and are considered to be a cost-effective option for businesses as opposed to hiring a physician to carry out the tasks.
The price for each physical ranges from $100 to $550 each depending on the type of physical and any additional testing that is needed. For example, physicals for local police and fire department workers include an EKG, blood tests, and pulmonary function testing while a basic pre-employment physical only has a urine dip as an additional cost. Billing for occupational health services are sent directly to the employer rather than the individual patients.
Private Patients:
In addition to the occupational health services, two out of the three facilities offer private patient care services. With the exception of gynecologic care, all other general practice issues are addressed at these facilities on a walk-in basis, and this is a big draw for residents. CMA accepts cash, checks, and credit card at the time services are rendered. They also bill directly to larger health insurance companies and Medicare once patients are verified for eligibility and deductible requirements are checked. This covers about 80 percent of patients. The remaining patients either have coverage through a smaller insurance company or pay out of pocket for care. CMA does not serve Medicaid patients. Depending on the patient's status, either the patient will pay at the time of service and request reimbursement or have it applied toward a deductible.
Organization and Management:
Each facility in the Cooperstown Medical Associates group is open for 60 hours per week with full days on the weekdays and half days on Saturdays. Open hours are from 8:00a.m.-6:00p.m. on Mondays, Wednesdays, and Fridays, 8:00a.m.-8:00p.m. Tuesdays and Thursdays, and 8:00a.m.-2:00p.m. Saturdays. They are closed on major holidays and Sundays. The Cooperstown main facility operates with four patient exam rooms but has room for some expansion. The Riverdale facility has four patient exam rooms, and the Monaco facility has six exam rooms. Neither of these two facilities has the potential for expansion.
Minimum staffing at all facilities include one receptionist, two medical assistants, one RN, and two physicians or nurse practitioners. Additional staff is scheduled based on anticipated volume. In addition to the staff at the individual facilities, there is a central office that shares services. Staff includes a medical director, director of patient care, office manager, and billing clerks.
Charges:
The charge schedule is the same for all three facilities. A basic visit charge has increased slightly since the organization was founded. For private pay, the charge began at $125 and is now at $140. An occupational health visit was initially $210 and is now $275.
The organization maintains a schedule of charges for additional services that is reviewed and updated each year to stay competitive with other local facilities. Some occupational health clients have negotiated a fee schedule based on volume for specific services mandated by businesses. In addition, data shows that the charges for the facilities are significantly less than both a traditional office visit with a general practice doctor as well as an emergency room visit.
Payroll is managed in-house as well. Pay stubs are distributed bi-weekly either through direct deposit or on a paper check, and a W-2 form is also distributed at the end of each year.
Board of Directors:
The five physicians who own stock in the company are members of the board of directors, and they meet quarterly. These five owners are given priority to purchase stock, and any unpurchased stock can be bought by an outsider with owner approval. CMA has paid stock dividends for the past 2 years.
Clinical Staff:
In total, there are 14 staff members, eight physicians, four nurse practitioners, and two physician assistants. All 14 have staff privileges at a local hospital. 10 staff members work full time (i.e., 32+ hours per week), and four staff members are considered part-time employees. Benefits are determined on a case-by-case basis by the board and administrative staff.
Physicians are paid $125 per hour; Nurse practitioners are paid $60 per hour; physician assistants are paid $50 per hour. These rates are comparable to other clinical staff in the area. Physicians are expected to attend to about three or four patients each hour, but this can vary depending on how busy the office is each day. Schedules are set at the beginning of each month. If a staff member is not able to work on any given day, they must secure an appropriate replacement.
In addition to regular tasks, one physician who is selected annually is responsible for ensuring credentialing is done properly and that records comply.
Overall, the clinical staff is satisfied with the scheduling process, but they do express a desire to work at only one facility rather than rotate. They feel that this will build a more unified, stable staff which will lead to a better care team overall.
Nurses:
Each facility also schedules one nurse at any given time. There are seven nurses on the payroll, some of which are fulltime and some of which are parttime. All of the nurses are RNs and manage a variety of tasks including gathering information from patients and formulating a plan of care.
Medical Assistants:
On each weekday, there are at least two medical assistants on the schedule in each facility with one in an on-call position. They are responsible for preparing the patient rooms, acquiring vital signs from patients, assisting the physician in testing and other procedures, addressing questions from patients, and providing follow-up instructions. CMA maintains a pool of ten to twelve medical assistants at any time.
Each medical assistant is trained on specialized equipment and is prepared to perform lab testing, drug and alcohol testing, x-rays, vision assessments, and EKGs. Blood draws and other lab work is sent out to a county facility for processing.
Receptionist Staff:
Each facility has one full-time receptionist and two part-time receptionists on staff. They are responsible for scheduling patients, registration, managing records, and collecting payments.
Central Office Staff:
One of the physicians also assumes the role of medical director and splits their time between clinical hours and administrative duties for the company. One of the nurse practitioners also acts as the director of patient care and is responsible for training, supervising, and scheduling the medical assistant and reception staff in addition to other administrative tasks. The office manager is a full-time position and is responsible for ordering supplies, managing the billing clerks, and managing the accounting tasks amongst other things. As part of their team, there are three full-time billing clerks in the central office.
All staff at the three facilities have been trained on Codex software which manages records, accounting, billing, scheduling, and coding. This software links all parts of patient care for ease of use.
Additional Information:
CMA maintains that patient satisfaction is the highest priority across the board. They also stress affordability and convenience. and Although not profitable in the first few years after opening, they have built a strong client base and opened the two additional facilities. They are now doing very well financially and are considering purchasing space for a fourth facility.
Maintaining growth is a concern of the clinical staff. The manufacturing industry is large in the area, and if a significant amount of business is lost, potential occupational health clients could be lost. Also noted is that the area has a higher than average unemployment rate, and this impacts the number of people with health insurance. Advertising for CMA is done on billboards, radio, television, and social media.
All three facilities use an appointment and walk-in based system that seems to work fairly well. Patients who do not have an appointment are asked to check in and are given an approximate wait time. They need not wait in the facility. Appointments and urgent matters are given priority.
The effectiveness and productivity of the clinical staff varies. When a facility is busy, revenue per visit drops, which suggests that staff is less comprehensive with testing when busy. In addition, some of the staff request to have particularly busy days off or be further compensated for their work.
Metrics:
No Show Rate Fill Rate (Rate of Patients That Appear) Cancellation Rate (How Often the Provider Cancels an Appointment) Time to Next New Appointment
Cooperstown Main 10% 85% 5%
Riverdale 10% 80% 10%
Monaco 10% 75% 2%
Opportunities for Expansions and Improvements
It is estimated that approximately 35 percent of patien:ts with work-related injuries have physical therapy recommended as a treatment in addition to about 7 percent of non-work-related patients. The board of directors at CMA have indicated that there may be an opportunity to expand the practice in that direction. This opportunity has the potential to support a large percentage of patients and increase revenues substantially. In addition, it would bring additional jobs to the community.
Some concerns that have recently come to light include:
- Increasing wait time in the reception area. This issue needs to be addressed in some way, either by increasing staff or decreasing the number of available appointments.
- One member of the board has an interest in selling CMA and is planning to discuss positioning for sale at the next meeting. This member believes that CMA is not going to be able to compete in the market as medical facilities continue to emerge.
- Several pieces of equipment that are used daily in all three facilities are being leased, and the leases on several are expiring in the next year. CMA accountants recommend purchasing this equipment now that they are earning a profit but not all board members agree with this proposal.
- The city of Cooperstown has requested a meeting with CMA directors to discuss expanding its hours of operation on Saturdays and Sundays to better meet the needs of the population.
Based on the information in this case study, respond to the following:
Question 1: Describe at least three metrics you will use to evaluate the organization's productivity.
Question 2: Explain how you will use these metrics in evaluating productivity.
Question 3: Explain how the metrics will help measure the potential of the organization's success in the new era of health care reform.
Question 4: Analyze opportunities for improvement using Lean Management and Six Sigma principles.
Question 5: Develop five measurable stretch goals and how they will help the organization in the future.