Striving for profitability
“In all honesty, from what I see nationally, pediatricians break even on vaccines. It’s a break-even situation, on average,” Mr. Hart commented. “But who wants to be average? No one. We want you to actually be profitable with vaccines because it’s the only way you can continue to give them.”
Practices can take a variety of steps toward that goal. First, they should negotiate payments with payers, using the AAP’s business case and other literature. “Don’t listen to anybody” who says you can’t negotiate, he stressed. “You can negotiate. I don’t care if you’re a solo practice or you’ve just opened. If a payer says they can’t negotiate, they are fibbing to you. The only payers who don’t negotiate are the state Medicaid and Medicare. Everyone else can and does.”
Second, practices should ensure that they are using proper Current Procedural Terminology codes when submitting claims to payers to maximize payment.
“I still see too many practices who don’t bill for these properly,” Mr. Hart commented. “If you have a typical pediatric practice and you use more 90471s and 90472s than 90460s and 90461s, and frankly, if [the latter] aren’t two to three to four to five times more common… you are losing a lot of money.”
Third, practices should join or confirm that they belong to an effective group purchasing organization (GPO) to reduce their vaccine costs, with data suggesting that doing so will save the practice $10,000 to $15,000 per physician each year.
“If you are solo, out on the furthest edge of Alaska, you can see Russia from your house, and you have no leverage whatsoever, you can sign up with one of these GPOs and you are as strong as any hospital,” he said. The AAP helps here as well, by maintaining a list of GPOs on its website.
Fourth, practices should review their vaccine delivery work flow to look for money leaks, Mr. Hart advised. For example, physicians who get caught up in tasks such as ordering and inventorying are losing revenue that could come in from seeing patients.
“This is the sort of thing that affects your bottom line substantially. And it’s exactly the sort of thing that is an invisible expense: the business owners don’t consider their time as part of the expense of doing this administration,” he said.
Additionally, legacy procedures should be re-evaluated to see if they can be streamlined. Gains also may be made here from investing in better technology, such as a refrigerator with a glass door that saves time by allowing ready identification of vaccines.
Finally, practices should join the AAP’s Section on Administration and Practice Management (SOAPM) as it’s an invaluable, interactive resource in this area when questions or challenges arise, Mr. Hart recommended.