Virtual medical group schools physicians in business

Texas Tech University's strategy of offering such a class to residents is the latest evolution of practice management training.

By Myrle Croasdale — Posted Feb. 21, 2005

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Before residents join a real medical group, Texas Tech University wants them to join a virtual one.

Texas Tech's virtual medical group -- complete with case-based scenarios featuring all the paperwork and red tape any practicing physician knows all too well -- is but the latest twist in the continually growing effort to make sure that doctors learn their business skills as well as their clinical skills.

What's happening at the Texas Tech University Health Sciences Center School of Medicine is a microcosm of what's taking place throughout the medical profession. Since managed care came into being, doctors have been looking for ways to regain control over the business side of their practices. The introduction of more government regulations through Medicare and now the Health Insurance Portability and Accountability Act has only intensified this desire.

Like many schools, Texas Tech started its physician business training by offering a master's of business administration program to practicing doctors a few years back. Then it added an MD/MBA program for medical students.

Now, with the virtual medical group offered to residents, it's joining a growing group of universities and other entities, such as AMA Solutions, that offer non-degree courses on the basics of practice management for doctors who aren't seeking an MBA.

John D. Blair, PhD, director of the Center for Healthcare Leadership and Strategy, part of the Rawls College of Business at Texas Tech, said the need for such programs is growing.

"The government is more than ever looking over the shoulder of doctors, and at the same time they've got managed care doing this," Dr. Blair said. "There are a lot of people they perceive as interfering in the doctor/patient relationship."

Practicing virtually

Joshua Tardy, a second-year MD/MBA student at Texas Tech, hopes to be a pediatrician one day, but he also feels the need to learn the business side of medicine.

"I just want the knowledge to make wise decisions and to know my practice will be as efficient as I know how to make it," he said.

Tardy was among the first at Texas Tech to use the virtual medical group, which was offered to MD/MBA students. About 50 internist and family physician residents are expected within weeks to enroll in an eight- to 10-session, non-degree class featuring the group. Eventually, the school plans to expand use of the virtual medical group for courses for practicing physicians and others in health care.

What's unique about the virtual medical group, its creators say, is that it combines information from the various segments of the industry. Its resources include employment and partnership agreements; physician employment agreements; medical staff bylaws, rules and regulations; professional liability insurance policies; managed care contracts; and financial and operational reports based on practice data given by practice management firms.

The learning platform, as it's called, can be used to create a range of case-based scenarios to capture what it's like to work at a hospital-based practice or solo office. But the basic scenario is one of an internal medicine practice with eight doctors.

While the MD/MBA students first learn the principles of accounting, medical liability and other disciplines before attempting to combine them all via case-based scenarios built from the virtual medical group's data, the residents will go straight to such topics as cash flow, reimbursement, personnel, HIPAA and the Joint Commission on Accreditation of Healthcare Organizations issues, said Tim Nix, PhD, director of the health organizational management program at the business school.

For example, the virtual medical group will let residents learn how to examine their practice revenue, so they understand how to go to a third-party payer and say, " 'Here is what I do for you. Here is what it costs me. Here is what I'm getting,' and renegotiate," Dr. Nix said. "Let's take a look at what it costs to run your medical practice and a look at reimbursement. Every practice has codes they make money on and codes they lose money on. Are codes generating income, or do you need to renegotiate them?"

Tardy's taste of the virtual medical group in his MBA course was of medical liability insurance. He evaluated several different liability plans, looking at whether coverage would be adequate for his medical practice, what options there were for long-term and short-term coverage, and if tail insurance would be needed if the plan were terminated.

"It forces you to make real-life decisions with hard data," he said. "I think it's fantastic. ... Hardly a day goes by without hearing someone talking about business-related fears."

A thirst for knowledge

In 2004, an Assn. of American Medical Colleges survey of graduating medical students found that 60% said they didn't learn enough about medical economics; 58% felt they didn't get enough information on practice management; 55% wished they had been taught more about managed care; 47% would have liked more information on cost-effective medical practice and 43% felt shortchanged on learning about medical record-keeping.

But creating a realistic medical practice is not simple. Dr. Blair said it took 10 years to get the virtual medical group off the ground.

"To make it realistic, you have to have a staggering number of documents," he said. "It's very difficult to get the complete dump of real data that people use. ... The more we find out, it seems no one has anything like this."

Jim Watters, MHA, senior director of graduate medical education at Texas Tech, said the need for this type of training was deep.

"There are a lot of issues residents need to consider in setting up a practice or joining one," he said. "We want to help people find out all that is involved, so they'll know what they can do themselves and what they'll need to hire others to do."

Watters hopes the course will help residents with upcoming job choices, whether it be working somewhere like the Dept. of Veterans Affairs or setting up their own practices.

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Taking care of business

Doctors want to understand the business side of medicine. A 2004 survey by the Assn. of American Medical Colleges asked graduating medical students if the time devoted to various topics during medical school was inadequate, appropriate or excessive.

Topic Called it
Medical economics 60%
Practice management 58%
Managed care 55%
Law and medicine 52%
Cost-effective medical practice 47%
Medical record-keeping 43%

Source: Assn. of American Medical Colleges

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