Society Spotlight “Creating Magic” on the Economic Rollercoaster of the O&P Practice
September 2012 Issue
As a practicing clinical orthotist, I follow the guiding philosophy that if you treat your patients as if they were members of your family, then you will develop longstanding relationships with them and establish an atmosphere in which patients are confident in your work and recommendations. So if you are treating a pediatric patient, he or she should be provided with the same orthosis or prosthesis and treatments that you would expect your own child in the same scenario to receive. Because your patients know that their interests are of utmost importance to you, following this philosophy lends itself to patient satisfaction, which will likely result in repeat visits and patient referrals. Lee Cockerell describes this well in the book, Creating Magic: 10 Common Sense Leadership Strategies from a Life at Disney, in which he discusses how Walt Disney Corporation's theme parks have been and remain successful. All employees, called cast members, are trained to provide customers with the most enjoyable experience possible. Creating employees with an ideal working environment ultimately results in employees providing an experience that customers want to return to year after year.1
Applying the Disney Model in an Up-and-Down Economy
Unfortunately, economic downturns combined with decreases in reimbursement and increased costs have become a reality and have caused O&P practices to explore how to be profitable without sacrificing a strong patient care relationship. The changing economic climate has forced businesses to evaluate new questions every day. In his article, "Retain More Customers with New Patient Care Philosophies," Anthony Calabro points out that over time businesses have come to the realization that they can only help their patients by remaining healthy and profitable.2 Recently, Federal Reserve Chairman Ben Bernanke pointed out that unemployment in the United States is still unacceptably high, and if the European economic crisis intensifies, it will have a profound effect on the U.S. economy.3 This author has explored a few questions that affect day-to-day operations of an O&P practice to determine what threats exist that could impact a company's success and how to reduce their negative impacts.
Managing Fabrication Costs
The fabrication process is a primary concern. As the cost of materials and production rises, it is vital to make wise decisions and balance functions with costs because the increased expenses cannot always be passed on to the insurance company and other payers. Contracts with managed care companies typically come with prices and discounted rates that are negotiated and set. One of the biggest questions is whether to use central fabrication or fabricate an item in-house. A clinician needs to consider the costs associated with each of these methods. In-house fabrication includes expenses such as those associated with employee salaries and benefits. These are significant issues when housing an in-house fabrication base of employees. Marc Kaufman, CPO, LPO, co-owner of Atlanta Prosthetics and Orthotics, Georgia, says that a real conundrum in the in-house model is that insurance premiums for employees have skyrocketed. He has joined the growing number of businesses that are sharing the economic impact of increasing insurance premiums with their employees. Kaufman also notes that oftentimes it becomes necessary to maximize efficiency by combining job responsibilities.
Communicating Payment Responsibilities
Another growing trend seems to be higher patient deductibles and copayment responsibilities. Kaufman recommends being up front with patients from the beginning about their payment responsibilities and what options are available to help them meet these obligations. To cast, fabricate, and finish an orthosis without educating the patient about the costs will potentially lead to being unable to deliver the item and result in you incurring the cost of the initial visit and fabrication. In my practice, our policy is that fabrication of an item doesn't begin until the patient's insurance company states what the patient's coverage is, including the patient's copayment responsibility. This up-front interaction lets the patient know that we care about his or her ability to get the orthosis and that we want to help in every way we can. It allows time to address any discrepancies with the insurance company, such as deductibles that the patient has paid but haven't yet been applied, and it also allows the patient time to make payment arrangements. Payment options such as those offered through CareCredit can be discussed and presented to the patient to help him or her manage the cost. The key is that the patient understands that we as a company want to assist him or her in being able to make arrangements to receive the orthosis in a timely manner.
Investing in Quality Employees
Another important element is the quality of the practitioners on staff and whether your business model allows for assistants and residents to help out in the office. According to the O&P Careers website, www.opcareers.org, "O&P graduates have a 100 percent employment rate." However, Michael Oros, CPO, LPO, FAAOP, past chairman of the National Commission on Orthotic and Prosthetic Education (NCOPE) and a director on the American Orthotic & Prosthetic Association (AOPA) board, is quoted in a 2009 article as saying that his practice has cut back the number of residents from four to two as a result of the economy.4 In my practice, we believe strongly in educating our practitioners in evidence-based practice, design, and business decision-making. We train residents to follow our core philosophy of treating patients as they would treat family members. We encourage them to keep up with O&P trends and developments and to understand the current economic climate. We want our residents to experience all aspects of the company, from clinical practice to fabrication to coding, billing, and reimbursement. Practitioners with this kind of comprehensive training can then make sound decisions to ensure that their patients get the most appropriate orthoses or prostheses and can justify the cost of these devices. As a manager, I think each day about what the book, Creating Magic, says about working with employees: "The true work of a business leader, like that of a mother, is to help others to be the best they can be."1 We strive to give residents the ability to know and understand every aspect of the O&P practice.
Embracing New Technologies
New technologies can be very exciting but only if reimbursement allows for the technology to be embraced by the field. Prepreg carbon-fiber materials, for instance, add a valuable tool to the fabrication process since these materials allow for varying strengths throughout the same system, and high strength with low weight is achievable. The Healthcare Common Procedure Coding System (HCPCS) code L-2755 (carbon graphite lamination) is covered by some insurance carriers but not by others, and this poses a barrier to entry for the patient into the latest technology that could potentially increase function. Kaufman points out that since Medicare has stopped reimbursement for L-2755, O&P practitioners have had to decide whether to use the material and absorb that cost for patients whose primary coverage is Medicare. The ultimate question then becomes how to reduce costs and still make the upgraded orthotic component viable. It becomes a very conscious decision in which the practitioner needs to weigh a variety of cost and function options.
Functional electrical stimulation devices such as the Innovative Neurotronics WalkAide and Bioness L300 for foot drop are good examples of how to handle scenarios in which the latest technology is available but not yet accepted for standard coverage by insurance carriers. How do you provide the item to the patient in a way that is economically feasible for you while still being affordable to the patient?
Regardless of economic climate, another threat is when unqualified individuals provide care. Oftentimes, comprehensive orthotics and prosthetics fall into the hands of practitioners who are not licensed or not credentialed. O&P companies realize that under-qualified practitioners can lead to increased costs of providing care, and a growing number of practices are using certified assistants in their practices to save on labor costs while also ensuring quality care. They are educating and privileging the certified assistants at different levels based on their abilities to provide care in an efficient manner, empowering them to be the best employees they can be, and ultimately providing the best patient care possible.
As economic trends continue to shift downward, it is essential to find the right balance that allows the office to operate similarly to the Disney model in which all employees want to work for the patient and all patients enjoy a level of confidence that makes them want to come back for years to come. As stated in Creating Magic, "It's not the magic that makes it work; it's the way we work that makes the magic."1
Keith M. Smith CO, LO, FAAOP, practices at Orthotic & Prosthetic Lab, St. Louis, Missouri, where he specializes in the care of patients with neurologic and orthopedic disorders. He can be reached at
Society Spotlight is a presentation of clinical content by the Societies of the American Academy of Orthotists and Prosthetists in partnership with The O&P EDGE.
- Cockerell, Lee. 2008. Creating Magic: 10 Common Sense Leadership Strategies from a life at Disney. New York: The Doubleday Publishing Group.
- Calabro, Anthony. 2010. Retain More Customers with New Patient Care Philosophies. O&P Business News, November.
- Appelbaum, Binjamin. 2012. A Little Optimism at the Federal Reserve. New York Times, June 7. www.nytimes.com/2012/06/07/business/fed-members-inclined-to-stand-pat-for-now.html
- Pavlou, Stephanie Z. 2009. Seeking Hard-to-Find Residencies. O&P Business News, June.