Prepare to Thrive with Nonprocedural Business Lines

August 01, 2013


Lawrence R. Kosinski, MD, MBA, AGAF

Chair, AGA Institute Practice Management & Economics Committee; Managing Partner, Illinois Gastroenterology Group


Every product or service has its own life cycle. Most businesses follow a typical cycle (see graph) — beginning with a development period, eventually leading to the deployment of a product or service. This is then followed by a phase during which the business struggles to take hold. If it is a solid business, early adopters drive its success, which results in a rapid growth phase with expanding margins and solid profits. Competition eventually enters, which compresses margins and profits. The lack of profit results in the decline of the business leading to either senescence or replacement with less expensive innovative products.

Medical services have life cycles as well. Any of you who have been in practice as long as I have will clearly realize this. We’ve all seen the rise and demise of certain procedures as technological change shapes the market. Colonoscopy is no exception. It has gone through a rapid growth phase triggered by the “Katie Couric effect” of the last decade and augmented by changes in reimbursement designed to cover preventative care. We are now in a mature period of the cycle for colonoscopy. Margin compression has resulted in less profit and there are multiple potentially less expensive replacements on the horizon.

It is therefore time to look for other nonprocedural business lines that will lend themselves to the risk-based changes that are developing as a result of health-care reform. How do we identify those businesses? We need to focus on the high-frequency services that bear the highest risk to the population.

The AGA Institute Practice Management and Economics Committee has been focusing on nonprocedural business lines since 2011. We identified several potential business lines that represent high-frequency/high-risk services and identified three experts in the field to provide their insight and advice. Read “Building Your Nonprocedural Business Lines.”

Nutrition Services

The division of gastroenterology, hepatology and nutrition at the Medical College of Virginia campus of the Virginia Commonwealth University, Richmond, has a robust practice footprint in outpatient and inpatient nonprocedural nutritional support. In this publication, Jay Kuemmerle, MD, AGAF, interim chair of the division, provides an overview and roadmap for how and why the division redesigned their services, outlines the resources needed to be successful, and highlights the gains made for their practice.

GI Geriatric Services

Karen Hall, MD, PhD, of the East Ann Arbor Health and Geriatric Center, Michigan, summarizes the work she has been doing at the University of Michigan Health System in conjunction with her primary care colleagues. By developing a model within a multi-specialty geriatric clinic at the health system, Dr. Hall and her colleagues have enabled gastroenterologists to provide nonprocedural care while triaging patients for endoscopy and other procedures. This “one-stop” specialty and primary care department was created by providers with the interest and expertise to help meet patient demand.

Women’s Health Services

While men and women are affected equally by digestive disorders, women often have specific and unique medical issues that require an integrative, multidisciplinary approach to treatment. Kimberly M. Persley, MD, realized early in her practice that digestive health issues may affect women differently and women are often willing to wait longer for an office visit to be seen by a woman. In her discussion, Dr. Persley will tell us about the challenges that exist in building a GI women’s health program in a private practice setting at Texas Digestive Disease Associates in Dallas.

Gastroenterologists have enjoyed a wonderful period of stability with respect to our endoscopic services; however, we are probably too dependent upon their revenue. They are now under market pressures and are threatened by technological advances that will, in the end, result in declines in reimbursement and utilization. Change can be an opportunity. It’s time to embrace the future and adapt.

Dr. Kosinski has no conflicts to disclose.

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Comment by Alexander Jacob on Friday, August 2 2013 at 6:20 AM