Keith Loria is a contributing writer to Medical Economics.

Keith Loria

The purchase of new technology is a monumental decision-making exercise for a medical practice. Some of the key areas of consideration include patient benefit, practice overhead, potential new revenue, and impact on practice workflow.

One of the best ways to know whether new technology is the right choice for a practice is to research it, whether it’s asking trusted colleagues for their opinion or reading the literature published about the equipment.

Clifford Gluck, MD, FCAS, who owns a urology practice in Hingham, Massachusetts, is frequently presented with the “next big thing” in tech. But he has found that most technology is oversold and that sales associates often significantly exaggerate the benefits.

“One has to be very careful about purchasing any kind of technology — especially ones that the patient will pay cash out of their pocket for,” he says. “That’s why it’s important to get the experience of others who have used the technology and to look at the literature to see what there is in terms of scientific evidence.”

Rafael A. Lugo, MD, a general surgery specialist in The Woodlands, Texas, agrees that not everything new is best.

“It’s a tough decision each practice has to make on a personal level,” he says. “The best method is to evaluate current workflows and then see where the new tech fits in and how it will help the business or improve patient care.”

From there, he notes, consider the return on investment, which ultimately will become a driving force of almost any new technology.

“If we buy new tech just to be modern, then we are wasting the money,” Lugo says. “I think it is important to have clear goals in any expense made for the practice. Overhead is the biggest drain for a practice and if the new tech will not make a difference, then it’s often best to wait.”

Practices should never jump into something quickly, as tech can be expensive and it’s something they may be stuck using for years even if something better comes along.

“Testing the product on a small scale is crucial,” says Ewa Matuszewski, CEO of MedNetOne Health Solutions in Rochester, Michigan. “Purchase one or two licenses or ask the vendor for a testing period. Never purchase group licenses until the user has had the opportunity to see if the product fits the needs of the practice.”

Another great tip is to look at the response time of the customer relations department, she says. If a physician can’t get an issue resolved in a few days and the vendor doesn’t follow up, it may be a good reason to reconsider purchasing the product/licenses.

David Berg, president and co-founder of Redirect Health, notes practices need new technology to stay competitive. This increases the efficiency and effectiveness of the workforce, and it also reduces the cost of hiring new workers to do what the technology can do instead.

When choosing technology, Berg says, “you don’t want to put too much weight on the importance of reviews from other practices unless they are ones you personally know or trust. Building a network that you do trust is an important step for a practice and an effective way to get reliable reviews on new technology you may be considering.”

Attending seminars that demonstrate a new type of technology can be helpful, as well as watching videos about the product and reading the studies that were performed.

“Also important is its ease of use and implementation into practice,” Gluck said. “Is it something that will be covered by health insurance or will patients have to pay for it out of pocket? Will a special protocol have to be implemented in the office? Will assistants need to be trained about how this new technology works? These are important considerations.”

Getting burned by new technology or the companies responsible for servicing them is possible.

“When changes in ownership or priorities with the tech company occur, satisfaction with the cost and/or use of the tech can also change. Getting caught up in a bad contract can jeopardize your practice both financially and technologically,” Berg says. “Sometimes a change in priorities can mean systems you rely on don’t routinely get updated, (but that is) vital for your company to stay up-to-date with patient expectations.”

Securing a good contract that covers any worst-case scenario concerns is extremely important to protecting practices from these situations.

“When you make a decision to purchase new tech, you want to work with the salesperson — your advocate with the tech company — to ensure you always have a contractual out in case things do go south,” Berg says.

Lugo has been burned in the past by buying tech too early and purchasing things that didn’t work as expected.

“One of the most important things I have learned is not to buy until I try,” he says. “You must make sure all questions are answered and instead of letting the salespeople tell you how wonderful the system or technology is, you tell them what you need and ask for a demo on how that will work. Be clear on your needs and expectations from the first conversation.”

After all, it’s easy to be lured by bright colors and fancy gadgetry, but at the end of the day, if the tech was not designed to fit your practice’s needs, it could disrupt your work flow and make things more difficult.

“Technology should be a facilitator and not an obstacle,” Lugo says.

There are some important questions to ask before buying any new technology for the practice: What is their financial model for payment — up front, monthly? What are the conditions of terminating our contract? What are the staffing requirements to get the new tech operational? What type of training will staff need and how long will that take?

Matuszewski cites a popular saying in the industry: “If you’ve seen one practice, you’ve seen one practice.”

“The practice culture, willingness to change and ongoing practice transformation activities vary from practice to practice,” Matuszewski says. “If I had the choice, I would rely on the opinions of physician organizations that review new technology and that are willing and able to test and support the practice needs from planning to implementation and support.”

Lugo points out that what works for one practice may not work for another, so even with strong recommendations, a practice owner needs to consider whether it makes sense for them.

“An important aspect is to ensure compatibility with other systems,” he says. “I would not buy tech that is isolated. I need tech that is malleable and that has the functionality to expand, evolve and collaborate. Health care is moving toward integration of systems, and the new technology must have that flexibility or it will be obsolete in a short period of time.”

This article first appeared on the website MedicalEconomics.com

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“One has to be very careful about purchasing any kind of technology — especially ones that the patient will pay cash out of their pocket for,” said urologist Clifford Gluck, MD. “That’s why it’s important to get the experience of others who have used the technology and to look at the literature to see what there is in terms of scientific evidence.”

Advice on evaluating new technology purchases for your practice

Private equity firms’ acquisition of physician practices has escalated in recent years, and urology practices are currently garnering great interest due to an increased demand for services from an aging population and a low supply of urologists.

Victor Houtz and E. Scot Davis shared their contrasting opinions on urologists teaming with private equity partners at the LUGPA 

 in Chicago, with a point/counterpoint debate. Houtz is chief operating officer of New Jersey Urology, which last year teamed with private equity firm J.W. Childs Associates and praises the benefits of the partnership. Davis, who is CEO of Arkansas Urology and has more than 20 years in physician practice management, is not completely in favor of private equity.

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Usually in private equity cases, a urology practice will receive an upfront tax-advantaged payment associated with an ongoing salary reduction while yielding control of the business but not the medical aspect of the practice. And while that new capital can be used to improve the practice to compete with larger hospital systems, some argue that because the private equity firms are going to demand a much higher level of performance and higher level of organizational discipline, it might not be worth it.

Houtz and Davis started by explaining some important questions need to be addressed before deciding to go the private equity route, including “Why are you doing it?” “What aren’t you doing it?” “What is the value to the practice?” and “How does it impact the culture?” Each answered these questions weighted by their particular opinion.

Davis, who was in a physician practice management company earlier in his career, said the private equity model today is similar to his previous experience in growing a practice, though there are some differences. He questioned whether private equity firms truly offer security and autonomy, which is what the private equity companies promise. In reality, he said, urologists probably lose control over their day-to-day operations.

Conversely, Houtz explained why losing some autonomy may be of the best interest to the practice group.

Does private equity benefit all partners?

One question Houtz and Davis debated was whether a private equity arrangement benefited all of the partners or a specific subset. “One challenge is that more senior physicians who are looking to retirement may cash out and then could quit or slow down their production,” Davis said.

Houtz explained that his group requires a certain production level from physicians, with penalties attached, to keep this from becoming a problem.

However, Davis countered that in the basic private equity model, physicians create EBITDA (earnings before interest, tax, depreciation and amortization) by giving away their income for a period of time. And the model is too young-just 3 years-to determine if this is viable for the future. He doesn’t have any empirical evidence, but said it should give pause.

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Another question the executives debated was whether private equity impacted the quality of care. Houtz emphatically stated it doesn’t, but Davis expressed concern that at the end of the day, private equity firms are looking for money and if a certain threshold needs to be hit, that could ultimately affect quality.

Davis admitted he’s not diametrically opposed to private equity and can see the value for certain groups. But in his practice, he said he doesn’t feel there’s value now, although there could be value in the future. He encouraged others to consider that before making any decision going forward.

Houtz also said he feels private equity isn’t the best choice for every urology group and agreed that multiple factors needed to be considered.

Regardless of whether one was persuaded one way or another, at the end of the presentation, The debate ended with one key answer to the question, “Is private equity right for you?” The answer: “It depends.” It isn’t for everybody, but it might be for some, and the two speakers armed attendees with items to consider before stepping into a private equity discussion.

Why private equity is right for some, not all, practices

Having four generations of physicians working in the same practice is both a blessing and a significant source of complications, said Haydn Shaw, CSP, at the LUGPA 

Shaw, the author of “Sticking Points: How to Get 4 Generations Working Together in the 12 Places They Come Apart,” used his to talk discuss three key components of the topic-four generations interacting in an office, how to recruit and keep clinicians happy, and how to hand off a practice.

This is the first time there have been four generations in the workplace, he explained, and it’s soon to be five-although there are already five generations of patients today as life expectancy has increased 30 years since 1900.

“It’s one of the great blessings of modern medicine and science,” he said. “It also makes life a lot more complicated because through most of the centuries, there were only three generations of people and a clear hierarchy. But now that we’ve got five generations in a workplace, there are a lot of opinions from different generations, and there are traditionalist practitioners who are still effective in their 70s. But if the older generations expect the younger staff to wait their turn to push for their preferences, they will be surprised.”

Protecting against cyber risk: Solutions are available

He explained while the process has always been to “wait your turn,” today’s graduates don’t want to pay their dues for 20 years and are looking to be heard from the get-go. It’s not that the younger generations want to be running the place in a year; the research doesn’t support that, Shaw said.

“As a matter of fact, both generations believe that traditionalists and boomers know more than anyone else in the workplace, so both Gen X members and millennials have a lot of confidence in the work experience of older generations. What they don’t want to be told is ‘wait your turn’ and that they will be at the card table instead of the big table for another 15 years.”

While younger generations don’t expect to make the decisions, they do want to observe and occasionally be asked their opinions.

Another critical factor when it comes to creating a happy work force with multiple generations relates to retention and boredom. As millennials get older, Shaw explained, they’re better able to deal with boredom, but younger millennials don’t have a lot of tolerance for boredom. A Gen Z member may take a job with more boredom if it provides security over a job that’s their passion.

“Gen Z watched people have to work really hard just to get what boomers got the week they graduated from college,” he said. “They’re a little more serious about things, but boredom is still a major threat.”

So, when they get to work and the boredom factor is not taken into account, turnover may ensue and retention could be problematic.

A third piece Shaw addressed was the importance of emerging adulthood and how older generations who don’t understand this concept will blame a lot of things on millennials.

Emerging adulthood, he explained, is the life stage between adolescence and early adulthood that has been expanding over the last 40 years as people postpone marriage, having kids, and finishing an education. But all that can get pushed back due to demands of a career, and many physicians have been pushing it back for decades.

“One of the common complaints is that older nurses say that younger nurses are not as dedicated to patients,” Shaw said. “Often, it’s because they don’t want to take the worst shifts or they want a long weekend. They may want Columbus Day off because a bunch of their friends are going away for the weekend but are told they’ve only been there 9 months and need seniority for that. The problem is the oldest nurse has been there 23 years and they will never get seniority for that.”

When baby boomers entered the work force, a 24-year-old nurse was often married (maybe with a child already) or knew who they were spending the rest of their life with, so they didn’t need to go off with friends for a long weekend to find someone.

“So, when older nurses say younger nurses don’t care as much about outcomes or about patients, what they’re often saying is younger nurses don’t care about patients enough to work shifts that make it hard to find love. It’s a choice previous generations with a short emerging adulthood life stage didn’t have to make and don’t realize younger nurses do unless the old rules change,” Shaw said. “And when you explain it that way, a whole lot of nursing managers better understand and say that makes a lot of sense.”

Shaw warned Gen Xers in a physician practice to brace themselves for what he had to say.

“One of the things I hear quite a bit of from people who own their practices is, ‘While I admire and appreciate the professionalism or the education of my Gen X staff, it just seems like a lot of Gen Xers care more about how much money they make and how much time off they get than they do about patients,’ ” he said. “There is growing research that older millennials are willing to put in the most hours of any generation.”

He noted work-life balance has always been valued more by younger than older generations. One physician said he couldn’t sell his practice in good conscience because none of the younger generations cared about patients as he did.

Physicians need to raise their generational IQ, Shaw concluded, so they can work better together in the office, quit blaming a generation for challenges, and start making the adjustments that transition them into the future.

Having four generations of physicians working in the same practice is both a blessing and a significant source of complications, said Haydn Shaw, CSP, at the LUGPA annual meeting in Chicago.

How four generations of physicians can work together

In an era of increasing and costly cyber-attacks in health care, physician practices must arm themselves with technical controls as well as internal protections to reduce their risk, according to Michael C. Lamprecht, president of Chicago-based BigData Insure, LLC.

Lamprecht spoke at the LUGPA annual meeting in Chicago in a presentation designed to educate urologists on potential cyber risks and how practices might be affected by a privacy breach, ransomware attack, extended computer system downtime, and similar cyber perils that frequently impact the health care field.

A 20-year veteran of the insurance industry, Lamprecht initially started working with technology and dot-com firms before dedicating himself to a single type of risk, now known as cyber risk. Over the past 25 years, he’s been providing cyber risk management consulting and cyber risk insurance to all types of firms.

He explained that various industries face different cyber risks, and physician practices have increased exposure to certain risks, such as privacy breaches and reputational injury as well as unique exposures, including negative patient outcomes as a result of cyber-attacks.

Lamprecht told LUGPA attendees how to identify their own cyber risks and potential losses based on their practice’s activities, use of technology, and the data collected from patients, insurers, and vendors. The core cyber risks for urologists, he said, are employee dishonesty, human error, viruses, hacking, software failures, ransomware, and social engineering, which commonly cause urologists to incur financial losses due to the resulting privacy breaches, HIPAA violations, computer system downtime, loss of patients, extortion payments, and fraudulent funds transfers.

In one example provided by Lamprecht, a small physician practice was the victim of a sophisticated ransomware attack designed to “lock” the firm’s equipment, software, and databases.

“The hackers demanded $58,000 to unlock files, and the group paid the ransom and unlocked the equipment,” he said. “However, some damage was done, which required some of the data to be restored by a specialty IT firm. In this scenario, the extortion coupled with the $53,150 in data restoration and $29,800 loss of income resulted in a total loss of more than $143,000.”

In another example, a hacker found his way into an insured’s computer system after stealing a physician’s laptop, which had remote access to the patient information database, resulting in mandatory notification in 27 states and optional notification in two other states. However, before the practice could notify customers, it had to conduct extensive forensics to identify which patients were affected and pay credit reporting agencies for the current contact data for many of them.

“The insured opted to provide their clients with a full 24 months of identity restoration and monitoring services supported by a private call center,” he said. “The total loss was $495,305.”

Cost-effective cyber risk loss prevention protections include technical controls such as virus protections, firewalls, user access control, and data encryption as well as policy- and procedures-based loss prevention, including a firm privacy/security policy, employee security training, data sharing, and compliance with state and federal regulatory guidelines and best practices.

Lamprecht also offered advice if a privacy breach does occur. “A coordinated response to a privacy breach includes immediate triage and response, scope and impact assessment, targeted response to resolve issues, and long-term monitoring to prevent recurrence,” he said.

Does medical malpractice insurance cover cyber risk claims? Lamprecht explained that in some cases, it may provide help with claims, but it depends on the circumstances of the claim, the type of loss, and the policy in place. He suggests reviewing your policy carefully.

When discussing cyber risk insurance for urologists, he gave examples of policies designed to protect small- to medium-sized physician practices from first- and third-party cyber risk losses. Some policies also include coverage for medical billing errors and omissions, he said, and many insurers offer health care-focused incident response services as well as access to risk management services and best practice training.

Types of coverage available to urologists, Lamprecht said, include Data Breach Response Expenses coverage, which covers the insured’s expenses of responding to a data privacy breach including technical forensics to identify the source and scope of the data breach; legal counsel, to advise on the applicability and actions necessary to comply with professional, ethical, and regulatory requirements; notification, to alert individuals or organizations about a data breach; identity monitoring, to provide data breach victims with health care record monitoring, credit monitoring, identity theft remediation, and fraud resolution for up to 24 months; and public relations, to advise on, design, implement, and execute a response to reduce damage to the practice’s reputation and prevent loss of patients.

Other coverages available include Network Security and Privacy liability, which covers the insured for regulatory investigations, legal defense costs, damages, fines, and penalties due to a privacy breach, HIPAA violation, negative patient outcome, or breach of payment card industry violations; Electronic Data Restoration Expense, which covers the insured’s expenses of repairing the practice’s computer and electronic data following a cyber-attack; Business Interruption and Extra Expense, which covers the insured for a loss of income following a cyber-attack; Ransomware and Extortion, which covers the insured for extortion payments and expenses to mitigate or terminate a threat to disclose patient information, disrupt the practice’s computer system, or lock the physician’s computer system or data with ransomware; and Cyber Crime (fraud) and Social Engineering, which covers the insured for loss of money or securities due to fraudulent funds transfers.

Lamprecht said capacity in the cyber risk insurance market is growing, with more than 65 insurers offering cyber risk insurance products and up to $500 million in capacity across the marketplace.

The key take-aways, he said, are that urologists need to understand their cyber risks, implement critical protections, and if they choose to purchase insurance, make sure they buy the correct coverages for the practice.