For James Thrall, MD, chairman of radiology at Massachusetts General Hospital (MGH), it is important not just to diversify; the way you diversify is important. “One of our guiding principles,” he says, “is the concept of quality of revenue.”
Quality of revenue is defined by the difficulty with which the revenue is earned. “How much work does it take? How pleasant is the work environment? How hard is it to collect the revenue?” Thrall asks. “When we look at any entrepreneurial venture, we say not just how much, but what is the quality of the revenue?”
Thrall says the lowest quality revenue derives from the MGH core practice. “That’s where it is case-by-case, fee-for-service. It’s subject to denial and disruption in the billing process, so not? collecting it is a risk. It’s expensive to collect, the physicians work hard 24/7 and for professional fees only. If you look at all the other things we are doing, the quality of revenue is better. The outpatients are ambulatory and take less time. With our teleradiology, we bill the organizations sending us the cases, so there’s no billing fee and we have guaranteed payment. Looking for quality revenue, you try to get more [financial] leverage for each unit of energy expended.”
G. Wiley
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