Presentation of a new service

1. Adding a Mohs Surgery
Practice to Layman Hospital
Systems
By: Madelyn Ciotola, Monica Gee, Erin Humphreys, Amber Moses, Modupe Sarratt, and
Marshall Wilde

2. Mohs Surgery Background

3. What is Mohs Surgery?
 Mohs is a type of microsurgery to remove skin
cancers (Snow & Mikhail, 2004).
 Mohs surgery was named after Dr. Frederick Mohs,
who developed the technique in the 1930s.
 Perry Robins, a dermatologist, advanced and refined
the procedure to treat common types of skin cancer
but with better cosmetic results than traditional
surgical excision techniques.
 Mohs surgery is the most effective technique for
treating basal cell carcinomas and squamous cell
carcinomas.
 Mohs also creates less scarring than surgical
excision.

4. Describe the circumstances of the project.
 The Layman Hospital System is located in South Florida, where many people go for
the warmer climate.
 Skin cancer is the most commonly diagnosed cancer with about 100,000 people in
the U.S. being diagnosed annually (Siegel, Miller, & Jemal, 2018).
 The most serious preventable risk factor for skin cancer is sun exposure, which is
why Florida has the second highest rating of skin cancer in the U.S. (Florida Society
of Dermatology and Dermatologic Surgery, n.d.).
 The majority of Layman Hospital patients are the elderly, veterans, and retired
government workers.
 This population has both a greater need for Mohs surgery and a greater ability to
pay for the service.

5. Why is there a need for this product,
facility, entity, or service?
 South Florida population is susceptible to skin cancer and is expected to grow by
one third in the next 30 years (Office of Economic and Demographic Research,
2016).
 A Mohs surgery service would provide a more convenient, cosmetically pleasing,
and financially stable solution to skin cancer.
 LHS system right now does not provide Mohs surgery, meaning that patients who
want this treatment option have to be referred out, leaving room for discontinuity
of care.
 Going outside the LHS system causes patients to see providers outside of their
insurance network, causing more out-of-pocket for both the patient and the
insurance company.

6. Who would it serve?
 The beneficiary of a Mohs surgery service would be
skin cancer patients.
 Approximately 75% of skin cancers can be treated by
Mohs surgery, making it the most sought after
treatment by the population served by the LHS
(Kantor, 2017).
 The LHS patient population is expected to grow over
the next 30 years:
 Miami-Dade county population will increase from 2.7
million to 3.6 million by the year 2045 (Office of
Economic and Demographic Research, 2016).
 The over 60 population will more than double in size
(Office of Economic and Demographic Research, 2016).
 Mohs surgery will provide better long-term
outcomes, as well as better cosmetic outcomes
compared to traditional surgical excisions.
(Zandifar, 2018)

7. Environmental and Organizational
Assessment

8. Market Segment Served by Mohs Surgery
Service Line
 About 5.6 million cases of skin cancer are
diagnosed annually in the United States,
making it the most common type of cancer
(Rogers, Weinstock, Feldmen, & Coldiron,
2015).
 About 90% are caused by UV exposure (Koh,
Geller, Miller, Grossbart, & Lew, 1996).
 South Florida contains a higher than average
UV exposure rate, as well as a higher than
average elderly population.
 Due to this, Mohs surgery will be extremely
beneficial to the LHS population served in
South Florida.
(Winslow, 2010)

9. Risks, Roadblocks, and Regulatory Issues
 There are very few regulatory obstacles that prevent the implementation of a Mohs
surgery service.
 Florida does not impose additional licensing or registration requirements for most
Mohs surgeries.
 Most surgeries will fall under a Level I service as they usually require the usage of
only local anesthetic. However some surgeries may fall under a Level II if minimal
sedation is needed, which would require a minor registration requirement with an
inspection.
 The histopathology service would also require an additional license.

10. Risks, Roadblocks, and Regulatory Issues
(cont’d)
 One statute that would be a concern would be the Anti-Self Referral Stark statute, which
prohibits physicians from referring any CMS covered Designated Health Service (DHS)
to a provider in which they have a financial interest (Adashi & Kocher, 2015).
 Histopathology for Mohs is a DHS but intragroup referrals fit under an exception to
Stark so legal issues would be minimal (Igel & Stringer, 2015).
 There should also not be any substantial internal resistance to the addition of this
service due to :
 Mohs surgery is becoming increasingly the standard of care for skin cancer treatment over
traditional surgical excisions
 The existing dermatology practice will enroll more patients allowing for a greater financial
reward for the practice.

11. Factors Working Against the Mohs Surgery
Service Line
 The primary obstacle to the addition of a Mohs surgery service line is financial.
 In order to balance out the implementation costs, many referrals to outside providers
will need to be recaptured and transitioned into services completed within the LHS.
 Marketing to the LHS population will include the better cosmetic outcome of the
surgery, financial benefits of seeing an in-network provider and the qualifications of the
surgeon hired by LHS.
 In-housing the Mohs surgery will allow for:
 Better patient experience
 Simplified billing
 Reduced costs
 Less administrative burden for physicians

12. Proposed Service

13. Mohs Surgery Service
 Mohs surgery removes skin cancer through a microsurgery process primarily performed
in an outpatient setting.
 Facilities include:
 Existing outpatient dermatology service office
 Space in our existing ambulatory surgery center and hospital
 Existing pathology services at dermatology office will need to be expanded to support
the Mohs surgery service line
 Mohs surgery will also require additional staff including:
 Mohs surgery trained dermatologist
 Pathology support staff
 Existing dermatology staff with additional training in Mohs surgery

14. Ownership and Management
 LHS can own and manage the service directly or though an affiliated
group because Florida does not have a corporate practice of medicine
doctrine
 This means that direct ownership of physician practices can be owned by
corporations like LHS (Swanson, 2013)
 Direct ownership will avoid potential conflicts with the Stark Anti-Self
Referral Law by allowing the service to fall under the intragroup exception
for referrals from LHS’s existing dermatologists for related lab services
(Igel & Stringer, 2015)

15. Implementation Challenges
 Implementation challenges for a Mohs surgery service line are :
 Hiring appropriate staff
 Developing policies and procedures
 Addressing objections from contracted insurers and current Mohs surgery providers
 Mohs surgeons have an annual salary of about $600,000 (Rosenthal, 2014)
 The existing staff would need to receive additional training and there may be a
potential for hiring more staff to compensate for increased volume of patients

16. Implementation Challenges (cont’d)
 There needs to be multiple policies and procedures in place to address the
following issues:
 Referrals
 Patient care
 Determination of which services will be handled at the outpatient level and which will
require ambulatory services
 Additional cost of Mohs surgery versus traditional surgical excisions may cause
insurance companies to be in shock. However, the American Academy of
Dermatology has recognized Mohs surgery as the standard of care for the
treatment of skin cancer.
 External Mohs surgeons may object to the addition of the service line by LHS due
to the loss of business

17. Market Analysis

18. Stakeholders and Target Audience
 Patients: aging population in South Florida are at a higher risk for ultraviolet
radiation. The rate of patients younger than 40 being diagnosed with skin cancer
has increased. These patients are going to opt for treatment that has better
cosmetic outcomes.
 Payers such as insurance companies and Medicare: can save money through the
elimination of the chance of future treatments or procedures, at a cost-competitive
rate to other treatment modalities.
 Existing LHS staff: better financial position for LHS, referrals are kept within the
system, and patients remain on the same electronic health record.

19. Opposing Stakeholders
 Other healthcare organizations who perform Mohs surgery.
 It may impact other economic arrangements between LHS and these providers that
should be both anticipated and addressed.
 Providers using traditional surgical methods to excise basal cell carniomas
 Mohs surgery more profitable and desirable
 Eroded the share of skin cancers treated by alternative methods
 This objection may be diminished through the potential of additional income through
the LHS system
 Private insurers
 Mohs surgery by an in-network provider would provide less pay overall for the insurance
companies which will extinguish these objections

20. Promotion of Service
 Hospital needs to take an active role in educating referring physicians about the
benefits of Mohs surgery for their patients
 LHS’ own dermatologists should recommend the surgery to their patients through
increased referrals
 Advertising at primary care offices, as well as dermatological meetings and
conferences
 Other traditional methods, such as:
 Social media
 Content marketing
 Community health outreach
 Branding strategies

21. Expected Hurdles
 Increasing knowledge of the service in the referring community (~$200,000
marketing budget)
 Hiring a Mohs surgeon (~$600,000 annual salary)
 Developing the office and pathology support necessary to support the surgeon
(~$100,000 startup costs)
 Cost of physician recruitment (~$200,000 in recruitment and onboarding costs)
 Histopathology support services must be developed and provided (expansion of
existing services)

22. Resources

23. Funding Sources
 Internal reserves: constitute a ready source of available funds
through the regular budgeting process. Concerns include:
timely availability of funds, their adequacy, and impact of
depleting reserves on LHS’ existing bond and debt obligations
 Commercial loans and bonds: businesses are able to seek out a
loan from a large financial institution. Based on
creditworthiness of business and repayment plan.
 Grants: The Skin Care Foundation, Robins Fund for the
Advancement of Mohs Surgery, Cutting Edge Research Grant,
and the National Cancer Institute
 Shareholders: LHS could form a privately-held entity and sell
shares to interested parties. Complications may arise from the
Stark anti-self-referral statute for this type of funding

24. Fiscal Level of Effort
 There is a fairly low fiscal level of effort given the modest initial investments
required ($1.9 million for startup and first year costs) and the relatively quick return
on investment (~$600,000 annual revenues)
 Gross revenues of $827 million resulted in net income of $7 million at the end of
last fiscal year
 Mohs surgery would have significant positive impact for a minor fiscal effort,
considering the size of the system
 Primary costs of the project are predictable and modest compared to the scope of
LHS’ extensive hospital system activities

25. Human Resources Requirements
 Most of the project’s expenses will be in human resources
 Recruitment of Mohs surgeon, nursing, and pathology support staff are necessary
with little need for capital improvements
 The market for Mohs surgery will reach saturation with the addition of two more
providers
 The most critical consideration in this project is to hire dependable and marketable
staff
 Additional training for the dermatologist as well as the support staff is necessary

26. List of Resources for Financial Assistance
 National Children's Cancer Society http://www.thenccs.org/
 Help for You and Your Family at http://www.acf.hhs.gov/help
 Home Care for Cancer Patients at http://www.cancer.gov/about-
cancer/managing-care/home-care-fact-sheet
 PAF's Scholarships for cancer survivors at
http://www.patientadvocate.org/index.php?p=69

27. References
Adashi, E. Y., & Kocher, R. P. (2015). Physician self-referral: Regulation by
exceptions. Jama, 313(5), 457-458.
Florida Society of Dermatology and Dermatologic Surgery. (n.d.). Quick facts about skin
cancer. Retrieved from https://fsdds.org/patients/skin_cancer/
Igel, M., & Stringer, T. (2015). Stark Law Impact on Medical Practice. In The Complete Business
Guide for a Successful Medical Practice (pp. 121-126). Springer, Cham.
Kantor, J. (2017). Costs and Economics of Skin Cancer Management, Mohs Surgery, and
Surgical Reconstruction. Plastic and Reconstructive Surgery Global Open, 5(6).
Office of Economic and Demographic Research. (2016). Population and Demographic Data.
Retrieved from http://edr.state.fl.us/Content/population-
demographics/data/MediumProjections_2016.pdf
Rosenthal, E. (2014, Jan 18). Patients’ costs skyrocket; specialists’ incomes soar. New York
Times, A1.

28. References
Siegel, R. L., Miller, K. D., & Jemal, A. (2018). Cancer statistics, 2018. CA: a cancer journal for
clinicians, 68(1), 7-30.
Snow, S. N., & Mikhail, G. R. (Eds.). (2004). Mohs micrographic surgery. Univ. of Wisconsin Press.
Swanson, E. (2013). The commercialization of plastic surgery. Aesthetic surgery journal, 33(7),
1065-1068.
Winslow, T. (2010). Mohs surgery. Retrieved from
https://siteman.wustl.edu/glossary/cdr0000256570/
Zandifar, H. (2018) Facial Plastic Surgery & Mohs Surgery. Retrieved from
http://www.ohniww.org/mohs-surgery-plastic-surgeon-los-angeles/