Kidney Center: Dr. Kant Tucker, CEO

by HCE Exchange on August 19, 2010

Recognizing a need in the community for conveniently located kidney dialysis treatment centers was just one catalyst for nephrologist Kant Tucker, MD. Tucker expanded his small Simi Valley, Calif. medical practice in 1981 to provide dialysis care to his patients who found it difficult to travel all the way to Los Angeles for treatment.

With a presence in this suburban Los Angeles community since 1981, Tucker is now CEO of Kidney Center, Inc. (KCI), a full-service medical management company focused on providing nephrology medical services, including kidney dialysis, to Southern California residents. The business is one of the fastest growing nephrologists medical groups and dialysis companies in the industry.

“When I saw the revenue stream I saw that medical practice had the smallest revenue stream,” said. “Then I realized I had a second reason to open a dialysis center – one was for the needs of my patients but I saw that every time a nephrologists gets $1 a dialysis center gets $9. It made financial sense to open a dialysis center.”

With that Tucker opened the first of now 14 outpatient kidney dialysis centers, with assistance from Simi Valley Hospital, his partner from 1985 to 1990. The hospital, which also saw a need for dialysis services in the community, provided seed money for the center.

The medical practice now consists of 16 physicians and the centers have about 50 physicians on staff as well. Altogether, KCI employs about 500 people.

Other Business Areas

When considering other business options, Tucker did his research and concluded that Laboratory and surgical centers would fit the needs of the community while falling into the range of his fiscal plans. Tucker opened a laboratory soon thereafter; from that point came diagnostics and research facilities.

“Before I was receiving 5% of the Medicare dollars,” he said. “Now with the various integrated companies I am getting somewhere in the neighborhood of 65% to 70% of the revenue stream. Also, earnings are up five to seven times what they would be if it were a medical practice alone.”

Organization’s Values

Nurturing employee loyalty is one component of Tucker’s corporate value structure. The CEO credits help from his family as well as assistance from staff members who act like family with the success of the organization. One of the ways Tucker nurtures the “extended family” relationship is in working with employees who might have deficiencies that would result in their firing from other organizations.

“We don’t just fire and hire people,” he said. “When I find my employees to be weak or deficient in something I don’t fire them I fix them.”

The company provides extensive training and works with employees to find the right positions for their skill sets. This type of policy has resulted in extreme loyalty on the part of his employees.

Another aspect of his corporate operations involves providing the best quality of care for their patients. “In a professional service business like this, reputation is extremely important,” he said. “I emphasize quality with my team. Perception becomes reality and with that you have to constantly be aware of any situation where we would look bad.”

Keeping Books Open

Physicians have open access to the company’s finances, Tucker said, with access to all salary information. He does this with the intent of keeping everyone on the same page when it comes to corporate finances, but he also believes this freedom of access serves as incentive among the physicians.

“When a physician knows how much another physician is earning it also creates an internal competition,” he said. “It leads to the question ‘Why is he making more money than me?’ We have an internal process in which a successful physician will discuss what it is he does that makes his contribution different from others.”

Employee Training

Employees at KCI are encouraged to attend seminars to enhance their skills and performance. One caveat of that special offer, however, is that any employee whose seminar attendance was paid for by the company must post a summary of the seminar on the company’s Intranet so that co-workers can learn from their experiences.

“If one person attends a seminar we want everyone to get the benefit of his or her learning,” he said.

Information Technology Investments

Technology helps to keep all KCI entities connected, Tucker said. The company has relationships with GAIA Software for the clinical management of its dialysis business and eClinicalWorks for billing and recordkeeping in medical practice; Prime Clinical Systems and QMS for billing

Challenges

A shortage of nurses has created a challenge for Tucker to keep his facilities staffed with professional help. However, just as with other roadblocks, Tucker used this challenge as an opportunity for improvement, starting a nursing school to create his own pipeline of potential nurses. Upon graduation, students are offered positions within KCI, but they are not required to work there.

Working with the U.S. Department of Health and Human Services presents another challenge for Tucker. Kidney dialysis is closely regulated and there is a strict process required in order to open and operate a dialysis center, as well as to add new services. Nothing new can happen without approval from the Department of Health, he said.

“That has been an Achilles heel for us,” he said. “When you open a dialysis center, and then you have to hire all the people and purchase all the equipment, that’s when the expense begins. Sometimes it can take as long as nine months just for the first visit. That has been a major cost component in opening a new dialysis center.”

The department makes a second visit for certification purposes, which creates another delay. A center cannot bill for dialysis treatment until it has been certified.

“We have to eat those costs,” he said, “and that can be as much as 20% to 25% of the initial cost of opening a center.”

A third challenge for Tucker is the payors. Medicare reimbursement has not increased and, in fact, has dwindled substantially, he said.

Despite these challenges, Tucker predicts that KCI will grow three-fold by 2010, making the company one of the largest providers of kidney dialysis services in the country.

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