Running a medical practice has never been tougher. Market forces create challenges at every turn. A trend toward consolidation means the competition is bigger and better capitalized. Reimbursements are declining, and as the economy continues to struggle and more people lose their access to health insurance, consumer demand has weakened.
Yet, it is still possible for independent-minded physicians in any setting to not only compete but to thrive. At the end of the day, what patients really want is a great doctor. If you are that great doctor, and if everybody knows it, you have a tremendous edge. However, you absolutely must be able to run a great business as well.”
Here are a few field-tested tips that can really help. They’re excerpted from my book, Excellence with an Edge: Practicing Medicine in a Competitive Environment
• Get serious about A/R management: Accounts receivable means money still owed for services already provided. It’s the management of this asset that distinguishes successful practicess from failed ones, and sane physicians from lunatics. To manage A/R effectively, you will need to first “clean up” old accounts by writing them off, evaluating large accounts, and negotiating payment from some accounts to collect more money sooner.
You will no doubt find that many of these patients are on payment plans. I can’t tell you how many patients we found with balances of over $1,000 who were paying at a rate of $15 a month. At that rate, it would take more than 5.5 years to repay the debt. These accounts warrant a re-negotiation! I would much rather have $500 or even $300 in my pocket today than the prospect of $15 a month for five-and-a-half years.
I strongly recommend aggressively pursuing accounts of those patients who have received a check from the insurance company for your services, cashed the check, but have refused to pay you.
• Prevent Denials: If you take insurance, be aware that 90% of denials are preventable. Remember this simple truth: “Clean claims get paid.” In order for Medicare, Medicaid or any insurance company to process a claim for a medical service, every single piece of information in the claim must be perfectly accurate. Failure to do exactly what is asked for will lead to denials.
Official estimates are that 10-15% of all healthcare claims are delayed or denied due to errors. I don’t know about you, but it seems to me that the real percentage is much higher. Up to 50 percent of denied claims are never re-filed, meaning that by attrition, doctor’s offices are giving away money often due to simple mistakes.
The best way to manage denials is to prevent them in the first place by submitting clean claims that have been appropriately coded and ‘scrubbed’ for errors. Most billing software programs have optional claims scrubbing modules, and many external services can assist you in this function.
• Know the ROI on Any New Technique or Technology: Before making a decision on bring a new practitioner or a potentially revenue-generating procedure, technique or piece of equipment into your practice, it is critical that you understand how to calculate the return on investment (ROI). Excellence with an Edge provides some simple formulas. However, keep in mind that to rely exclusively on financial analysis to make all your practice decisions ignores your prime motivation: to provide outstanding care to your patients and their families…to feel a sense of purpose, worthwhile work, and making a difference.
A surgeon friend was trying to decide whether he should add bariatric surgery to his practice. I helped him do the ROI analysis and, financially, it was a wash. He would make money, but not necessarily enough to justify the investment in new equipment, office furniture, special exam tables, etc. And yet, he chose to do it anyway. He felt he was able to connect with these patients in a way that was intrinsically satisfying to him. His practice exploded! Not only did he develop a large bariatric surgical practice, but his general surgical practice took off as well. Why? He became increasingly well-regarded in the community as a doctor who delivered exceptional care to his patients.
• Treat referring physicians like gold. Nurturing relationships with referring physicians is the most important way to build your practice. They hold the key to explosive growth. Try to understand their needs and exceed their expectations. Communicate frequently—preferably by phone. Follow up after patient visits, surgeries, and other “touch points.” Do whatever you can to make their lives easier.
During my residency, one of my senior residents, a guy whom I respected tremendously, gave me a couple of words of advice. ‘There are only three words that are acceptable for you to say when being given an instruction by somebody senior to you. Those words are, “Done. What else?”’I highly recommend that phrase as a starting point in practice building! Allow your referring physician to feel that he can wash his hands of any issues that might arise during your participation in the care of a particular patient.”
• Look for ways to make a personal connection with patients. It is so important to make a personal connection. One way I like to connect with patients is by creating drawings for them during each discussion about treatments, rather than relying on prefabricated illustrations. The patients love it. They feel the act of drawing their anatomy and their issues focuses me and ensures that I am speaking only of them and not speaking in abstract terms about generic patients. There is a quaintness about it and also a bit of self-deprecation involved, particularly if you are (as I am) a horrendous artist.
To create a genuine and personal relationship with a patient who will remain loyal to you, never be condescending or use medical jargon without explaining what you mean. Patients can sniff out arrogance and condescension quicker than you can imagine, and this will send them to your competitors.
• Celebrate your staff. Not only is it the right thing to do, it connects directly to the bottom line. Smart physicians let staff members know at every opportunity how much their contributions are appreciated—and what a difference they make in the lives of patients. You cannot provide the excellent care you do if your phones are not answered appropriately and the paperwork is not completed properly. If your scheduling is not efficient, you will pay the price. If patients are not greeted warmly and cared for with respect and compassion, your ability to have a meaningful clinical encounter may be compromised. And the diligence and skill with which billing and collections are performed will have a great bearing on your personal profitability.
Here are five common mistakes I see physicians make that can really hurt the health of their practices. Don’t make these errors!
Mistake #1: Acting like a renter instead of an owner. I learned this lesson from experience. In 1999, I got distracted from my practice by a website venture. I did not ignore my patients nor provide sub-standard care, but I failed to serve the needs of my referring physicians. I was always trying to bring the conversation around to my new website business.
In looking back through the eyes of those referring physicians, I can only surmise that I failed to act like ‘an owner’ or like I particularly cared about serving their needs. In short, I lowered their barrier to exit from my practice. This was particularly disruptive within my group. My practice volume dropped, my receipts plummeted, and my performance as a managing partner definitely took a big hit. Fortunately, the practice recovered quickly once I emerged from this learning experience. Others, however, may not be as fortunate.
Mistake #2: Disengaging from patients or colleagues: Many doctors disengage through nonverbal cues. This is something that patients, other doctors, and staff can sense easily, so be very aware of your body language. Relationship killers include things like standing instead of sitting down with a patient, looking at your watch, and answering phone calls or emails during a conversation. These can be potential practice destroyers.
Sit down every time you see a patient. It’s good for business. It’s also the right thing to do. It alleviates patient anxiety. It creates a bond. It makes patients feel less vulnerable, and it makes them like you more because it makes them feel as if they are the only person you care about at that moment. Answering phone calls and emais, or leaning out the door are behaviors that do not engender that feeling. And they are just plain rude.
Mistake #3: Disappearing from sight—and from mind: When a physician fails to keep her name in the forefront of the minds of referring physicians, she “disappears.” Make sure this doesn’t happen. Show up in the cafeteria. Make phone calls, and send notes to referring physicians. Attend hospital functions. While there are many important reasons to attend these events in the first pace, a key one is to keep the patient referrals coming.
Another disappearing act that I believe is even more critical and more destructive to a practice is a failure to admit, to apologize for, and, most importantly, to manage complications of a patient’s care. The surest way to engage in practice-destroying behavior is to become defensive or to be unsympathetic with the patients and their families and what they are going through. When you blame outside forces and events, or you fail to be present to care for your patient and his family, you let them down. You lose their trust and diminish your practice.
Mistake #4: “Disowning” a practice: Another potential way to destroy your practice is to buy someone else’s practice or sell your own to a third party. In this era of declining reimbursement and higher expectations and costs, more and more physician practices are becoming owned by third parties, which are frequently hospitals or large multi-specialty groups. These arrangements are risky because hospital managers don’t necessarily have the skill set required to run individual physician practices. I’m not saying these arrangements should never be entertained, just that both sides need to be aware of the potential pitfalls.
Some physicians feel that they can rest on their laurels when they sell their practices to larger groups and/or hospitals and become employees. There is a danger of adopting that ‘renter’ mentality when moving from an ownership position to employee role. Failure to maintain a sense of ownership and control is often the death knell for a successful clinical practice.
Mistake #5: “Dissing” others: It is easy to manage people down. A physician might blame transporters when a patient complains about having to wait too long, or join in when colleagues complain about radiology services, or make comments like, “The other specialist you saw for a second opinion is an idiot—I’m amazed that he got his license back!” You may not realize how destructive this is. Managing others down, rather than managing them up, creates a we/they mentality between you and your patients, you and your staff, you and the hospital, and so on. This makes it very difficult to align goals, expectations, and outcomes. In the end, it makes your job harder. Most importantly, it reflects poorly on you.
The bottom line, of course, is that practicing physicians want to improve people’s lives. And it’s simply a 21st Century reality that doing so requires a physician to enlarge his or her sphere of influence and maximize his or her income—in other words, to master the business side of medicine.
Michael T. Harris, MD, is vice chairman of surgery at The Mount Sinai School of Medicine, New York, NY. He is a nationally recognized expert in the field of gastrointestinal surgery, and a pioneer the use of minimally invasive (laparoscopic) surgical techniques for Crohn’s disease and colitis. He has one of the largest IBD practices in the nation, and is responsible for the management of Surgical Associates, a 45-surgeon faculty practice. His own practice consistently scores in the 99th percentile nationally on patient satisfaction surveys.
Dr. Harris is an officer of the Mount Sinai Hospital Medical Board, and serves on the Board of Governors of Faculty Practice Associates, the 840-physician multispecialty group of The Mount Sinai School of Medicine. He created and is the course director of the popular “Business of Medicine” elective, one of the first courses of its kind for medical students in the country. In 2009, Dr. Harris was awarded the National Leadership in Medicine Award by Studer Group® and a Gold DOC Award from the Arnold P. Gold Foundation for humanism in medicine. His latest book is Excellence with an Edge: Practicing Medicine in a Competitive Environment (Fire Starter Publishing, 2010)
Interested in learning more about how to build and maintain a successful, thriving integrative medical practice? Come to Holistic Primary Care’s Third Annual Heal Thy Practice: Transforming Primary Care conference, in beautiful Long Beach, CA, November 4-6, 2011. Featured speakers include:
Steven Masley, MD, (2011 Conference Chair): Cutting Edge Nutrition for Primary Care Physicians and Making Nutrition-Based Medicine Work in a Busy Practice
Kent Holtorf, MD: Working For Your Patients, Not Their Insurance Plans: The Holtorf Model for Optimizing Care of Complex Patients
Vern Cherewatenko, MD: Keeping It Simple: The SimpleCare Model of Direct-Pay Primary Care
Pamela Wible, MD: Creating an Ideal Clinic for Your Community
Lee Surkin, MD: Evaluating Technologies & Techniques
for Creating New Practice Revenue
Alan Dumoff, JD: Medicolegal Issues in Integrative Medicine
JJ Virgin, CNS: Optimizing Weight Loss Outcomes
Philippa Cheetham, MD, Center for Holistic Urology, Columbia University: Active Holistic
Surveillance for Prostate Cancer: How to Keep Men in YOUR Office, Not the Oncologic Surgeon’s!
PLUS…….A Special Sunday Brunch workshop with James Gordon, MD, Founder-Director, Center for Mind-Body Medicine: Getting Unstuck: Mind-Body Exercises for Overcoming Inner Obstacles to Your Ideal Practice
