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Archives : economic slowdown
Another update on the recession, doctors, and payments
A recent article in Physicians Practice does a great job of outlining how the recession is impacting health care in different ways. Outpatient surgeries have dropped while outpatient walk-in visits are up.
Something tells me it’s a good time to have some conservative options under your practice’s belt.
Bottom line: Now is not the time to be driven by unanalyzed fears or groundless optimism. Be responsible for understanding your own economic forecast.
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Tannus Quatre PT, MBA is a private practice consultant and principal with Vantage Clinical Solutions, Inc., a nationwide healthcare consulting and management firm located in Bend, OR and Denver, CO. Tannus specializes in the areas of healthcare marketing, strategy, and finance, and can be reached through the Vantage Clinical Solutions website.
Economic slowdown requires quick business
When working with practices, I often hear comments like this:
“It’s hard to compete with the hospitals, they have all the physicians locked in”
“It’s hard to compete with XYZ rehab corporation, they have so many locations”
“XYZ company has all the insurance contracts.”
However, in times of change, more is not always better. Small businesses – specifically private practices – may not have every insurance contract, every referral source locked up, or every location covered; but they do have something their large competitors do not — the ability to implement change quickly.
This is a big deal, especially in a slow economy, and it is often overlooked. More referral sources, more locations, and more contracts also means more to manage. Many organizations struggle to manage one or two referral sources, contracts or locations well, and adding more to the equation can sometimes simply compound inefficiencies, errors, or quality.
In response to the economic slowdown, having “more” requires greater efforts to change. Small business, private practices have a greater ability to implement change and respond more quickly to the market. Despite this, it is common for managers and owners to overlook this opportunity, and they often do not leverage this strength of their business to compete against the larger players in the market.
In fact, managers and owners often make business decisions that limit this quality of their practice. When making business decisions, consider how to sustain your practice’s agility and quickness to implement change. With our economic slowdown, everyone is rethinking how they do business to thrive in this climate. In response, implementing change could be like riding a jet ski for those in private practice, compared with navigating the Titanic for the behemoth hospital organizations or corporations.
To maintain quick and agile business practices during the economic slowdown, consider the following:
- Flexibility is an invaluable, intangible characteristic.
- Hire the person who offers to work a range of hours rather than the person who demands 40 hours per week from 9 am to 5pm.
- Avoid accruing large fixed costs, these will limit your ability to sustain a profit with highly variable revenue.
- Contracts with lengthy time commitments need hard consideration. Do you have a solid vision for where your practice will be in 12 months given our dynamic health care climate, let alone 3 or 5 years from now?
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Bridget Morehouse PT, MBA is a consultant with Steffes and Associates, a rehabilitation consulting firm based in Wisconsin.
Economic slowdown, new opportunities for change
Introduction by Tannus Quatre PT, MBA
I am pleased to welcome Bridget Morehouse PT, MBA to The Healthcare Entrepreneur. Bridget is a consultant with Steffes & Associates, a rehabilitation consulting firm based in Wisconsin. Bridget holds a Master’s degree in physical therapy and a Master’s in business administration from Marquette University, and is the reimbursement specialist for both the Wisconsin and Florida physical therapy association chapters. Bridget understands, and has a passion for the relationship between the “business brain” and the “clinical brain” in healthcare, which makes her a true healthcare entrepreneur.
Please enjoy Bridget’s commentary on the economic slowdown we are experiencing, and the opportunities that exist for change.
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Economic slowdown, new opportunities for change
by Bridget Morehouse PT, MBA
During a recent trip to New York City, the signs of the economic “slowdown” were everywhere – the word “SALE” plastered the store fronts, empty construction sites posted expired building permits, and headlines of “economic stimulus” appeared in the media.
Despite the perpetual signs of economic doom and gloom though, the customer service I received throughout my trip was phenomenal. The airline employee at the baggage check-in came out from behind the counter to help check my bag, the taxi cab drivers were exceptionally polite, and the retail sales clerks were at my heels to assist me with my potential purchases and lead me to the dressing room. Employees seemed desperately grateful for my business, as it symbolized their employment for another day.
The New York Times printed an article in the Sunday paper titled “Working Hard to Look Busy,” describing how because of the economic downturn, employees are seeking out any type of work – whether valuable or invaluable – to appear to be busy and justify their employment. This was evident on my trip with sales clerks constantly folding sweaters, wait staff checking at my table three or four times during my meal, and hotel staff constantly Swiffering the floor. I don’t believe these acts would normally be done with such enthusiasm, but under the cloud of our current economic conditions – who could appear to be idle? Given the economic conditions, appearing busy, whether valuable or not to the business is a survival instinct. Employees are enthusiastic about staying busy and taking on tasks that previously may have been undesirable.
As we are rewriting the myth that “healthcare is recession-proof,” our management strategies must beg for change. Last year’s management strategies will not produce the same outcome this year. Lean management, while foreign to many, will appear innovative and smart. We will need to look at our employees (and ourselves), and ask “are we working to add value to our practices or are we just working to appear busy?” For many practices, change is definitely needed, and it may be that optimizing clinic workflow and operations may be met with less resistance if we understand that the alternative may be no work at all. And training ourselves and our staff in patient satisfaction initiatives may have new meaning as keeping our patients satisfied helps assure that our clinics reduce every possible threat that may exist.
A changing economy requires just that: change. If we are willing to change our behavior, many of us will find that new opportunities exist, despite what is happening in the economy.
A portfolio manager, 30, who works for a private equity firm in New Jersey, scatters papers on his desk. When he skips out for long lunches, he colludes with friends in other offices to call him — and deliberately leaves behind his cellphone, with the ringer’s volume set to high. (Like many workers interviewed for this article he requested that neither his name nor his company be mentioned, worried that his position would be at risk.)
A lawyer at the New York office of an international firm wanted to give the impression he was working late at night — but he was stymied by office lighting that would dim when he left the room. So he brought in an oscillating fan, which tricked the motion detectors into keeping the lights on long after he’d departed.
Vantage in the news: “Keep the doors open” program (The Bulletin)
A popular program offered by Vantage Clinical Solutions received attention in The Bulletin today. The program is called “Keep the Doors Open,” and is the company’s response to the economic slowdown that is having a dire impact on many private practices throughout the country. The program includes a pro-bono strategy session which includes addressing the areas of reimbursement, volumes, cash flow, economic opportunities and threats, and marketing. Also included in the program are a number of additional free and low cost solutions that help private practice owners weather our current economic environment.
Click here to read the article – Thank you to The Bulletin for coverage of this important topic.
“It’s this perfect storm of things going on,” said Tannus Quatre, owner of Vantage Clinical Solutions, a health care consulting service based in Bend, who cited the unavailability of credit, job loss and the rise in the share of medical bills people are expected to pay themselves. “Private practices in the local economy are definitely being impacted.”
In the past, Quatre said, medical practices were often coming to Vantage for advice on how to grow and expand their business. These days, more people are asking how to hang on.
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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy. Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.
Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast. Tannus can be reached through the Vantage Clinical Solutions website by clicking here.
2009 may be a rough start for physicians
Some recent data suggests that physicians in private practice may have a slow start in 2009. This includes information from the American Hospital Association (AHA) which indicates that physicians are seeking more financial shelter from hospitals who typically provide a portion of a physician’s income through on-call responsibilities and basic employment.
Additional data from Medical Meetings and Medscape Medical News indicates that physicians may be planning to attend less continuing education in 2009, and that physicians have been receiving less in gifts from patients through the holiday season (respectively). A result of the economic slowdown for sure, these are only a few of the ways in which physicians may be impacted as we enter 2009.
This article from Medscape provides some very relevant information about the impact of the economy for physicians, as well as some useful ideas for ways to cushion the economic blows that are sure to be delivered in the first half of 2009.
Although most physicians are not losing their jobs or homes, they’re nonetheless feeling the repercussions of the recession that began in December 2007 and deepened during the financial crisis in the fall of 2008
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Also, the payment cycles of commercial insurers may have temporarily softened the effect of the recession for physicians who enjoyed crowded waiting rooms in late 2008. By that time, many if not most insured patients had met their annual deductible, motivating them to load up on needed care before year’s end while it was less expensive. Dr. Lipkis said that’s the reason why the last few months of 2008 were busier than usual for her. Come January 2009, the prospect of shouldering the entire cost of an office visit or procedure may discourage insured patients from making an appointment.
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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy. Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.
Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast. Tannus can be reached through the Vantage Clinical Solutions website by clicking here.
Medical practice in the slow economy
Medical practice in the slow economy is – to put it bluntly – tough. Requiring difficult decisions by physician owners with regard to ways to cut expenses, outsource billing operations, maximize reimbursement, and still provide quality patient care, the economic recession has wreaked havoc on many private practices to date.
And there is more to come.
I blogged about the closure of a small medical practice in my hometown of King City, CA back in September, and the harsh realities of an industry that must strike a balance between clinical expertise and business acumen in order for good, quality care to occur. The deepening recession we are facing is but a stark reminder of the importance of this, and it is imperative that practice owners realize that their attention to the business elements of their practice is critically important to the care of their patients.
I found the following article in yesterday’s Los Angeles Times which speaks to the cloud of insolvency that continues to loom over one area of medical specialty in particular – the primary care practice. I encourage you to take a look at the article as it captures many of the obstacles faced by primary care physicians in today’s economy: slowing payments for services, poor reimbursement, high overhead, patient cancellations because of inability to afford services, and the use of ancillary, cash-based services to supplement revenues.
[Walford] hadn’t drawn a paycheck for herself since February. On top of that, her practice has cost her $40,000 in personal savings and left her with $15,000 in credit card debt. Walford, 39, also owes $80,000 in medical school loans. She shops at Ross and other discount retailers, and rarely eats out or takes time off.
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Small general practices afford doctors autonomy to practice medicine as they see fit and can produce strong doctor-patient bonds. But these physicians have little or no clout to leverage better payments with insurers; they have no economy of scale, which makes overhead more burdensome.
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“As people are tightening their belts, they are deferring things they think are a luxury or not absolutely necessary,” said Long Beach physician Jeffrey Luther, president of the California Assn. of Family Physicians. “We see people putting off physicals and mammograms and blood tests because they just don’t have the cash.”
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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy. Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.
Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast. Tannus can be reached through the Vantage Clinical Solutions website by clicking here.
Adjusting ARM’s and reduced home equity placing medical bills second in line
In this article published in the Wall Street Journal online, the issue is addressed whereby the housing crisis is impacting the ability for Americans to pay their medical bills. This has been in the works for some time now, and with many ARM’s readjusting and the amount of equity in Americans’ homes seriously deflated, medical bills are piling up simply because they have to.
Medical practices will be wise to understand what is going on in the economy and how they can work with their patients to make it through this difficult economic time.
People have long resorted to borrowing against their homes to pay for medical care in times of illness or after an accident. But with home values plummeting and interest rates on adjustable mortgages ratcheting higher, some indebted patients are at risk of losing their homes in order to pay for surgery, cancer treatment, drugs and other big-ticket medical expenses. Other patients are forgoing health care in order to keep from losing their homes.
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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy. Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.
Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast. Tannus can be reached through the Vantage Clinical Solutions website by clicking here.
New hospital economic data provides insight into private practice economics
Hospitals are only separate from private medical practices by virtue of their specialty and operations, not their economic disposition.
New data from the American Hospital Association indicates that not only are elective procedures down, but also overall admissions as well. Additionally, the data indicate that there is a significant increase in the number of patients who can’t afford the cost of their care.
These data should catch the attention of private practice owners and administrators throughout the country as hospitals feel the same pains as private medical clinics when patients delay care or have a difficult time paying for services rendered.
This article from Yahoo News speaks to this new data made available by the American Hospital Association.
67 percent of hospitals saw some drop in elective procedures; 6 percent saw a significant drop.
63 percent saw some decline in overall admissions; 9 percent saw a bigger drop.
Inpatient and outpatient surgeries and emergency department visits were all down roughly 1 percent in the third quarter.
Half of hospitals have seen a moderate or significant jump in uncompensated care, with a jump averaging 8 percent. The association cites unemployed people losing their health insurance.
Total profit margin at the Database hospitals dropped from an average 6.1 percent in 2007’s third quarter to an average loss of 1.6 percent in 2008’s third quarter.
56 percent of hospitals are reconsidering or postponing renovations or expansions, and about 40 percent are delaying improvements to information technology or other equipment.
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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy. Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.
Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast. Tannus can be reached through the Vantage Clinical Solutions website by clicking here.
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