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Archives : Economy
Time to throw in the towel on private practice…or is it?
I don’t buy it.
An article in the New York Times today titled, “More Doctors Giving Up Private Practices,” told the story of an increasing number of physicians who are finding their “bliss” through employed, salaried positions, rather than at the helm of their own private practice. The reason – increased costs, decreased pay, and ultimately unhappier doctors in the private practice environment. Again, I don’t buy it.
The article spoke of the increasing financial burden on physicians who, in order to keep up with the demands of today’s healthcare arena, must invest heavily into expensive electronic medical record systems (EMR) and practice management softare (PMS), along with the staff required to collect payment from a growing number of patients who lack the financial wherewithal to pay their bills. Sure, the challenges are real, but it’s still bullhonkey.
The silver lining in this shift toward larger, safer, and inevitably more monopolized healthcare practice – if there is one – the article goes on to say, is the continuum of care that is far facilitated by larger, more integrated systems which employ large numbers of physicians from a variety of specialties. Not convinced.
The Medical Group Management Association (MGMA) reports - according to the article - that in 2005 more than 67% of medical practices were physician owned, however three short years later this number had dropped to below 50%. With admitedly disturbing facts such as this, and the industry knowledge that is near and dear to my heart – that private practice owners are, in fact, struggling in pockets across the country – how could I possibly scoff at the fact that an article in the New York Times suggests that quite possibly it is time to throw in the towel by the physician masses?
Because it’s short sighted, cowardly, and undermines the creative and entrepreneurial fabric from which many of our country’s greatest practices are woven.
In a nutshell, it’s the wrong way to go.
I’ve been around healthcare my entire life, and my professional career has known nothing else. I care deeply about people, and understand that passion, freedom, autonomy, and creativity are the inspiration behind the greatest care that our country can offer. I also understand that in order to attain autonomy, passion, freedom, and creativity requires risk, hard work, and often times, failure.
I’ve worked salaried positions and have spent much of my life in a risk averse bubble, looking fondly at the status quo and fearing anything that risked upsetting it.
But I’ve also lived the other side. The side that guarantees nothing, but promises everything. The side that allows me to be exactly who I’ve been created to be, and to relish in failure as it is a means by which I will improve my service to others. It is this side about which I am passionate, and about which I know I can change my life, the lives of others, and through my current mission with Vantage Clinical Solutions, change healthcare.
I don’t think the healthcare industry is going to benefit from bigger companies who can promise the world to its salaried professionals, while placing handcuffs on the passion and creativity that comes only with the ability to chart one’s own professional course. I don’t think the continuity of care is going to suffer if small town doctors have to refer to one another rather than down the hall in order to provide the specialty care that is needed of their patients. And I don’t think that failure is inevitable to those who try to make it work.
There are challenges, yes. We, at Vantage Clinical Solutions help private practice owners deal with them everyday. We feel the pressures of the economy just like the next guy. The difference is that we see the challenges as an opportunity to look to entrepreneurship, creativity, and innovation as the tool from which our problems will be fixed.
We understand that the “corporate” way which benefits from huge economies of scale and infrastructural efficiencies does indeed have merit – but more importantly we know that it is not the only answer. We work with numerous private practice owners every day who are delivering healthcare their way, doing it profitably, and changing their patients’ lives in the process.
At the risk of belaboring my diatribe of a post, I do want to make clear that I understand that entrepreneurship indeed is not for everyone, and the thousands upon thousands of professional, caring, and excellent healthcare providers who do thrive in the corporate, structured environment, need not change a thing. Indeed, consolidation and centralization is a viable solution to many of the challenges we face in the healthcare industry.
My point, however, is to suggest that it is not the only solution, and to those who’s fuel does come from a burning passion to create, be different, and deliver care in their own way – bear down and get after it.
The system that the NY Times article speaks of is not for you.
Cash flow considerations
There is a trend of “slowing payments” over the past several months and we are noticing clinics have higher percentages of aged account balances, particularly from patient responsibility, sitting out in the greater than 90 or 120 day columns. With individuals continuing to struggle in this economy, they are more quickly and frequently making the decision that their medical bills can be put on hold. Clinic owners need to recognize that this may be happening in their practice, and they should develop tactics to handle higher days sales outstanding, slowing cash flow, and patients who are creating their own payment plans (or deciding not to pay at all).
Realizing that some compassion needs to come in to play with those that are financially struggling, we are reminded by Peter Lucash that we should be collecting us much up front (co-pays and deductibles) from patients as possible; we definately should have the ability to receive credit card payments; and we should have policies and procedures in place for cash pay patients, financial hardship, and payment plans.
Implementing a collection at time of service policy will take some time. When making appointments, tell patients that you will be asking for payment. At first, if the patient balks (such as saying they don’t have their checkbook) let it pass, but tell them that you are asking for payment from now on. Over several months, you should see your collections rising and A/R dropping. At some point, of course, collections will flatten, the timing of collections stabilizes.
Collections are always a challenge within a practice, as you balance the desire to help patients with the business side. You want your staff your staff to remain compassionate and caring, and they are often the best people to work with your patients to collect with compassion.
Female patients not immune from economy’s impact on healthcare services
We’re blogging about this quite often here at The Healthcare Entrepreneur, but in case you haven’t noticed, the souring economy is having an impact on the healthcare provided through private medical, physical therapy, and dental practices. People are delaying care, paying more slowly, and losing insurance coverage – all of which have a direct impact on the ability for private practices to run strong.
It seems that women are no exception.
In this article from WebMD Health, a new study released by the National Women’s Health Resource Center (NWHRC) is said to indicate that the rising costs of healthcare combined with the economic downturn is having a major impact on women’s decisions regarding their care.
- 28% of women said they put off going to the doctor during an illness for financial reasons.
- 19% said they had skipped recommended medical procedures, such as Pap smears or mammograms, because of cost.
- 18% said they had taken less than the recommended dosage of a prescription drug in order to make it last longer and 18% failed to fill some prescriptions.
- Only 4% said they had put off taking their children to the doctor because of the cost.
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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.
Moody’s revises healthcare outlook from “stable” to “negative”
Maybe we only think we are recession proof. With the seemingly never ending spiral of credit, housing and banking crises ravaging through the global economy, investors are starting to take notice that healthcare doesn’t exist in a silo.
Medical practices, hospitals, and physical therapy clinics get paid by someone, and if that someone is in financial trouble, you can bet the problems don’t stop at the practices’ front doors. The someone just so happens to be “everyone,” or so it seems in our economy today.
This article from the ChicagoTribune.com discusses Moody’s downgrade of the healthcare industry’s 12- to 18- month outlook.
The New York-based financial ratings firm has issued reports in the past two weeks on various sectors, from hospitals and medical devices to insurance companies, revising the health-care industry’s 12- to 18-month outlook to “negative” from “stable.”
Moody’s sees fewer patients seeking medical care, particularly elective surgeries, while more people could lose their health-care coverage altogether. Such trends will lead people to delay getting medical care or avoiding treatment.
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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.
“Keep the Doors Open”: New program offered by Vantage Clinical Solutions in response to slowing economy
The following was shared in a press release made available earlier today by Vantage Clinical Solutions, moderator of The Healthcare Entrepreneur Blog.
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Vantage Clinical Solutions Offers Free Help
to Medical Practices Impacted by Slowing Economy
New “Keep the Doors Open” Program Begins Monday, November 17th
Bend, Oregon (November 13, 2008) Responding to the economic conditions currently affecting the local healthcare market, Vantage Clinical Solutions has initiated a free program to assist local healthcare practices with financial and business planning in preparation for a projected tough first quarter of 2009 for healthcare practices. The program is called “Keep the Doors Open,” and is intended for small to medium-sized healthcare practices (medical, dental, physical therapy, optometry, etc.) that are either experiencing or anticipating significant financial turbulence.
Serving communities with a unique combination of healthcare consulting and management services, Vantage Clinical Solutions is in a position to recognize that help is needed quickly in order to keep many small healthcare practices in business. “We follow the trends daily, and have recognized that if something isn’t done to help some of the smaller healthcare practices, our community is going to see a number of them struggle to remain open as we enter 2009,” said Tannus Quatre, principal of Vantage Clinical Solutions. “This will have myriad effects on local communities, and it’s important that something is done to lessen this occurrence as we experience this economic downturn.”
The way in which healthcare practices are being affected stems from a rise in unemployment, which affects the number of insured persons, and from changes to many insurance plans which now require higher deductibles, co-pays, and larger portions of bills which have become the responsibility of the patient. Combined with the tightening of credit markets and declining home values, healthcare practices are entering a “perfect storm” which will affect how and when they are paid for services. “We’ve seen patients already begin to delay treatments and prescriptions because they can’t afford their responsible portion of the bill,” said Quatre. “This impacts the overall volume of patients seeking healthcare services, which results in an overall drop in private practice revenues for many small healthcare businesses out there. We only project this to get worse in the first quarter of 2009 when deductibles renew and patients face larger out of pocket expenditures for healthcare services.”
The Keep the Doors Open program consists of a free strategy session of up to 2 hours in length at which time practice owners and administrators can openly share their concerns regarding their practice, and review materials such as financial statements, marketing strategies, and practice reports with a business consultant who specializes in healthcare practices. This is the first time that Vantage Clinical Solutions has offered a service of this kind in response to economic conditions, and feels that the program will allow practice owners a structured, unintimidating environment through which to seek help. The strategy session will provide ample time to dig into detailed areas of the practice, providing for the development of concrete ideas and strategies that will help healthcare practices brace for the economic storm facing the healthcare industry. The program begins November 17th and will run through March 31, 2009. Click here to set up a meeting through the “Keep the Doors Open” program.
Vantage Clinical Solutions incorporated in 2006 and has seen steady growth since inception. The company assists healthcare practices throughout the country and has partnered with industry leaders to provide the highest quality of consulting and management service available to small and medium-sized practices. In May of this year, Vantage partnered with a consulting firm in Colorado which provides Vantage clients with 30+ years of industry expertise in the management of healthcare practices nationwide.
According to the website, www.vantageclinicalsolutions.com, Vantage Clinical Solutions exists for the mission of improving healthcare through entrepreneurship, offeringhealthcare consulting for clinical practices through Vantage Consulting, fully-hosted practice management solutions through Vantage Management, and logistical and financial ownership assistance for first-time practice owners through Vantage Ownership.
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For more information on Vantage Clinical Solutions, Inc., visit www.vantageclinicalsolutions.com.
Economic impacts on healthcare
Our economic woes are far from over. This article published by the Medical Group Management Association (MGMA) validates some of what many of us already know to be true:
1. Healthcare services are being viewed as discretionary. Patients are foregoing certain operations, services, and prescriptions simply because they can’t afford it. This is impacting private practices through reduced volumes of services rendered and procedures performed.
2. The uninsured are increasing. With increasing job losses, reliance on COBRA coverage has increased, but at a significant cost to the insured. As coverage expires and patients become unable to pay for the expensive coverage, growth in the uninsured population will likely continue.
3. Payment for services are slowing. For those patients that do seek healthcare services, payments for those services are slowing. Co-pays and responsible portions of claims that go to the patient find themselves competing against payment of other household bills such as credit card debt, mortgages, and groceries.
All is not bleak, but private practice owners must be prepared. Make sure you are collecting your co-pays at the time of service, setting up reasonable payment plans with paying patients, and stockpiling cash reserves in order to weather the economic storm that is likely to last a while.
Published in July, the Rockefeller Foundation/Time Campaign for American Workers Survey revealed that because of costs:
- 23 percent of respondents had not filled a prescription, up from 17 percent in 2007;
- 23 percent had gone without health insurance, up from 20 percent in 2007; and
- 25 percent had not visited a doctor, up from 18 percent the year before.
_________________
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 care actually can wait…
We’ve blogged about it before – times are tough, and some medical care is making its way into the discretionary category of family budgets.
Here is an excellent article from the Washington Post speaking to the issue of medical care as it pertains to the constricting family budget. Reducing needed medical care is obviously not the right long term approach, but medical care is a bill to pay, and when budgets shrink, tough decisions will be made by our patients.
And yep, this affects the bottom line of private practices throughout the U.S., so we’d better have a strategy in place to stay in the black.
Nationwide, the number of consumers who went without a prescription, tapped into retirement savings to pay for health care or skipped a doctor visit for themselves or a child has risen since last year, according to a survey released this summer by the Rockefeller Foundation and Time magazine. One-quarter of the 2,000 respondents, for example, said they had decided not to see a doctor because of cost in 2008, up from 18 percent the year before. Ten percent said they did not take a child to the doctor for the same reason.
_________________
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.
Obama v. McCain: Is healthcare a right?
Over the past few weeks, healthcare has not been the top story in the news. America’s money has been the focus recently, and rightfully so.
The two are very much related though, as money buys healthcare, and good health allows our economy to generate money.
For those that have been following the presidential race, it should be clear that one of the biggest fundamental differences between the candidates has to do with the level of regulation applied to the healthcare industry. Obama believes that healthcare is a right, and should be available to every American. McCain believes that healthcare is a responsibility, and that government’s role should be to create an environment where Americans can have the choice to access affordable healthcare through specific incentives and tax credits.
As a healthcare entrepreneur myself, I certainly believe in the power of the free market to drive innovation, creativity, and progress. In fact, helping physicians, physical therapists, dentists, and the like to leverage the entrepreneurial spirit for the benefit of their patients and themselves is the sole focus of our company.
This said, this question over whether or not healthcare is a right or a responsibility shouldn’t be taken flippantly, and deserves some thought and reflection from those of us that focus our professional careers around the issue. While free market principles undoubtedly play a positive role in catapulting forward our technologies and business models within the healthcare industry, there is a role for the protections afforded Americans through systematic oversight.
I appreciate the comments made by Paul Hsieh, MD in his blog, We Stand Firm, in regard to the view that healthcare is a commodity, but would add that a balance can be achieved whereby one person’s right to access healthcare doesn’t necessarily have to infringe upon another’s right to (or to not) provide it.
The fact that modern health care is essential for human life makes it all the more crucial to allow the free market to work and to restrain the government from violating the rights of patients and health care providers. Any attempts by the government to guarantee health care as a “right” necessarily violates someone’s actual rights — either the providers or those forced to pay for others’ health care against their will or both. Hence, Americans must reject the flawed notion of health care as some sort of “right” and embrace the fact that it is a commodity.
And for those that are interested, here is an excerpt from the presidential debate last Thursday night on the topic of the right to healthcare, provided by CNN:
Brokaw: Quick discussion. Is health care in America a privilege, a right, or a responsibility?
Sen. McCain?
McCain: I think it’s a responsibility, in this respect, in that we should have available and affordable health care to every American citizen, to every family member. And with the plan that — that I have, that will do that.
But government mandates I — I’m always a little nervous about. But it is certainly my responsibility. It is certainly small-business people and others, and they understand that responsibility. American citizens understand that. Employers understand that.
But they certainly are a little nervous when Sen. Obama says, if you don’t get the health care policy that I think you should have, then you’re going to get fined. And, by the way, Sen. Obama has never mentioned how much that fine might be. Perhaps we might find that out tonight.
Obama: Well, why don’t — why don’t — let’s talk about this, Tom, because there was just a lot of stuff out there.
Brokaw: Privilege, right or responsibility. Let’s start with that.
Obama: Well, I think it should be a right for every American. In a country as wealthy as ours, for us to have people who are going bankrupt because they can’t pay their medical bills — for my mother to die of cancer at the age of 53 and have to spend the last months of her life in the hospital room arguing with insurance companies because they’re saying that this may be a pre-existing condition and they don’t have to pay her treatment, there’s something fundamentally wrong about that.
So let me — let me just talk about this fundamental difference. And, Tom, I know that we’re under time constraints, but Sen. McCain through a lot of stuff out there.
Number one, let me just repeat, if you’ve got a health care plan that you like, you can keep it. All I’m going to do is help you to lower the premiums on it. You’ll still have choice of doctor. There’s no mandate involved.
Small businesses are not going to have a mandate. What we’re going to give you is a 50 percent tax credit to help provide health care for those that you need.
Now, it’s true that I say that you are going to have to make sure that your child has health care, because children are relatively cheap to insure and we don’t want them going to the emergency room for treatable illnesses like asthma.
And when Sen. McCain says that he wants to provide children health care, what he doesn’t mention is he voted against the expansion of the Children’s Health Insurance Program that is responsible for making sure that so many children who didn’t have previously health insurance have it now.
Now, the final point I’ll make on this whole issue of government intrusion and mandates — it is absolutely true that I think it is important for government to crack down on insurance companies that are cheating their customers, that don’t give you the fine print, so you end up thinking that you’re paying for something and, when you finally get sick and you need it, you’re not getting it.
And the reason that it’s a problem to go shopping state by state, you know what insurance companies will do? They will find a state — maybe Arizona, maybe another state — where there are no requirements for you to get cancer screenings, where there are no requirements for you to have to get pre-existing conditions, and they will all set up shop there.
That’s how in banking it works. Everybody goes to Delaware, because they’ve got very — pretty loose laws when it comes to things like credit cards.
And in that situation, what happens is, is that the protections you have, the consumer protections that you need, you’re not going to have available to you.
That is a fundamental difference that I have with Sen. McCain. He believes in deregulation in every circumstance. That’s what we’ve been going through for the last eight years. It hasn’t worked, and we need fundamental change.
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