Evolution of Medical Practices

The good news is that we will not see a 29.5% reduction in Medicare fees. The bad news is that CMS continues to consider a 27.4% reduction in Medicare fees. In a time that we are facing an economic crisis there is no questions that any kind of reduction could results catastrophic for the healthcare professionals specially with all the new requirements that are been imposed. These opinions are actually shared by many such as Robert Doherty, senior vice president of governmental affairs and public policy for the American College of Physicians, told Medscape Medical News that “27.4% isn’t going to make doctors any happier than nearly 30%.” Glen Stream, MD, president of the American Academy of Family Physicians, said in a written statement that the 27.4% reduction “poses a serious threat to the financial viability of physician practices.” He cited a survey showing that even a 25% cut would put nearly 13% of family physicians at risk of shutting their doors. The American College of Physicians, American Academy of Family Physicians, and other medical societies have pressed the new Congressional Joint Select Committee on Deficit Reduction, known as the “super committee,” for short, to include a repeal of the SGR formula in its recommendations to Congress. One of the problems I see with this scenario is that not only do we have a Payor threatening us with lower reimbursement but the same Payor is implementing measures that will increase our overhead. For example, look at the HIPAA requirements introduced by the American Recovery and Reinvestment Act or even at some of the requirements of meaningful use and then add all of the new laws that have been signed and the “audit” initiatives and you will see that there is something wrong with this picture. If that is not enough, consider HIPAA 5010 and ICD 10 and think about the investment you will have to incur in order to remain in operations. This is not about being cash positive but survival. However, regardless of the cuts and the expenses not everything is lost. In a way I look at these changes as part of evolution. Are you and your Practice dinosaurs about ready to be extinct or are you nimble and ready to evolve? If you think that it is business as usual stop reading and have a nice day but if you have concerns consider the following measures: 1. Learn about the new rules, consult an expert and find the most efficient method to implement; a. Have you completed your latest security threat assessments, gap analysis, policy updates, training to your staff, compliance checks, etc. Keeping up with these requirements is manpower intensive and there are no Office Manager/Administrators that can keep up with the rules, much less implement and complete all of these additional tasks. Consider options and subcontract as needed. 2. Implement technology that makes you more efficient and reduces expenses; a. Maybe an electronic health record with all the latest gadgets is not the right thing to you. What about keeping your own servers and having to pay for all of their upgrades, updates and support. Open your mind, evaluate and move on. 3. Make sure your Practice is nimble and can adjust to changes fairly quickly; a. Do not allow the mentality of: we have always done it this way, why change? 4. Evaluate your costs and adjust your fee schedule accordingly; a. It is amazing how many of us offer services at a loss without even knowing it. Lately I have implemented more strict measures to evaluate every services and every proposal and although hard learned to walk away from losing propositions/efforts. 5. Identify your niche and take advantage of the same; a. There is no such a thing as competition. You may not believe this statement but not all Practices are the same. Your locations, services, staff, atmosphere and even you make a difference. Think about the following: Wal-mart, Target and K-mart are similar kinds of stores yet there are some people that prefer one more than another and while price may be a factor it is not necessarily the most important for everyone. 6. What services do you refer out the most? Would it make more sense to bring them in-house? a. Lately the word holistic is back in everyone’s vocabulary. Will a holistic Practice work for you? 7. Is a concierge/retainer Practice in your future? a. Will you be able to increase the production of your Practice to make the numbers match? If that is not the case maybe you should evaluate your priorities and start thinking cash based instead of third party Payor based. 8. Equipment and tests. While I did cover this indirectly in some of the measures above this topic does merit its own category. Is there a new piece of equipment that will benefit your patients and increase your bottomline? a. This particular subject is very important and it could potentially be your saving grace as long as you do your homework. Don’t believe everything you hear but keep your eyes and ears open as there are many opportunities that could make a difference in your particular situation. 9. CASH IS KING. Have you secured cash whether in saving, line of credit or any other measure? The upcoming changes are going to affect your cash flow and you should have some funds in hand ready for a contingency. I actually have gone through each of the above measures and implemented actions regarding all of them. Some of them are directed to help my clients meet compliance, increase revenue and reduce overhead. Others are simply directed at assisting with operations which at the end of the day becomes cost of doing business. The point is that I’m evolving and plan to stay around in the future; are you?