Healthcare Reform by Dr. Jose Delgado

The reality of the present healthcare environment is one of change and opportunities. While I consider life a rollercoaster, healthcare business is the ultimate ride. For example, a big player in the near future are the elections. Doesn’t matter who wins there are big decisions to make as it relates to the future and the only certainty is that things will never be the same. Consider for example the Affordable Care Act (ACA) with its initiatives regarding preventive medicine. These initiatives are a great boost to many Practices, yet they also have its pitfalls to consider. For example, let’s talk about like colonoscopies. These services will now be covered under ACA and no-copay is required. However, if during the procedure there are any findings and a diagnosis is written then the procedure is no longer preventive and the old rules apply. This means that patients may now be financially responsible for the services. This particular detail will put Providers in a pinch as now patients will be aggravated, to put it politely, as they see their bill. Let’s look at it from another angle as some of my peers have pointed out to me. ACA should offer a temporary financial reward as it relates to office visits. The reward as I stated is a 10% for office visits (other preventive services may also be covered in this reward system) from the present till 2015. But Medicare is running out of money and decisive actions must be taken. So the question is; how much longer will this incentive last? Forget the incentive and consider something more drastic; will the Government be able to afford Medicare at the present rates? Chances are that if any knowledgeable committee looks at this problem they will realize that revamping the system is a necessity and that the operating budget must be reduced. Which in my book means that as a business owner I need to plan ahead for the worst possible scenario while taking advantage of “seasonal trends”. Point to consider, ACA is supposed to add millions of patients to the rosters of the insured patients. The way I envisioned it is that this program will run similar to the Medicaid program with the subject of fees remaining an uncertainty at the moment I’m writing this article. Consider the following: what is the point of making 1 million dollars if it costs you two million to earn it? Or in other words, it is not how much you make but how much you keep. When I started businesses my “call to fame” was conducting cost analysis. The cost analysis gave me a way to assess how much it cost to see one patient. Based on that we would develop our fee schedule and hence a strong business. Now may healthcare professionals used Medicare fees as their based without regard to their own costs. THIS IS A MISTAKE. Mass production and quality do not normally run together. So if you want access to these millions of patients it is important that you understand your costs and compare those to the fees that you will be paid. Again this is an opportunity but tackling it with “this is the way we have always done business” is not advisable. In terms of Patient Centered Homes and Accountable Care Organizations the decision is still to be made but based on our own forecasting we believe that many of these models are not going to work out. While the idea of a holistic type of service is commendable the reality of these organizations is that they need a strong business a logistical support base in order to produce the required savings needed to survive and grow. Even if a base exists there is a significant investment required to create the necessary structure and protocols. Most ACOs have not had the chance to obtain the necessary support before been launched which will result in many of these not surviving. Yet they do represent a threat to the healthcare professionals as they will compete for patients and resources for however long as they are in existence. Meaningful use is another issue that may result in a very well needed cash infusion but at the cost of increases in your overhead and potential liabilities. To this date I have not seen any Healthcare Professional that meets all the requirements of Meaningful Use Stage 1. Again, I’m not privy of all the details and programs running with everyone I meet but those that I know closely have not and will have a hard time becoming compliant with all of the rules. If nothing else because they are not aware of all of them and what they need to do to meet them. Yet, a few have received the incentive stimulus or are in the process of receiving the same. At the same time, the Federal Government already awarded a contract to a company that is going to audit those that received incentive money which previously completed their attestation saying they comply with the rules. Meaningful use stage 2 is also around the corner which depending on the point of view may be good or bad. Regardless I go back to the previous paragraphs, it is not business as usual and while there are opportunities you need to learn the rules if you want to play. ICD 10 is also scheduled to start exerting its influence by 2014. Regardless of the complexity and changes needed my focus is on the cash flow. Once ICD10 is introduced there will be new check and balances in the term of software which will audit every claim and check to see if the same meets all requirements before the same is paid. At one conference I attended the number of 90% rejection of claims was mentioned as if the same was a matter of fact. Of course it is also expected that each Payor will have their own software and challenges as they implement ICD 10 so potentially if one thing works for one company it may not work for another. But let’s just consider this, assuming you patient volume doesn’t change; can you afford to operate with only 10% of your present Medicare reimbursement? There are more hot topics to considered in this new age of electronic records and rules but at the very least I will also provide some simple recommendations: 1. Get a line of credit. In the past this used to be easy but as the rules have changed banks are a little more reluctant to provide access so the sooner you start with this process the better. Also while I recommend enough assets to operate for six months you should have at assets to cover at least three months of operations. 2. Diversify your Practice. Just like gambling, do not bet more than you can lose. In the case of healthcare operations, if Medicare is 60% of you income then you are owned by Medicare. So the question is how to diversify and what will be the best initiatives to follow. 3. Hire Non-physician providers. These professionals may be able to increase patient volume without the costs of a fully licensed physician. 4. Increase office hours. Convenience for the working patient is critical. Regardless of career track there are always certain hours that are slower than others. Hence been able to be seen at the convenience of your patients may result in a change of your demographics. 5. I will personally recommend to stay away from the Medicaid market. Yet I also recognize that there are ways to make this market lucrative without breaking the rules. So if you are going to take Medicaid patients make sure that this is a match that you can make it work without sacrificing more lucrative revenue or without losing money in the process. 6. Take the third party payor out of the picture. Patients should be seen as customers. Customers need services. Reinvent your Practice and look into concierge or what is mentioned as primary direct care. 7. Consider technology. Electronic records are essential but do not limit yourself to electronic medical records are there is much more needed to run your Practice. Also look at new technologies as the same may reduce your overhead and allow you to provide additional services. 8. Money is the blood of your Practice. Look at the flow as you will look at a patient with circulatory problems. Know every part of it, check your collection process and improve the same, consider subcontracting opportunities. 9. Marketing. This by itself is a whole ne
w subject as marketing in the new era has and continues to change. Videos and social network are critical to reach the new audience. In the past business cards were essential for marketing, now web sites, social media presence and the right mix of print and electronic presence with ongoing changes to create flow are becoming key aspects of any marketing campaign. I understand that no one can do it all and that I may have overwhelmed you with information. The sad part is that this is but the tip of the iceberg. Hence, digest the information and consider contacting us at Taino Consultants or someone knowledgeable you trust to ask more questions and assist you with your decisions.