Physicians Now Make-up Over 40% of Mid-career Business School Enrollment
Revenue Cycle Management, Incentive Compensation, and Workflow Analysis. These are words that are rarely, if ever heard in medical school but are critical to a physician’s ability to operate their office. Pay for Performance, Profiling, and Payment Methodologies. Other words that physicians are faced with every day but not taught in medical school or residency programs. In our 21st century, you need to be not only a physician but also a businessperson to succeed in today’s healthcare environment. While many physicians play golf on their day off, significant number these days are reviewing accounts receivable. Having an interest in business make it easy to navigate the changes in medicine that are ever-changing, but just as importantly, it is necessary if you hope to operate a successful practice.
Traditional IPAs, PHOs, and Networks have now been replaced by ACOs, Medicare Advantage Plans, EBM (Evidence Based Medicine), and P4P (Pay for performance). There is much more to the practice of medicine than the knowledge learned in medical school and residency. How does a doctor bridge the gap? Every doctor has the capacity to learn how to manage their business and those that do will financially do better than those who do not. What ancillary services can you provide that will enhance your practice revenue? What are my competitors (yes they are in competition with you for market share) doing that I am not. Why do other physicians in my specialty seem to be making more than me? These are the questions that need to be asked on a quarterly basis so that you are not left behind. Although time is a limiting factor, giving up a day off every now and then to make sure your practice is working well is a fair trade. Your office manager, practice management consultants, accountants, attorneys, and others can make recommendations, but in the end the physician has to take ownership for implementation. If this is not the way you want to practice, the alternative is to become an employee of a hospital, large medical group, or other organization and only have to worry about seeing patients.
In adversity, there is always opportunity. This sentence allowed many entrepreneurial physicians to create successful medical management companies and is going to allow a new generation of entrepreneurs to flourish as health care reform takes hold. As a physician, I have traveled between the business world and the medical world seamlessly. When a physician talks to lay people in business about health care they listen. It is critical for the physician to leverage that in their discussions with managed care organizations, hospitals, etc.
The economics of healthcare has always been that the total expense for any service is equal to the sum of the price for the service multiplied by the quantity of services. In a fee for service world, this is borne out in Florida because as the unit price for a service was reduced the number of services increased. Hence, Florida’s utilization is one of the highest in the country. In a capitated world where the total expense for services is fixed, the quantity of services is reduced leading to a higher price per service but in some instances, underutilization.
It is critical for all physicians to understand that with their signature, they control almost 100% of all health care expenditures while at the same time they only receive 18% of all funds spent. With the advent of ACA, the world as we know it has changed. What is quality care and how do you get there? Is cost effective care the equivalent of quality care? How do I compare to like physicians with similar patients as it relates to utilization of resources and outcomes? For individual physicians or groups to be successful, they will have to prove that they can deliver a better product than their competitor. This is the next phase in the evolution of medicine. The bridge between practicing medicine and running a business is getting shorter. How we take advantage of the opportunity will determine our viability in the future.
What's the health of your medical practice? #weshouldtalk