PookieMD's Blog: Where Physicians Learn About the Business of Medicine

I was getting a massage yesterday, and it struck me how simple the payment system was.  I paid for a twenty minute chair massage, told the therapist “my shoulders really hurt,” and away we went.  He worked the knots out, and I gratefully sat there in quiet bliss, face smashed against a paper towel on the massage chair.  At the end I said thanks, and gave him a tip.  I didn’t stop as I stood up and say, “But you know, I really hurt in my low back. Can you work on that too?”

Instead, I put my money in the tip jar, and listened as he told me to drink lots of water.  What if doctors were paid that way? What if the patient paid for a certain amount of time, and when it was over, it was over?  If the patient wanted more time, she would have to pay for it.  For instance, if I had wanted him to work more on my shoulders, I would have forked over the cash. Also, I made sure I was ready to start and didn’t waste time chit chatting.  Imagine: the therapist asks: “Are there areas you want to focus on?” and I answer, “well, yesterday, I was playing in my tennis league, and was serving really hard, and then didn’t stretch afterwards, but instead went right to the beverage table, and had snacks–and they were really good, they had those wraps with the turkey and swiss, and ranch, and I really love them. And then I had a glass of wine, red, I think, and then some of those brownies…And so my shoulder hurt, because it started to rain, and I didn’t have my jacket and the car was too far away to make it work my effort and then–.” You get the point.

And if I had chattered on, he would have taken it out of my chair time.

What do you think? A new billing system in the works?

Surfing the net aimlessly, I came across the following from Care Practice:

“We offer 24/7 Urgent Care and House Call services with an On Call Doctor available after hours and on weekends to meet patients that require Urgent Care services. Our office is open and staffed 365 days a year because patients don’t determine when they get sick.

The new year brings the January slowdown, in which patients don’t come to the office for appointments because of many reasons–most of them financial.  Lots of patients have huge deductibles, and will have to pay for every bit of their health care until it is met.  Other patients are tapped out from the holiday season, and are now looking at big debt.  So how do you encourage patients to come in and get the health care they need?

For new patients, make a big deal of the first appointment.  Send out a packet ahead of time, with your bio, as well as information about your staff, office info (where to park, hours, services), and forms to be filled out.  Include  payment policies. Also include a health “tip sheet”–e.g. reminders that exercise, prudent diet, proper medical care and non-smoking offer big health dividends.  (Yes, dear readers, of course you should already have all of this on your website!)  Include your card in the packet.

For established patients, send a reminder post card, and emphasize the necessity of continued medical management for continued health.  Make the postcards up beat, and again offer a health tip.  You don’t need to do postcards every month, but January is an especially good month to get everyone started on their new year’s resolutions!  Postcards should include contact information so patients can easily make appointments!  You should always have staff call and remind patients of their appointments 24-48 hours ahead of time.  There are automated ways to do this as well.

Consider offering something free–a noon seminar on healthy eating, or ways to include exercise in a daily routine.  One of the most fulfilling seminars I did was a diabetic teaching seminar, complete with lunch and samples.  I paired up with a nutritionist, and a drug rep bought a light lunch for the group.  It brought huge kudos and loyal patients in to the office.

Make the experience enjoyable.  Your receptionist should greet patients cheerfully, your office should be neat with up to date magazines, and for pity’s sake don’t keep patients waiting!  Have the patient make their next follow up appointment before they leave the office.

Develop a quarterly newsletter.  This is a chance to send out information on medications, immunizations, new staff, and encouraging news.  Newsletters are a way of attracting the type of patients you want to see in your office–and beginning to build a practice that you love.

Make it happen!

For those of you who insist that medicine is not about making a living, is not a business, and has nothing to do with money, please stop reading.  Immediately go and volunteer at a free clinic, go in to your lab and develop  a vaccine against tobacco addiction, and a pill to cure obesity.  For the rest of you, who realize that you can’t keep the doors open to see patients unless revenues equal expenses, read on.

Medicine, like it or not, is a business.  If you don’t like that fact, you should consider moving to Japan, where physicians are accorded great respect, and little money.  If you decide to stay here in the U.S., here are a couple of ways to look at your medical practice, ahem, business.

In general, there are  two mind sets in setting up and running a medical practice.  There are practices that focus on making money, and practices that are focused on saving money, I don’t care which model your practice falls in to, as long as your realize which is which, and are content with that choice.

Money making practices are focused on…making money.  (Orthopedic practices come to mind.) Key characteristics:

• Seeking profitable sales and loyal patients (customers).
• Developing and training employees.  (This is where orthopedic offices, in general, have it dialed.  The orthopods, do what they do best–surgery.  Their assistants, PAs, secretaries do the rest.  My orthopod has a secretary type his notes as he sees the patients.)
• Spending money where it gets the greatest returns.  Yup, orthopods have EMRS, comprehensive websites, and lots of assistants–all of which are designed to increase efficiency and through put.
• investing in the future of their practice.  Orthopods, and their savvy office managers got the EMRs and websites because they need to constantly feed the pipeline of patients.  Most patients are there for a single episode, so orthopods need to keep the pipeline of patients full–hence investing in the future of the practice.

Money saving practices are focused on….saving money.  (Primary care practices come to mind.)  Key characteristics:

• Getting the work done for the lowest or cheapest price.  (Yes, I know ALL about how little primary care is reimbursed, especially compared to our example above, the orthopod.)
• Maximizing employee and office efficiency.
• Constantly reducing costs through out the business, and looking for ways to save money.
• Providing acceptable service, but not a usually stellar knock your socks off service.  (There isn’t time, energy or money to provide consistently amazing customer service in this model.)

Okay, don’t get all upset with me.  I didn’t make the rules on reimbursement.  I would encourage you to look seriously at how your practice runs and make sure you are comfortable with that choice.  And, just so there are no misunderstandings, if  you find yourself in a practice that is too focused on maximizing revenues, and not enough about time with patients, or if you are struggling to make ends meet, then it’s time for a change either way.   The New Year is coming around, and this may be just the time to reprioritize and grow.  Just make sure YOU chose the direction!

See bookstore page for Get Your Business to Work, by George Hedley.

According to MGMA, physicians’ number one concern right now is falling revenues.  Especially concerning is collecting copays. Copays are tricky–this is the part of the revenue that the physician is directly responsible for collecting.  Making it even more challenging is the fact that physicians didn’t go in to medicine to become business people, but rather to help and heal people. Some physicians find it abhorrent to even think about the business of medicine.

If you are one of those, I suggest you think about an important concept: you can’t practice medicine if you can’t keep the doors of the practice open.

If on the other hand, your practice is so well run that patients run in carrying cash for the copays and insist on leaving a tip at the front desk, read no further.

Here’s the deal: you must get paid for the work you do, you must meet the financial obligations of the practice, and you must take home some sort of paycheck to keep bread on the table, a roof over your head and clothes on your body.  Your dependents would probably appreciate this as well.  Health insurance and retirement funds are optional.

So what to do:

1. Set the expectation from the get go that a copay is  expected at the time of the visit.  Have a sign to this effect, and train your staff as to the importance of collecting the copay from the beginning.
2. The front desk should check the insurance card for the amount of the copay every time.  (I was at my ob/gyn office, and they tried to convince me to pay the “specialist” copay of $50.  Since when is a gyn visit for a pap smear a “specialist” visit?!)
3. The front desk person should ask, “how will you be paying the copay today?”  (Notice: not “will you be paying the copay today?”)
4. Take credit cards if your office can afford it.  Credit card companies take a 2.5 -3% of each transaction.  When your margins are really tight, this can be significant!
5. Ask for partial payment.   Getting even some of the copay and billing the rest is better than getting none at all.
6. Be diligent in following up on missed copays with billing.  Again, have the option of putting it on a credit card when you send out the bill.
7. Make sure you have a system for logging copays. 
8. Keep the goal in mind: doors open=practice medicine. 

Good luck out there!

Annals of Internal Medicine had a great article on so called retail clinics.  The article looked at three acute diseases that make up 48% of the retail clinics’ business, and compared the cost of treating these three illnesses to costs at a physician office, urgent care center and Emergency Department.  The authors also looked at quality scores at the retail clinics in comparison to physician offices, urgent care centers and EDs.  The three acute illnesses studied were pharyngitis, otitis media, and urinary tract infection.

And the winner was…retail clinics!  “Retail clinics seem to provide reasonable quality of care for 3 common acute illnesses, at a competitive price.”  Retail clinics cost significantly less, coming in at $110/visit.  This compares to physician offices at $166, urgent care centers at $156 and the highly priced ED at $570.  And guess who used these clinics?  Those that were young and had health insurance!

Why was the retail less? Primarily because the care was provided by nurse practitioners. 

What does this mean to you; oh savvy physician/business owner?  Open a “quickcare” clinic in your practice! Hire a nurse practitioner and have him see patients for UTIs, sore throats and ear aches.  (Immunizations are a big item for retail clinics as well.)  Have open access to the practitioner, and make appointments short–these are by nature very uncomplicated illnesses. Make sure you limit the NPs visits to these illnesses, however, in order to make this model work.

Market the fact that you have a “quickcare” clinic in your own office, and get the word out.  Your patients will appreciate the familiar surroundings, the quick service and appropriate level care.  Your benefit:  you can supply good, cost effective care, keep your patients happy, and increase revenues, rather than have those revenues go to the local Wal-Mart MinuteClinic.

This is a classic win-win situation for all! What’s not to like?

There is a blog similar to this one, called Making It, written by Douglas Iliff, MD, a family practitioner. He blogs on the American Family Physician website. Here is what he says about patients and non-payment of debt:

“I have only tossed a couple of patients out of my practice face-to-face. One of them was a pretty good friend who kept verbally abusing my staff. I’ve never done it for non-payment of debt. But lots have been booted out by a process that I consider both just and merciful…The key is that I make it clear that no one will ever be dumped for inability to pay. If they ask for their debt to be forgiven, it will probably be forgiven. If they want to pay $5 per month, that will be fine. Here’s the key paragraph from the letter patients get before they are turned over to collections:

“I’ve tried to be human about debts. Anybody who tries to make arrangements to pay, and then follows through without our badgering, will make us happy. I don’t care if your monthly payment will never retire the debt. Just don’t make us keep sending you bills. That’s all we ask.” ”

I have one issue with Dr. Iliff’s post: how do you keep the doors open if your revenues are not greater than expenses, no matter how noble your intentions are? Remember PookieMD’s number one rule of practice: you can’t see patients if you can’t keep the doors open.
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As promised, I would set up a goal for the year, and plan to achieve it.  I had earlier noted that business for my company, ExtraMD was down for the first time in five years.  My company supplies physicians to clinics/hospitals/urgent care in the city where I live.  I am the physician owner, and feel responsible to the other 5 physicians in our group.  So, I developed a marketing plan for the next six months to bolster our shifts.  The general marketing theme was a birthday celebration, as ExtraMD is turning five.   

The goal: have 5o shifts per month for our physicians.   (This is what we usually have, but has suddenly decreased.)

Unless noted, all responsibilities for marketing are mine.

The plan (by month):

January: send an email to our clients, announcing our birthday celebration, and giving a discount of 10% off the first shift.  (Already done by our trusty office manager.)  Send out a press release announcing the birthday celebration.  (My responsibility.)

February: deliver birthday cupcakes to potential clinics with cards/brochures. 

March: build a referral tree via email.  E.g.: if a client refers someone to us that uses us to fill shifts, the referring client will get a discount off their next shift with ExtraMD.

April:  send out postcards reminding clients/potential clients of our services, focusing on how we benefit the practice when one of our doctors fills in.

May: send out email reminder for practices to book now for summer vacations.

June:  send out a newsletter with tips on practice management to our email subscribers.

Most of the marketing will be low cost.  This marketing plan was developed with help from Philippa Kennealy, a physician entrepreneur.  I also consulted Duct Tape Marketing, by John Jantsch.   I’ll keep you informed as to our progress.

In the contest to describe a goal and a plan to meet that goal for a medical practice, Dr. Bobb is the winner (and the ONLY contestant!)!  Now, I don’t know exactly how well his plan will work, but I’m loving the idea of the vacuum.   He notes that they will take turns cleaning the bathroom.  Hmmm, we’ll see how that works out!  Visit his blog for more fun!

Here is his plan for his practice:

The Goal:
Cut nearly $5000 a year from the practice’s operating expenses.

The Method:
Terminate the practice’s contract with its janitorial service.

The Timeline:
As soon as current janitorial service contract is up, sooner if it is an “at will” contract.

The Plan:
Purchase an iRobot Roomba to vacuum the office building’s carpeted surfaces and a Scooba to clean the tiled floor areas. Cost: about $370.
Office staff will take turns cleaning the office’s bathrooms.

The Personnel:
Office Manager will purchase the cleaning robots. All office staff (including the doctor) will take part in keeping the office clean.

Dr. Bobb is the recipient of  a $15.00 Amazon gift card from PookieMD.  Don’t spend it all at once, and keep us posted, Dr. Bobb!

So, continuing on with my tale of my little business…I left off describing how ExtraMD ( my local locums company) was going to weather these stormy economic times.  I have noticed a drastic drop in shift requests.  Over the past two years, we have typically had 10 shifts per month unfilled, almost enough for a full time physician.  However, over the last 3 months, I have seen a distinct drop, such that by December we only had 2 shifts that went unfilled.

Scary.

Next, an urgent care cancelled a shift, saying they were so far behind in their receivables, they couldn’t afford any more debt.  We haven’t yet received the money owed for work we did there.

Scarier.

In addition, a large clinic system cancelled over 16 shifts for one month, leaving 4 doctors with out work for February.  They emailed me, saying, “Good news for our clinic…we’ve hired a full time physician, so won’t need coverage.”  Bad news for us.  We do have a 30 day cancellation policy, but the clinic squeaked in at 31 days, so didn’t have to pay the full cancellation fee.

Scariest.

So, what will we do?   How will I find work for my  docs, keep my company afloat and sleep at night?

Here’s my plan:

1. Calm down.
2. Send out a post card mailing, advertising a birthday discount.  (ExtraMD is turning 5.)  Something cute and eye catching will be on the postcard,  like a birthday cake.
3. Email our clients, letting them know we have a birthday  celebration discount going on.
4. Consider taking  birthday cupcakes to our best customers.
5. Put an ad in the local medical journals.
6. Talk to the other physicians in our group about leaving business cards and chatting up the business at practices where they are working.  As the physician owner, I have done all the marketing myself, but hey, it’s worth a try.
7. Create a press release targeting the local market about ExtraMD’s birthday celebration and discount.  Let practices know that we are a  good interim solution during tough times–it’s cheaper to use us than hire another physician, especially if  a practice isn’t certain it can support another full time physician.

I’ll keep you posted as to the results.  How is YOUR practice doing in these tough times?