Q: I have a small medical practice and am finding it harder to make money. How can my practice survive in the face of rising costs, healthcare reform and growing patient needs?
A: According to Harvard Business Review’s “12 Megatrends in Global Health Care,” it may require a paradigm shift. There are more opportunities than ever in entrepreneurial healthcare. Small practices have the advantage of being flexible in the face of change. First, evaluate the roles of staff and operations. Since one of the trends is the focus on prevention, can you leverage your non-MD staff to offer preventive services and education? At the same time, shift some of the burden to your patients. A patient-centered approach holds patients accountable and empowers them to follow through. More health insurance companies will have to provide no or low cost preventive care to comply with the Affordable Care Act, which may create greater demand.
Q: Billing insurance companies and getting adequately compensated is a sore point with me. What can I do to make the best of it?
A: The first thing to do is hire right. Because of the complexities of billing multiple insurers, a good medical biller is one of your most valuable resources. In addition, you need access to billing software that is suitable for your practice. By 2015, hospitals and doctors are required to use Electronic Health Records (EHR) for processing Medicare payments. While EHR requires an upfront investment in software and training, they will also provide more opportunities to provide holistic healthcare, engage patients and receive faster payment. If you work with insurance companies, pay close attention to their business practices. Talk to colleagues and staff with experience to identify companies who are efficient and meet their financial obligations. Analyze their payment patterns so you can predict cash flow. Many medical practices need a line of credit to keep payables and payroll paid on time.
Q: What if I decide not to take insurance?
A: While you can eliminate the cost of managing insurance payments, it means you may also eliminate those patients who have insurance and want to use it. If you want to use a cash model of payment, you might consider setting up a retainer or concierge medical practice. This means engaging with fewer patients, but on a subscription basis. The attraction to many doctors is the opportunity to coordinate and manage care without the pressure of billing for specific diagnosis and procedures only. While patients are fewer, the predictability of a monthly or annual payment means stable cash flow and less operations cost. You can also decide to create a hybrid practice that embraces both methods of payment. As healthcare evolves and consumers become more proactive in their care, it is certainly a viable option.
Janet Harte is the Washington State University/SBDC certified business advisor and center director for Clark and Skamania Counties. She can be reached at firstname.lastname@example.org.