It has often been said here that physicians who are poor at business won’t survive. Here’s one story where a financially astute physician turned her practice around. They need to teach more of this stuff in residency.
Related posts:
- More on the business of medicine
- Business and medicine
- Practice medicine like a business
- The business of medicine
- Medicine is a business . . .
- Why physician practices are poor business models
- The consequences of making medicine a business
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We are actually considering creating a business curriculum to start offering, at no cost, to residency programs across the country. One or two lunch sessions, with plenty of printed materials just to teach the basics of economics and hopefully provide some business acumen.
A couple of things I am not sure you guys know about.
One of the items she mentioned was cutting loose some insurers. Depending on where your patients work, their company might offer them a choice. The time to make the change of insurers is usually late October through December. So, if you tell your patients that you plan not to accept some plans by October, these patients are likely to switch to another plan. Given big enough company – in some places there often are only a couple of major employees- you may actually affect the insurance company.
Happened in our area. A medical group had problem with an HMO’s senior plan paying some bills for a ridiculous reason. This medical group send a note to everyone who used this HMO, not justs seniors. A fairly big percentage of people who used this HMO were employees of one huge fortune 500 company. Before next health plan selection period, the HMO settled.
We make it a habit during selection periods to call all of our doctors’ offices asking which plans they take. Sometimes, we try to ask which one they prefer, but I guess you cannot tell us that.
Oh and about billing. I am still to see the bill and explanation of benefits statement for my bone density scan in early January. The insurance company usually sends explanation of benefits 4 weeks after the test. This is actually part of my deductible and I’d be happy to pay, but I need the bill. Something doesn’t seem very efficient here.
I’m in the midst of starting my own retainer practice that takes insurance patients as well. My doors have yet to open but their is an unbeliveable amount of complexity starting a practice. It’s not that I cannot do it. But it’s that residency never trained me on the practical aspects of credentialing, paperwork, record keeping, a/r and a/p management, selecting insurers, watching out for “the traps.”
Fortuantely I’m working with a consultant but it is no longer jsut a hang a shingle kind of world.
Oh, an independent urologist’s advice helps a lot as well. Hopefully I can add to startup knowledge with my blog posts.
I’m not sure a residency program’s advice would be worthwhile. Many faculty have situations in which the economics of the practice are very different from being out in practice.
Every practice needs a good office manager, even if it’s less than full time, and this has to be someone who can manage at the scale of the practice. Beyond that, the physician(s) MUST be involved in the business financials to understand what’s going on, where money’s coming in from, where it’s going out to.
Greg, even if the residency program’s advice was exactly what you said, it would be better than nothing!
Her story illustrates a common problem depressing the income of primary care physicians. That is simply not being at peace with the idea that when you provide a service of value, the recipient is obigated to pay for it. The attitude of wanting to be the all giving maternal breast feeding peoples sense of entitlement to free healthcare is seen with other physicians as well, but is most common in primary care. If you don’t think your labor is worthy of your hire, or if you feel patients are entitled to not have to pay for medical care, then don’t go into private practice. Join the military, work for the VA, or otherwise work in a socialist system.
Regarding residency preparation for private practice,. when I finished my residency, one of drug companies sponsored a full day seminar on establishing and running a private practice. Medical Economics also had some excellent publications, as did a press associated with my specialty society. Another great source of information was those little preceptorships with non-academic “clinical faculty” private practitioners that the regular faculty pooh-poohed so much. Those guys taught me some pearls. One even sat me down and showed me how to make a spreadsheet to manage my cashflow the first six months in practice.
Some of the glaring mistakes that newbies make are not just about account and cash flow management. Some of the time-worn rules of private practice seem to have completely escaped some folks:
Trade with the people who trade with you. Your first business relationships are with your suppliers in establishing your practice so spend that money locally where you make relationships and some of the money might come back to you.
Always thank people for referrals and send a report back.
Always send the patient back to the referring doc.
Never criticise your colleage’s care. Most of the time when you feel like doing so, you are wrong anyway because you don’t have all the facts.
Don’t apologize for charging and collecting what your labor is worth.
Get consults and second opinions sooner rather than later. Patients are no longer “hits” to your or your colleages and they will be glad to help.
Be humble with your older colleages and ask advice. Most will be glad to help.
Be available, affable, and affordable (but not free).
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