Navigating the Increasingly Turbulent Waters of Healthcare Practice
Even though it may be hard to believe at times, you can survive and even thrive in independent private practice. But it’s SO much more difficult than it used to be and only the smartest and most proactive business owners can hope to do well in the future.
If you are in medical practice, the deck is really stacked against you for many reasons, few (if any) that you can control. But some are overcoming these challenges and you can learn from their best practices.
Doctors in successful independent medical practice in the U.S. represent an increasingly smaller slice of the pie in the world of healthcare delivery. A 2014 survey of 20,000 U.S. physicians found that only 35% described themselves as independent. And that percentage has surely dropped further in 2015.
If a practice accepts Medicare (as most medical specialists still do), they are at the mercy of increasing regulation and declining reimbursements. This challenge is not limited to Medicare recipients because commercial insurers follow the lead of the CMS in setting their own rates.
Add in the dramatic increase in the number of employers who have forced a shift in the cost of healthcare to employees (assuming they offer health insurance at all) and mix in the employers that structure employee hours to avoid health insurance liability and you have a true “perfect storm” for many medical practices.
Three medical practice models
As we move into the second half of the second decade of the 21st Century, three models of medical practice retain some level of viability.
1) Hospital/health system-owned (The Affordable Care Act stacks the deck in their favor)
2) Cash-pay model (out of network and not accepting Medicare)
3) Hybrid payment model (some insurance-based and some cash services)
Hospital-owned practices. If you are employed by a hospital or health system, you obviously don’t have to be concerned with the challenges of private medical practice ownership and profitability. You have lots of other issues and challenges but ownership is not one of them.
Cash-pay practices. If you are in a cash-pay model, you will survive and thrive only to the extent that you can convince enough people to pay cash for your medical services. Success in this category requires constant, smart and effective marketing and sales systems. It also requires a play-to-win mindset from ownership. Playing “not to lose” is a self-fulfilling path to losing.
Hybrid payment model. If you are in a hybrid model, you find yourself straddling with one foot in and the other foot out of the insurance-based healthcare model. Maintaining your balance (operationally and financially) is complicated and far from easy.
If you play in the hybrid category, the sophistication of your new patient marketing, sales skills, patient retention efforts, patient satisfaction and personnel will be critical success factors. This is true whether you have a concierge medicine practice that also bills insurance or an insurance-based medical practice that also offers cash-based programs like aesthetics, nutritional services, supplements, other products and some medical weight loss programs.
Charting a Path for Future Success
Feel free to give me a call at (800) 924-5447 to discuss your goals and challenges. I’m available and happy to help.