Medical practice in the slow economy is – to put it bluntly – tough. Requiring difficult decisions by physician owners with regard to ways to cut expenses, outsource billing operations, maximize reimbursement, and still provide quality patient care, the economic recession has wreaked havoc on many private practices to date.
And there is more to come.
I blogged about the closure of a small medical practice in my hometown of King City, CA back in September, and the harsh realities of an industry that must strike a balance between clinical expertise and business acumen in order for good, quality care to occur. The deepening recession we are facing is but a stark reminder of the importance of this, and it is imperative that practice owners realize that their attention to the business elements of their practice is critically important to the care of their patients.
I found the following article in yesterday’s Los Angeles Times which speaks to the cloud of insolvency that continues to loom over one area of medical specialty in particular – the primary care practice. I encourage you to take a look at the article as it captures many of the obstacles faced by primary care physicians in today’s economy: slowing payments for services, poor reimbursement, high overhead, patient cancellations because of inability to afford services, and the use of ancillary, cash-based services to supplement revenues.
[Walford] hadn’t drawn a paycheck for herself since February. On top of that, her practice has cost her $40,000 in personal savings and left her with $15,000 in credit card debt. Walford, 39, also owes $80,000 in medical school loans. She shops at Ross and other discount retailers, and rarely eats out or takes time off.
Small general practices afford doctors autonomy to practice medicine as they see fit and can produce strong doctor-patient bonds. But these physicians have little or no clout to leverage better payments with insurers; they have no economy of scale, which makes overhead more burdensome.
“As people are tightening their belts, they are deferring things they think are a luxury or not absolutely necessary,” said Long Beach physician Jeffrey Luther, president of the California Assn. of Family Physicians. “We see people putting off physicals and mammograms and blood tests because they just don’t have the cash.”
Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy. Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.
Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast. Tannus can be reached through the Vantage Clinical Solutions website by clicking here.