The way healthcare is situated today, doctors spend a lot of money to get their degrees but end up not making enough. Many doctors are leaving their practices because they can’t afford to sustain an income. But, innovative people are offering a new business model that can change this dynamic and allow doctors to make more money while spending less. Primary care physicians have to ensure they have the necessary volume of patients to cover their costs.
Doctors have many restrictions on their earnings. For example, insurance companies will pay for only so much. Many patients are being provided reduced or free healthcare, courtesy of the state or federal government. They have to hire employees who understand nursing, medical terminology, and billing. These employees don’t come cheap. Often, primary care physicians see their patients once a year. Equipment is expensive to buy and maintain. Overhead costs can be high. Because of these financial restraints, many doctors are leaving their practice because they can’t afford to sustain an income.
But, innovative people are offering a new business model that can change this dynamic and allow doctors to make more money while spending less. The business model involves grouping services in an area to spread out the costs of equipment, human resources, billing, and overhead.
What are the problems?
- Being a primary care physician is stressful. Doctors have to ensure they treat the right number of patients to generate an income. They also have to oversee the clinical staff and business operations. They are required to stay current on changing regulations. They have to deal with clinical challenges and human resource issues. Doctors also have to pay attention to insurance companies and their requirements, which are often listed in small print.
- A significant number of patients fall under state or federal programs. These federal and state programs are complex and confusing. Figuring out payment structures is daunting, and doctors face severe consequences if mistakes happen.
- Insurance company rules are problematic. A patient must have insurance approval prior to treatment. Co-pays must be verified and collected. Forms and patient charting must be filled out accurately and have to match exactly with the selected diagnosis codes.
- Keeping records is a headache. Records must be entered into the Electronic Medical Record precisely and without errors. Many other items in the Revenue Cycle process have to be done correctly and timely. If anything is not done exactly as required or in a timely manner, the physician will not get compensated. The days of sending a bill and getting paid are long gone.
- Missing financial reports cause problems. To run a practice efficiently, physicians need the proper financial reports and tools. These include monthly income statements, balance sheets, A/R reports, monthly benchmarking reports, efficiency reports, and staffing reports. Practices are suffering because the reports aren’t being used or generated regularly.
- Doctors work too hard to sustain income. Physicians believe they have to work harder to maintain their incomes, but they really need to be more efficient in how they work.
What are the solutions?
- Coming together in groups. With groups, standards of care are developed; they share resources for IT; they share a business office; they share accounting; they share insurance contract negotiations; benchmarking data is used; and human resources and payroll issues are shared.
- Add other services under one roof. Doctors get a large financial advantage when they include urgent care, imaging facilities, laboratories, X-ray units, and pharmacies in their practice. These services add profits because they cost less than having them done at hospitals.
- Adding services makes the practice more efficiently run. If you could put 10 primary care doctors in one center, instead of two each in five offices, you would have a very efficient, state-of-the-art, patient-centered operation.
- Outsource services. Practices become more efficient when they outsource accounting, human resources, and billing. You also can turn to Doctors CPR to find the right employees to make your business more efficiently run.
Doctors can adopt this new business model. It will help them reduce expenses, which will, in turn, let them keep more of what they earn. Partnering with others in related fields has helped many other industries. They have adapted to a world that works best by collaborating with others. Because so many things are online, collaboration on problems is becoming the normal way of doing business. Now, it is going to help primary care physicians.
Featured photo credit: Seattle Municipal Archives via flickr.com