Staying Solvent, and Maybe Even Profitable, in Tough Times
Maintaining profitability is a challenge for medical practices in the best of times. When the economy undergoes a sudden and unforeseen downturn, it can be hard for any business, including a physician practice, to stay afloat.
What’s worse, you may find coping with economic change even more difficult because of the constantly shifting Medicare, Medicaid and health insurance landscape. Here are some ways to stay solvent — and maybe even profitable — during these tough times.
Manage administrative burdens
In looking at the top challenges that medical practices face, first on the list might well be administrative burdens. Most doctors go into medicine because they love science and medicine — and they want to help people directly. You may not have expected to spend so much time filling out forms and figuring out how to run a profitable practice.
Although administrative burdens aren’t likely to go away, there are some potential solutions. These include staying current with business trends and creating standard operational procedures and routines. It’s also important to train and empower select staff members to handle most business-related activities — so you can concentrate on practicing medicine. Finally, stay current with the various COVID-19 relief provisions available to determine whether you’re eligible to benefit from them.
The decision of whether to opt for maintaining an independent practice vs. joining a health care system is another significant challenge many physicians face. Currently, there’s a trend toward consolidation into larger group practices, thus enabling physicians to leverage size without having to work for hospitals. This option also allows physicians to share resources — which can go a long way toward relieving the administrative burdens. But, for some physicians, hospital work may be the way to go. It all depends on your personality, energies and focus.
Often one of the biggest headaches for physicians is the need to do battle with payers, and it’s hard to imagine that this problem is going to go away anytime soon. However, having a lean practice with motivated and trained staffers who are incentivized to stay on top of billing and payer issues can go a long way toward easing the pain. Size matters in negotiations with payers so, again, group practices or regional networks can help to make this situation more manageable.
Emphasize your expertise
The advent of the Internet and easy access to health care information — regardless of how inaccurate or uninformed it is — can complicate the doctor-patient relationship. It can be hard to balance practicing good medicine with handling patients who attempt to dictate their own health care — particularly in an atmosphere in which many institutions are using positive feedback as a major metric for salaries and bonuses.
It’s important for physicians to be firm in clarifying doctor-patient roles. Sometimes “no” is the appropriate response. And sometimes, like parenting, practicing medicine involves using “tough love” to get your message across (within reason and without risking legal repercussions, of course).
Empower your staff
Keeping staff also is a common challenge. Recruiting and retaining skilled staff — from the receptionist to physician partners — can be tricky. Studies indicate that high pay and benefits aren’t the only reasons people stay in a job (though, to be fair, they’ll generally appreciate those things).
A key to staff retention is often related to empowerment — letting staff be in charge of their duties and showing them that what they do is important and appreciated. Rewards for good results can be both creative and meaningful, and don’t necessarily have to be raises. Ideas to consider include extra paid time off, flexible schedules and employee recognition rewards (such as gift cards).
Beware of legal liability
Finally, a top headache is liability. Some states and specialties are hit particularly hard by liability insurance. Sometimes this issue drives physicians out of private practice into health care systems — because those systems typically pick up the tab for liability insurance.
If there’s a solution here, it’s for doctors to practice defensive medicine, erring on the side of caution. Although ordering more diagnostic procedures may drive up costs, physicians who do so may lessen the risk of litigation.
Survive and thrive
In the era of COVID-19 and all the related fallout from the pandemic, it’s easy to lose sight of these commonsense ways to keep your medical practice’s head above water. But sound management methods work — both in good times and bad. Using them can help your practice survive in the short term and thrive in the future.
If you have any questions, please contact Deirdre Hartmann or Harlene Stevens at (973) 298-8500.