No one wants to talkabout it—the businessof medicine. But to survivein our age of managedcare, physicians must focuson their business as wellas their practice. Managedcare’s dominance over ourhealthcare system has beena bitter pill for many physiciansto swallow, leavingthem working longer and harder hours to maintain an adequate levelof compensation. To make ends meet, physicians are increasinglyturning to investments that do not require an inordinate amount ofincremental time be allotted in an already busy day.
Guru Peter Lynch coined the best known principle of investing—“Invest in what you know.” Using this simple principle, some physicianshave found there is no better place to invest than their ownpractices. Here a physician can achieve the ultimate goal of improvingpatient care while at the same time producing a profit. From physicaltherapy to allergy programs, physicians are adding ancillary services,enhancing patient care, and giving lethargic profit margins a muchneeded shot in the arm. But failures are as abundant as success stories,and a dose of healthy skepticism is the best prescription for sortingthrough the revolving door of “sure–thing” consultants bearing giftsin the waiting area.
Common sense dictates a focus on areas of established medicinewith which physicians are both comfortable and competentand which are needed by their patients. Before diving in, physiciansshould consider four critical categories, and ask themselves these importantquestions:
Patient Need
- Do my patients show a specific medical need for the service?
- Will this ancillary service provide added convenience or comfort for my patients?
- Do I have the knowledge and competency in this service to provide quality care to my patients?
- Is this established medicine?
Planning
- Do I have a solid financial plan and budget?
- Have I evaluated all regulatory compliance issues?
- Have I consulted with my attorneys and accountants?
- Do I have the space?
- Do I have a marketing plan?
Operation and Administration
- Am I capable of managing the business?
- Will I need additional staff?
- Do I have the ability to train staff and supervise the clinical delivery of the ancillary service?
- Do I have quality control measures in place?
Financial Management
- Are the services self–pay or reimbursed by insurance?
- Have I evaluated all coding, billing and reimbursement issues?
- Can I track every cost associated with the ancillary service?
- How will I assess financial performance?
Individual gifts can be made in many forms. Unfortunately,sometimes donors can overlook the importance of structuringtheir gifts to maximum advantage.
Case in Point:
With the appropriate planning and preparedness, physicians canand do enhance patient care while improving financial performance.Many physicians, however, do not take advantage of the lucrative opportunitiesdespite the desire to do so. The project can seem dauntinggiven the time and risk involved. Some may be wary of taking on anentrepreneurial step in light of regulatory issues such as Stark. Othersmay not want to go through the planning and implementation processin an already impossible day.
The set up and delivery of an ancillary practice area can present alevel of complexity with which some physicians might not be comfortable.Rather than go it alone, some practices have found hiring amanagement group to be beneficial. Physicians do what they do best—oversee the clinical function and treatment plans— while the managementteam brings experience and a vast knowledge of the service marketto set up and operate the segment.
If you do elect to use a management group, you still have to do yourhomework. There are many pretenders. A careful interview and investigationwill help you make a wise choice and prevent a disaster. Beforeyou allow an outsider into your practice, at a minimum, ask these fivequestions:
- How long has the company been in business?
- What is their experience?
- Do they have any references?
- What are their successes and failures?
- Are there any hidden costs?
Physicians can pursue opportunities to enhance compensation withstrategies that follow some simple business principles. Going it alone isa good option for those ready to put in the time and energy to plan anddo it right. But others will be more comfortable working with the rightmanagement group that has expertise in the business.
With planning, diligence and management, providing access toquality care while improving a practice’s profitability is feasible. Keepingpatients healthy and happy is the true goal of good physicians. Physiciansshould do what they love—and do it better—and the moneywill follow.
Margarita Seaman, MHA is the Chief Operations Officer of AllergyPractice Consulting Group, Inc. She has over 15 years of health caremanagement experience, having served as director of a division of theNix Healthcare System. She holds a degree in dentistry from UniversidadJaveriana Escuela de Odontologia in Bogota, Colombia, and aMasters in Health Care Administration from Trinity University in SanAntonio, Texas. Seaman was selected as “40 under 40 Rising Stars of SanAntonio” by the San Antonio Business Journal.
