LGT's Profit Sense

Every medical practice faces ongoing challenges in maintaining a successful bottom line. New challenges arise whenever Medicare and Medicaid policy, or the economy, changes. Still, a handful of problems rise to the top in most medical practices. Here are some ideas for solving them before they become overwhelming.

What are some problems?

In looking at the top challenges medical practices face, administrative burdens might well be first on the list. Most doctors practice medicine because they want to help people and because they are interested in science and medicine. They likely do not expect to spend a significant amount of time filling out forms and figuring out how to practice medicine profitably.

Although administrative burdens are not likely to go away, there are some potential solutions to help ease them. These include staying current with business trends and creating standard operational procedures and routines. It is also important to train and empower select staff members to handle most business-related activities, so you can concentrate on practicing medicine.

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 is 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 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 battle with payers, and it is hard to imagine that this problem is going to go away anytime soon. However, having a lean practice with motivated and trained staffers who can stay on top of billing and payer issues can go a long way toward relieving this struggle. Size matters in negotiations with payers, so again, group practices or regional networks can help to make this situation more manageable.

What about patients?

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 is important for physicians to be firm in clarifying doctor-patient roles. Sometimes “no” is the appropriate response. And sometimes, like parenting, medicine can be a business of “tough love.”

What about staff?

Keeping staff is another common challenge. Recruiting and retaining skilled staff — from the receptionist to the physician partners — can be tricky. Studies indicate that high pay and benefits are not the only reasons people stay in a job (though, to be fair, they will 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 do not necessarily have to be raises. Ideas to consider include extra paid time off, gift cards and flexible schedules. Showing appreciation to staff for their efforts can go a long way.

What about legal issues?

Finally, liability can be another major headache. 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 is a solution here, it is for doctors to practice defensive medicine, erring on the side of caution. Though it defies trends in paying, physicians who order more diagnostic procedures frequently find this can lead to less litigation.

Good management leads to a healthy practice

There is no doubt that practicing medicine in modern times has challenges, particularly in the areas of billing and reimbursement. But savvy doctors who recognize they are business owners as well as physicians will ensure the practice runs smoothly and profitably while continuing to offer high-quality patient care.

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