5 answers to your recession questions: Tips to keep your practice solvent

The concerns aren't new, but the urgency is. Practice management consultants answer the questions physicians are asking most often.

By Emily Berry — Posted June 15, 2009

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The financial questions physicians previously asked consultants were focused on ways to optimize revenue. Now those same questions are being asked so practices can keep from closing their doors.

"The recession is fortunate for my practice. I seem to be very busy," said Jamie Claypool, president and founder of J. Claypool Associates, a practice management consulting firm based in Spicewood, Texas.

Claypool and other consultants say once-hypotheticals have become real dilemmas for their client physicians as financial solvency has become harder to maintain.

"If you're already in a tight economy, making a bad decision can push you over the edge," said Judy Capko, author and founder of her own consulting business based in Thousand Oaks, Calif.

The questions physicians are asking haven't changed, but have become more urgent, said Keith Borglum, a medical practice management consultant based in Santa Rosa, Calif.

Here are the questions practice management consultants say they have gotten the most from clients in the last six months, and their answers:

How can I get more patients in the door?

In this economy, attracting new patients and convincing existing ones to visit takes more than a gentle reminder, because newly uninsured or underinsured patients are foregoing care, consultants said.

Charles Carpenter, director of pay-for-performance programs at the Medical Advantage Group, a practice management consulting group owned by the Michigan State Medical Society, said he hears that employers who can afford to offer health insurance are switching to high-deductible plans. Those still cover preventive care, but patients don't realize it and delay appointments.

Carpenter said his group recommends improving your practice, making it more attractive to new patients and developing ways to better serve current patients.

"The drum we keep beating is to develop a patient-centered medical home. Develop these service attributes: being available 24-7; knowing which patients need help; planning for care."

Now is a good time to enlist your staff to help find new patients, particularly if staff members are giving up benefits or raises because business is slow, Capko said.

"Get together and share information about how well the practice is going, where you are," she said. "Ask them how they think they can help -- it's amazing some of the ideas they come up with."

One suggestion was having staff members call patients to ask about family members who might need a doctor.

Am I leaving money on the table?

This may be the physician's greatest financial anxiety, and it's not a new one. But if that money once represented the potential to invest in the practice, hire another nurse or buy real estate, now it is the difference between making a living and struggling.

"More than ever, I'm having doctors wanting to understand their numbers," Capko said.

Betsy Nicoletti, a Springfield, Vt.-based author and practice management consultant, said physicians often look for reassurance that they are collecting all they can.

Sometimes she can offer that validation. But often, she said, there are small coding and billing changes that can make a major difference in pay.

"We're not going to find you any one area where we're going to find an extra $100,000," she said. "There are probably five things we can work on, each one worth something in terms of increased reimbursement."

The recession has driven some doctors to take a closer look not only at coding and claims but also at whether all of their health plan contracts are worth keeping. "The attitude has kind of been, 'I have these contracts, and that's all I'm going to get,' " Capko said.

She advises clients to examine their top payers' contracts and what each pays per patient. "If some aren't providing enough to make profit, you need to renegotiate them or eliminate those contracts."

Should I adjust my staffing levels?

Practice management consultants say doctors facing declining patient volume and an uncertain economic future are wondering whether they should consider layoffs, and whether outsourcing billing would save the practice money (or make money).

Experts say it's sometimes risky to cut staff, because you can end up cutting to a level of inefficiency that becomes more costly than what you be paying out in a salary.

"If the volume is down, there may very well be places to cut staff, but the economics of a medical practice are there's not a tremendous amount of variable cost," said Jeff Sinaiko, president of Sinaiko Healthcare Consulting, based in Los Angeles.

A better option than cutting staff is making sure everyone is working "to the top of their certification" -- meaning, you don't have nurses doing data entry when they could help care for patients while a medical assistant works on records, Nicoletti said.

Borglum urges caution in making staff cuts. "You have to have adequate staffing to maximize the physician's efficiency," he said. "Better 10% overstaffed than 10% inefficient."

Consultants said there's no right answer on whether to outsource billing, but all recommended doing a close audit of the current system before deciding to switch either way.

Mark H. Bailey, a consultant based in Culver City, Calif., advises physicians to audit their accounts receivable to find out if in-house billing is working well.

Fewer than 20% of accounts should be 90 days old or more, and there should be no more than a 45-day turnaround time from the date of service to a bill going out in the mail. "They should be monitoring these performance indicators on a monthly basis," Bailey said.

How can I get my patients to pay their portion of the bill promptly?

In a rough economy, collecting a patient's out-of-pocket share becomes more important than ever to the practice. But it also is more delicate, given the financial stress so many patients are under.

Sinaiko said the best strategy is keeping an attitude of discipline and diligence about collecting information before the patient's visit and talking about payment before the service.

"There should be a heightened focus on the front end of the revenue cycle process," he said. When people have emergencies, or can't put off care and are having a hard time paying their share of the cost, Sinaiko advised identifying those issues up front. Otherwise, months can go by, and "you're in a situation with an old balance, trying to collect it."

As always, asking up front is easier said than done. But it's time to move past discomfort, Nicoletti said.

At one of her client practices, she is putting together scripts for front-desk staff so they know what to say, how to say it consistently and how to approach collecting the patient's portion respectfully.

"You've got to try to collect that $100 today," she said. Is now the right time to invest in an EMR?

Doctors without electronic medical record systems but also without a lot of excess capital are faced with deciding whether to invest now in a technological overhaul for their practices.

Although there is a reward on the horizon, the upfront costs remain a barrier for doctors considering a new system, Capko said. "It's a frightening time to think about spending on this kind of thing," she said, but she still recommends doing it because of the government incentives and potential improvement in patient care.

Claypool said advice about adopting an EMR is her top request from clients. "They don't want to make a million-dollar mistake, which you can do," she said. She recommends that her clients start the process now because of the Medicare incentives.

For those who do decide to adopt an EMR, the options can leave physicians confused, Carpenter said. "These guys have to work for a living -- this is overtime. This is extra credit. It can get pretty overwhelming."

But many advisers feel that wading through the options is worth it. Any increases in payment will come from quality reporting that requires using an EMR, Nicoletti said. She believes that physicians have no choice but to get on board.

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Recession-help resources

The AMA offers Web-based practice management guides (link). Here are some specific topics.

Attract and retain patients by becoming a medical home:

  • "Achieving medical home recognition" (link)

Identify and fix claims payment problems:

  • Guides to the claims management revenue cycle (link)
  • "How to appeal inappropriate health plan claim denials" (link)

Decide whether to adopt an EMR or EHR system:

  • "Information technology solutions: consider the potential savings," a members-only resource (link)
  • "15 questions to ask before signing an electronic medical record or electronic health record agreement" (link)

Adjust staffing, decide whether to outsource billing:

  • Assessing and Improving Staffing and Organization, $45 for members, $60 nonmembers; order item OP318500 (link)
  • "What is a medical billing service?", a members-only resource (link)

Collect the patients' share:

  • "Helping your patients understand their billing and payment responsibilities" (link
  • "Internal collections in the physician practice," a members-only resource (link)

Source: American Medical Association

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