What makes a practice hum in the 21st century?

How providers cope with additional workloads

Physicians practicing in the 21st century face a myriad of problems and challenges that were unheard of just a few years ago. They must maximize their reimbursement but at the same time make sure they don’t get accused of fraud. They must see more patients to make up for declining margins, but at the same time they are drowning in paperwork. Instead of just sending out a bill and getting a check back in the mail, physicians have to fill out endless paperwork and jump through multiple hoops just to get paid.

At the same time, patients expect more. They don’t want to wait for an appointment and they refuse to spend a lot of time in the waiting room. They’re a demanding bunch and they’ll switch doctors in a heartbeat if they aren’t happy. Many insurers now expect physicians to offer disease management programs for their chronically ill patients. Insurers are paying less and at the same time physician practices have to deal with more overhead and an increasingly complex array of payer rules.

Practices can no longer get away with the inefficiencies of the past because the margins are no longer enough to compensate for them, points out Bob Elson, MD, MS, of iMcKesson Provider Solutions Group, an Internet-based technology company based in Minneapolis.

It all adds up to greater costs, limited reimbursement, and shakier financial grounds for today’s physicians. Stories of bankrupt practices and declining incomes for physicians are often in the news. But despite it all, some practices are flourishing, even in these difficult times. For instance, at Collom and Carney Clinic Association in Texarkana, TX, 95% of the group’s 68 physicians made the most money they’ve ever made in 2000.

The salaries of physicians in Collom and Carney’s internal medicine department are 180% of the median salary for similar physicians included in the Medical Group Management Association (MGMA, with headquarters in Engelwood, CO) annual survey.  "If costs are going up and reimbursement is limited, medical groups must be more efficient," says David N. Gans, MSHA, CMPE, director of survey operations for the MGMA.

The organization’s report, Performance and Practices of Successful Medical Groups 2000 surveyed more than 1,100 physicians practices nationwide. About 1% to 15% of the groups surveyed met the MGMA’s criteria for better performers. According to the MGMA report, better performers have:

  • lower operating costs per procedure;
  • higher revenue per physician;
  • higher physician cost (compensation and benefits);
  • enhanced productivity;
  • better and quicker collections;
  • less bad debt.

Better practices focus on efficiency and effectiveness and take proactive steps to avoid mistakes. "In the old days, the profit margins were so big that if you made mistakes, it didn’t matter. Times are tight now and margins of management error are smaller. Practices can no longer absorb their mistakes like in the past," says Peter Lucash, president and chief executive officer of Lucash & Co., a Charleston, SC, consulting firm..

A well-prepared business plan is a critical management tool for running a successful practice in today’s health care market, Lucash says.  "Physicians are being pulled in every direction. They are being forced to see more patients than they can reasonably handle. Practices are become more like a bank and carrying large receivables," Lucash says.

Productivity, cost efficiencies, and collections contribute to a practice’s bottom line, Gans points out. The MGMA has found examples of practices that are more than 50% more productive than their peers. Extended hours, marketing efforts, a physical plant that enables them to see more patients, and physician compensation tied to productivity are among the techniques the more productive practices utilize.

The report found that savvy medical practices are taking advantage of e-business technology to streamline their practices. Only 32.85% of all the groups surveyed reported having no Web page. The vast majority used their Web page for general information and marketing but a sizeable percentage of practices, 16.67% use the Internet for patient questions.

"Communication between physician and patient is a new electronic market sector," Elson says, adding that use of technology can dramatically reduce the amount of time physicians and staff spend filling patient requests. For instance, he worked with a 15-physician clinic that was getting 370 calls each day for reasons other than setting appointments. The clinic calculated that the whole process was taking 28 hours a day of telephone nurse time and six hours a day of physician time — 3.5 FTEs for nurses and three-fourths FTE for physicians just to support the requests of patients of 15 primary care physicians.

Within nine months of using iMcKesson’s Practice Point Clinical Solutions, the practice had reduced its telephone nurse services by one-half FTE, avoided a planned hire for an additional full-time phone nurse, and reduced chart room outsourcing by three FTEs.