We recently were asked to help a Podiatrist who ran his own practice to develop a business strategy to survive in our new healthcare world. This Podiatrist loves what he does for a living and enjoys spending time with his patients. He was very surprised to discover the new financial realities of practicing medicine and running a practice to generate enough income to pay himself, his staff, malpractice insurance, and other basic office expenses. Below are 4 learnings that helped to transform the practice to be financially sound as well as continue to practice medicine with a focus on the patient.
1. Seeing the Right number of patients. The Podiatrist, who enjoyed the personal contact he has with his patients, was seeing about 15 patients a day. He was surprised to learn that some of his competitors were seeing 50-60 patients per day in order to pay their bills. He agreed that he will need to see 25 patients each day in order to achieve his financial goals.
2. Understanding the CPT billing codes and reimbursement rules. The Podiatrist was very unhappy to find out that his average collected fee per procedure was only $37 (after large contracted discounts with insurance companies and Medicare). A large volume of his visits was toe nail trimmings for a diabetic population that only netted him $24 per visit. On the higher end of his fee schedule, the amputation of a toe netted him $248. He looked at the report and had a brief (and a little remorseful) reflection on the years he spent in medical school to be earning these low fees per procedure. He realized that he needed to pay more attention to how much he was spending on each procedure and the mix of CPT coded procedures he was providing (while not amputating every toe he trimmed a nail on).
3. Selecting a good billing company. The billing company that the Doctor used was not meeting the needs of his practice. Sending over a chargeable procedure / visit was like shooting something into a black hole and hoping a few dollars comes out the other end. There was little transparency on what charges were made for the week/month, which ones were actually paid, and what the balances were. While the Podiatrist needed a Partner in a billing company who would coach him on the latest reimbursement policies and be an advocate for collections, he was instead being provided with sloppy service with very little transparency. He needed to make a change.
4. Organizing the staff to serve a higher volume of patient visits. The Podiatrist realized that in order to go from seeing 15 patients per day to seeing 25, he needed to get his two assistants on board with his Plan. They needed to adjust the scheduling of patient visits, carefully mange the patient flow through the 3 exam rooms, and maximize the effectiveness of the Doctor by doing anything that they can do so the Doctor didn’t have to. His time was at a premium and needed to be managed accordingly.
The result was that this 1-physician practice is now on a path to grow by more than 80% and allow the physician to earn a higher salary. The practice has an emerging air of efficiency while still practising sound medicine in a caring environment.