If there’s one thing that’s been obvious over the past decade in health care, it’s that change is a fact of life. To survive turbulent times, medical practices need to take some basic steps to protect and enhance their bottom lines. Here are four strategies that can help your practice take care of business by creating a more dynamic operation that can withstand the winds of change.
When it comes to reimbursement, there’s only so much you can do. What insurers and government payers are willing to reimburse is largely out of physician control. As fee-for-procedure shifts to fee-for-quality, government implementation of various metrics measurements, such as the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-based Incentive Payment System (MIPS) and the Alternative Payment Model (APM), increasingly will play a role in business decisions.
In addition, medical practices will have to evaluate the cost of complying with regulations to determine whether the related revenue is worth it. This pathway can be dubbed the “cost-compliance balance.”
Understanding both your business and your costs can help you arrive at the best cost-compliance balance for your practice. Doing so will ensure that your practice doesn’t get beaten up with penalties or struggle to comply with regulations at a cost that exceeds the penalties.
Physicians have a lot more leverage concerning costs than they do concerning reimbursement. A typical medical practice has quite a bit of waste. And when you evaluate potential areas of cost containment, you’ll need to consider staffing levels, your knowledge base and automation, and any opportunity costs, such as decreased time for revenue-producing activities as a result of cost cutting, among other things.
Before you can market your practice, you’ve got to brand it. Ask the fundamental questions of who you are and what your practice is about. What sets your practice apart from other practices in your area? It might be hospitality, a great bedside manner or efficiency.
Whatever makes your practice unique, recognize it and develop it. These are so-called “nonclinical factors.” In essence, they involve that part of your practice that helps develop patient-physician rapport.
Once you’ve identified and established your practice brand, you can market it. This is important. Don’t wait for patients to walk through the door. Be proactive. Generally, a good marketing plan has four pillars:
Physicians can’t do it alone, and patients often spend more time in the presence of your nurses, phlebotomists and receptionists than they do with you. Good technical skills matter, but so do the so-called soft skills — personality and attitude.
A physician in a private practice has a lot of job titles, such as doctor, employer, business person, biller and contractor. But one of the most vital titles is leader. And there’s a difference between a leader and a boss. A boss tries to get things done, while a leader empowers and motivates the team to get things done.
Evolving with the times
These are just a few ways you can stay competitive in the midst of the many regulatory, economic and competitive challenges of the health care industry. Above all, the key is to evolve with the times and never let your practice stagnate.
Cooking up a spaghetti fund
Sometimes a physician practice just wants to try something new to see whether it works. Or, as the old saying goes, “Throw it against the wall and see if it sticks!” If this approach appeals to you, budget for it by creating a “spaghetti fund.” This way, the experiment becomes a planned expense rather than a potentially unpleasant financial surprise.
After you make the change, be sure to look at the numbers. Don’t hesitate to abandon the experiment if it’s not working. Adapting and reinventing are key strategies to survival and success.