2008 Transition- Year end results

December 2008 transition to Cash Only + Medicare

Solo physician, suburban practice, large HMO penetration.
Conversion to cash practice, Medicare, Selfpay and Wellness-Retainer model at affordable market based prices.

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Comparisons given below are percentages comparing Jan-Dec 2007 to January-Dec 2008.

Patient Volume decreased by 43%.

New patients seen decreased by 49%

$ per patient seen Increased by 18%

Revenues decreased by 30%.
Expenses decreased by 20%.



In 2008, my practice had multiple payment options for patients.
These range from Selfpay, to Medicare, to Wellness and Retainer options.


The breakdown in patient visits is as follows:



Selfpay 50%

Wellness/Retainer 25%

Medicare/Insurers 25%



The breakdown in % revenues per patient class is as follows:



Selfpay 50%

Welness/Retainer 32.5%

Medicare/Insurers 17.5%



$ per patient visit is as follows:

Selfpay $83
Wellness/Retainer $104

Medicare $61

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Analysis:


Wellness Plan:

Averaged out to $104 per patient visit, 41% higher then Medicare, and 20% higher than selfpay. A good percentage of revenues came in from Wellness Plan fees, which is upfront money. In 2008 most plans were $200-300 upfront with $25 copays per visit. As many patients joined early in the year, the numbers were higher in the first quarter. To level out the revenues for 2009, I have started a monthly payment plan through Bank-ACH. This would help with patient budgeting and allow marketing to small businesses, and individuals with FSA's, HSA's and high deductible insurance plans. I am combining the Wellness and Retainer options for 2009. Info on this option can be found on my website. My job for 09 is to market my office to new Wellness patients throughout the year, whereas in 08 I only marketed within my practice. The new Wellness Plans will have no copay, but a higher upfront cost. This will save time at check-in and check-out by between 5-10 minutes per patient. Multiply that by 15 patients and that is 1-2 hours a day of time saved from paperwork, and instead used for patient care.Selfpay: averaging $83 per visit, lower than Wellness Plans, but 26% higher than Medicare. It is $19 more per visit than I received last year, or a relative increase of 23%. I have more time open in my schedule to fit in these patients, as I am not seeing the $10 copays or capitated patients. I hired a new part-time medical assistant who also works at an HMO dominated office. She is amazed that my patient's expect to pay for my services. At the HMO-dominated office, the patient's often get nasty and refuse to pay their copays. I have found that HMO patient's value their doctor's office by the cost of the copay. The lower the copay, the less value they place on their care, and the more entitled they become. Medicare: averaging $61 per visit: This is low as it includes office visits for venipuncture, B12 injections etc. Even if this number goes up to $75 per visit, it is still much lower than the selfpay, and a pittance compared to Wellness Plans. With Medicare payments from the government expected to drop, continued participation in Medicare is not guaranteed.

--------------------------------------------------------------------------------------------Other Good Effects:



Expenses have gone way down.
Overall expenses are down 20%.

My medical billing expenses have been slashed 66%.

I have eliminated one medical assistant during my day hours, and went from two to one medical assistants during evening hours.
My payroll expenses have been slashed by about 33%.My supply costs have also decreased by 33%.



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I have had a good number of patients leave my practice due to the dropping of insurance. Some have been nice about it and understanding, and some have been downright rude and insulting. So be it, I do not take it personally. Each patient may make their own decision. I am still available to anyone, they just have to be willing to pay me directly for my services, which are priced at an extremely reasonable rate.The feedback I have received from the patients who have remained has been terrific. While they wish they could pay me less, they have all been happy with the type of non-hurried care they receive. They can get appointments same day. We have time to help them coordinate their care with specialists. All things that were difficult or impossible in the old-insurance driven model.
My goal is to get to about 1000 active patients in my practice, instead of the average of 2500 in my community. If I can get 50% and up in the wellness plans, my revenues will be higher, and patient care will be much improved. Hopefully the addition of a monthly or quarterly payment option along with the results of marketing my practice will continue the successful transition.