Cash Transition stats by popular request
I have been asked by many colleagues on Sermo, as well as followers of this blog to post further stats of my practice transition away from third parties.
So here goes....
First some history:
Back in 2007, I was getting fed up with the third party control of healthcare. I had a "normal" heavily HMO and managed care family practice. I was exploring options that I would enjoy more. My daughter thinks I am a good cook, but my back can not handle being on my feet for too long, so becoming a chef was out of the picture.
I had a few other options to remain in family practice.
1) Continue as is, as a solo family practice doc.
2) Join a large family practice group without walls, where the group would share a taxpayer-id and other management resources, and would handle all the contracts with the third parties. Advantages included increased fees from third parties. Disadvantages included having to toe the line of the group practice. As I do not always play well with others, I did not choose this option.
3) I also explored converting my practice to a concierge model. This also had many advantages including a guaranteed salary for three years, less patients seen per day, and no dealings with third parties. Disadvantages included the high membership fees for patients that would scare off 95% of my practice, and possibly brand me as a "country club doctor". While sticks and stones can break my bones, but names can never hurt me, I decided against Concierge as I had developed many strong relationships with my patients and I truly did not want to abandon them, or make my fees out of their reach.
So I then did what I usually always do. I made up my own business model that best fit my own personal healthcare philosophy.
I decided to transition away from all third parties other than Traditional Medicare in January 2008. I also offered prepaid yearly Wellness options, some with no copays, others with small copays, as well as also allowing regular self-pay fee for service. In 2009, I moved all my Wellness Plans to no copays. My Wellness Plan fees average about 30-35% of a Concierge practice. Please make note that I do not offer Concierge services, so I do not charge Concierge fees. There is a Concierge physician in my area who does offer these services and I have referred patients to his practice who are looking for that type of service.
OK.
Enough history..
Here are some stats.
2010- Wellness Plan-Self Pay- Traditional Medicare
2007- Normal Third party dominated practice
1st two quarters 2010 revenues are now 4% higher than 2007
1st two quarters 2010 expenses are down 23% from 2007. They would be down more, but my type of practice requires more to be budgeted for marketing. The payroll expense, not including my salary is down 40% from 2007. If you do not deal with referrals, nor deal with medical billing, and see about half as many patients per day, the staff requirements drop!!
1st two quarters 2010 patient visits are just under half of those seen in 2007, so $/patient in 2010 ($126) is just under double 2007 ($64).
----------------------------------------------
Now for what I find interesting.
I calculate percetage revenues from three different categories;
1) Wellness Plans
2) Self-pay or fee for service each visit
3) Traditional Medicare and balance billing secondary insurances
Here are the percentages for each 1st two quarters 2010 for 2007---2010.
Wellness Plans:
2007 0%, 2008 43%, 2009 53%, 2010 56%
Self-Pay
2007 20%, 2008 23%, 2009 32%, 2010 32%
Medicare-secondary insurance-(third party hmo's, ppo's in 2007 only):
2007 79%, 2008 32%, 2009 15%, 2010 12%
----------------------------
More interesting tidbits:
Revenues per patient visit for 1st two quarters 2010 by type of payer:
Medicare $80.89
Self-Pay (payment-at-time-of-service) $114.10
Wellness Plans (Yearly Retainer) $162.39
My conclusion: For all the docs that think that a zero copay retainer style patient will overutilize your services, I say:
1) They won't, as my practice proves
and
2) Who cares if the revenues per visit double Medicare, while allowing you more time to spend with each patient, building up trust and the doctor-patient relationship once again!!!
----------------------------
Other interesting tidbits about my practice.
I presently average about 11-12 patient visits per day.
My 1st two quarters 2010 medical billing costs are about 30% of 2007.
I share office space with my spouse, who is a psychiatrist. We share one full-time employee. We have no other staff. We do not need a referral coordinator, nor a medical receptionist. We have a voicemail system. Many patients have my cell phone number for urgent or emergent situations. They have never abused that privilege.
For me, this practice style has been a no brainer, and I do not forsee myself going back to third parties. I will probably end up dropping Medicare participation within the next few years, or sooner dependent upon how bad Obamacare actually turns out.
I hope this post has fueled some thought.
I welcome any comments.
Sunday, August 15, 2010
Friday, April 23, 2010
Cash Transition stats by popular request
I have been asked by many colleagues on Sermo, as well as followers of this blog to post further stats of my practice transition away from third parties.
So here goes....
First some history:
Back in 2007, I was getting fed up with the third party control of healthcare. I had a "normal" heavily HMO and managed care family practice. I was exploring options that I would enjoy more. My daughter thinks I am a good cook, but my back can not handle being on my feet for too long, so becoming a chef was out of the picture.
I had a few other options to remain in family practice.
1) Continue as is, as a solo family practice doc.
2) Join a large family practice group without walls, where the group would share a taxpayer-id and other management resources, and would handle all the contracts with the third parties. Advantages included increased fees from third parties. Disadvantages included having to toe the line of the group practice. As I do not always play well with others, I did not choose this option.
3) I also explored converting my practice to a concierge model. This also had many advantages including a guaranteed salary for three years, less patients seen per day, and no dealings with third parties. Disadvantages included the high membership fees for patients that would scare off 95% of my practice, and possibly brand me as a "country club doctor". While sticks and stones can break my bones, but names can never hurt me, I decided against Concierge as I had developed many strong relationships with my patients and I truly did not want to abandon them, or make my fees out of their reach.
So I then did what I usually always do. I made up my own business model that best fit my own personal healthcare philosophy.
I decided to transition away from all third parties other than Traditional Medicare in January 2008. I also offered prepaid yearly Wellness options, some with no copays, others with small copays, as well as also allowing regular self-pay fee for service. In 2009, I moved all my Wellness Plans to no copays. My Wellness Plan fees average about 30-35% of a Concierge practice. Please make note that I do not offer Concierge services, so I do not charge Concierge fees. There is a Concierge physician in my area who does offer these services and I have referred patients to his practice who are looking for that type of service.
OK.
Enough history..
Here are some stats.
2010- Wellness Plan-Self Pay- Traditional Medicare
2007- Normal Third party dominated practice
1st quarter 2010 revenues are now equal to 2007
1st quarter 2010 expenses are down slightly from 2007. They would be down more, but my type of practice requires more to be budgeted for marketing.
1st quarter 2010 patient visits are just under half of those seen in 2007, so $/patient in 2010 ($125) is over double 2007 ($61).
Now for what I find interesting.
I calculate percetage revenues from three different categories;
1) Wellness Plans
2) Self-pay or fee for service each visit
3) Traditional Medicare and balance billing secondary insurances
Here are the percentages for each 1st quarter period for 2007---2010.
Wellness Plans:
2007 0%, 2008 43%, 2009 53%, 2010 60%
Self-Pay
2007 20%, 2008 23%, 2009 32%, 2010 28%
Medicare-secondary insurance-(third party hmo's, ppo's in 2007 only):
2007 79%, 2008 32%, 2009 15%, 2010 11%
----------------------------
Other interesting tidbits about my practice.
I presently average about 12-15 patient visits per day.
My 2010 medical billing costs are about 25% of 2007.
I share office space with my spouse, who is a psychiatrist. We share one full-time employee. We have no other staff. We do not need a referral coordinator, nor a medical receptionist. We have a voicemail system. Many patients have my cell phone number for urgent or emergent situations. They have never abused that privilege.
For me, this practice style has been a no brainer, and I do not forsee myself going back to third parties. I will probably end up dropping Medicare participation within the next few years, or sooner dependent upon how bad Obamacare actually turns out.
I hope this post has fueled some thought.
I welcome any comments.
So here goes....
First some history:
Back in 2007, I was getting fed up with the third party control of healthcare. I had a "normal" heavily HMO and managed care family practice. I was exploring options that I would enjoy more. My daughter thinks I am a good cook, but my back can not handle being on my feet for too long, so becoming a chef was out of the picture.
I had a few other options to remain in family practice.
1) Continue as is, as a solo family practice doc.
2) Join a large family practice group without walls, where the group would share a taxpayer-id and other management resources, and would handle all the contracts with the third parties. Advantages included increased fees from third parties. Disadvantages included having to toe the line of the group practice. As I do not always play well with others, I did not choose this option.
3) I also explored converting my practice to a concierge model. This also had many advantages including a guaranteed salary for three years, less patients seen per day, and no dealings with third parties. Disadvantages included the high membership fees for patients that would scare off 95% of my practice, and possibly brand me as a "country club doctor". While sticks and stones can break my bones, but names can never hurt me, I decided against Concierge as I had developed many strong relationships with my patients and I truly did not want to abandon them, or make my fees out of their reach.
So I then did what I usually always do. I made up my own business model that best fit my own personal healthcare philosophy.
I decided to transition away from all third parties other than Traditional Medicare in January 2008. I also offered prepaid yearly Wellness options, some with no copays, others with small copays, as well as also allowing regular self-pay fee for service. In 2009, I moved all my Wellness Plans to no copays. My Wellness Plan fees average about 30-35% of a Concierge practice. Please make note that I do not offer Concierge services, so I do not charge Concierge fees. There is a Concierge physician in my area who does offer these services and I have referred patients to his practice who are looking for that type of service.
OK.
Enough history..
Here are some stats.
2010- Wellness Plan-Self Pay- Traditional Medicare
2007- Normal Third party dominated practice
1st quarter 2010 revenues are now equal to 2007
1st quarter 2010 expenses are down slightly from 2007. They would be down more, but my type of practice requires more to be budgeted for marketing.
1st quarter 2010 patient visits are just under half of those seen in 2007, so $/patient in 2010 ($125) is over double 2007 ($61).
Now for what I find interesting.
I calculate percetage revenues from three different categories;
1) Wellness Plans
2) Self-pay or fee for service each visit
3) Traditional Medicare and balance billing secondary insurances
Here are the percentages for each 1st quarter period for 2007---2010.
Wellness Plans:
2007 0%, 2008 43%, 2009 53%, 2010 60%
Self-Pay
2007 20%, 2008 23%, 2009 32%, 2010 28%
Medicare-secondary insurance-(third party hmo's, ppo's in 2007 only):
2007 79%, 2008 32%, 2009 15%, 2010 11%
----------------------------
Other interesting tidbits about my practice.
I presently average about 12-15 patient visits per day.
My 2010 medical billing costs are about 25% of 2007.
I share office space with my spouse, who is a psychiatrist. We share one full-time employee. We have no other staff. We do not need a referral coordinator, nor a medical receptionist. We have a voicemail system. Many patients have my cell phone number for urgent or emergent situations. They have never abused that privilege.
For me, this practice style has been a no brainer, and I do not forsee myself going back to third parties. I will probably end up dropping Medicare participation within the next few years, or sooner dependent upon how bad Obamacare actually turns out.
I hope this post has fueled some thought.
I welcome any comments.
Friday, March 26, 2010
Medicare- Should we still participate?
As you may know, at least those of you who have followed my blog, my practice is free of third parties, other than Traditional Medicare. My reasons were many, but one of the main reasons was that Medicare did not put burdensome rules and regulations between me and my patients.
If I need an MRI, I give my patient a prescription. No referral or precertification necessary. So I did not see a reason to stop participation with Medicare, especially as Medicare, in my area of New Jersey, is actually a better payor than other insurers.
But now, we are being threatened with a 21% fee schedule reduction for Medicare. While it may or may not occur, I am getting pretty tired of all the b.llsh.t. There will come a point, and it may be soon, that Medicare, in my office, will no longer be accepted. Medicare accounts for about 15-20% of revenues. If I withdrew participation, I would probably keep about 30-40% of my Medicare patients, similar to the percentage of patients I retained when I terminated other insurers. If other docs stop taking Medicare as well, I would probably retain more. Revenues from "Medicare patients" would probably remain neutral.
Every practice needs to make a decision for themselves. But if you want my advice, and since you are reading this blog, you at least want to read my advice, it is to make plans to opt out of Medicare, as well as all your other insurers as well. Start acting like any other small business, and market your product directly to your customers, who happen to be your patients.
Physicians are responsible for the healthcare mess we are in. We allowed ourselves to be drawn into the third party system, with the hope of growing our practices. We hoped that the third party system would change our incomes for the better.
So I have a question for you.
Just how is all that hope and change working out for you?
Start planning your escape from the third party system. If you are a specialist, who relies on big ticket procedures, start trimming your overhead, and bring your fees to an affordable level, that still allows you to profit. If you are in primary care, it should be an easier adjustment, as primary care usually has less big ticket items. I dropped my practice overhead by 50% when I made the transition. As I had no business background prior to starting my practice in 1998, yet I was able to develop a healthcare business model that works, there is no reason why you can not!
And for all the docs on salary at hospitals or in academia, who do not feel threatened by Obamacare, what will happen to you, and to your salaries, when your hospital system can not afford to stay in business due to lower "reimbursements"? The first place they will go to make up for the cuts will be your salaries or your jobs.
So the physician community must get together, to take back control of our profession, and move it away from third party control, whether from government or insurers. Start your plans to drop Medicare, along with all the third parties, before it is too late!
If I need an MRI, I give my patient a prescription. No referral or precertification necessary. So I did not see a reason to stop participation with Medicare, especially as Medicare, in my area of New Jersey, is actually a better payor than other insurers.
But now, we are being threatened with a 21% fee schedule reduction for Medicare. While it may or may not occur, I am getting pretty tired of all the b.llsh.t. There will come a point, and it may be soon, that Medicare, in my office, will no longer be accepted. Medicare accounts for about 15-20% of revenues. If I withdrew participation, I would probably keep about 30-40% of my Medicare patients, similar to the percentage of patients I retained when I terminated other insurers. If other docs stop taking Medicare as well, I would probably retain more. Revenues from "Medicare patients" would probably remain neutral.
Every practice needs to make a decision for themselves. But if you want my advice, and since you are reading this blog, you at least want to read my advice, it is to make plans to opt out of Medicare, as well as all your other insurers as well. Start acting like any other small business, and market your product directly to your customers, who happen to be your patients.
Physicians are responsible for the healthcare mess we are in. We allowed ourselves to be drawn into the third party system, with the hope of growing our practices. We hoped that the third party system would change our incomes for the better.
So I have a question for you.
Just how is all that hope and change working out for you?
Start planning your escape from the third party system. If you are a specialist, who relies on big ticket procedures, start trimming your overhead, and bring your fees to an affordable level, that still allows you to profit. If you are in primary care, it should be an easier adjustment, as primary care usually has less big ticket items. I dropped my practice overhead by 50% when I made the transition. As I had no business background prior to starting my practice in 1998, yet I was able to develop a healthcare business model that works, there is no reason why you can not!
And for all the docs on salary at hospitals or in academia, who do not feel threatened by Obamacare, what will happen to you, and to your salaries, when your hospital system can not afford to stay in business due to lower "reimbursements"? The first place they will go to make up for the cuts will be your salaries or your jobs.
So the physician community must get together, to take back control of our profession, and move it away from third party control, whether from government or insurers. Start your plans to drop Medicare, along with all the third parties, before it is too late!
Letter to NJ Governor Chris Christie
March 26, 2010
Living in New Jersey, we have a new governor, who actually happens to be a republican in a very liberal state. He was elected, he states, to get rid of corruption and to balance a state budget that is billions in debt, without raising taxes, and to make the state an easier place to do business. My fear is that he has focused too much on budget cuts, while not fully researching how Obamacare affects healthcare for New Jersey residents.
I have written a letter to Governor Christie, emailed on Friday, March 26th, 2010, a copy of which is shown below.
-----------------------------------------------------------------------------
To: Chris Christie (R-NJ), Governor
I urge you to take all available actions to protect New Jersey from a federal government takeover of healthcare. Such actions include filing a lawsuit against potentially unconstitutional provisions and securing New Jersey's ability to opt out of federal mandates. More than a dozen states have already filed such lawsuits challenging the individual mandate and Medicaid provisions in the bill. The Medicaid provisions alone will likely cost New Jersey billions of tax dollars we cannot afford.
I urge you to direct your Attorney General, Paula Dow, to join with these other states in doing everything possible to protect my rights to make my own health care choices, and also to protect physicians, so that they can offer the best care possible, without government or insurance interference.
As an independent family physician, I would welcome you to come to my medical office, which has given up all insurance contracts, other than Medicare. You will find that cost-effective high quality care occurs to a greater extent when the insurance companies and the government stay out of healthcare decisions.
I urge you to not repeat the same mistakes that other politicians have made, by listening only to your political appointees. To get a real view of healthcare today, you need to talk to independent physicians, without ties to hospitals or other institutions. Only then can you get enough data to formulate a real-world opinion on the state of healthcare in New Jersey.
-----------------------------------------------------------------------------------
OK.
So let's take a vote.
What response will I get?
A: Form letter
B: None
C: Real response by letter or email
D: Governor Christie acceptance to visit my office
My hope is for choice D, while I expect choice A.
Living in New Jersey, we have a new governor, who actually happens to be a republican in a very liberal state. He was elected, he states, to get rid of corruption and to balance a state budget that is billions in debt, without raising taxes, and to make the state an easier place to do business. My fear is that he has focused too much on budget cuts, while not fully researching how Obamacare affects healthcare for New Jersey residents.
I have written a letter to Governor Christie, emailed on Friday, March 26th, 2010, a copy of which is shown below.
-----------------------------------------------------------------------------
To: Chris Christie (R-NJ), Governor
I urge you to take all available actions to protect New Jersey from a federal government takeover of healthcare. Such actions include filing a lawsuit against potentially unconstitutional provisions and securing New Jersey's ability to opt out of federal mandates. More than a dozen states have already filed such lawsuits challenging the individual mandate and Medicaid provisions in the bill. The Medicaid provisions alone will likely cost New Jersey billions of tax dollars we cannot afford.
I urge you to direct your Attorney General, Paula Dow, to join with these other states in doing everything possible to protect my rights to make my own health care choices, and also to protect physicians, so that they can offer the best care possible, without government or insurance interference.
As an independent family physician, I would welcome you to come to my medical office, which has given up all insurance contracts, other than Medicare. You will find that cost-effective high quality care occurs to a greater extent when the insurance companies and the government stay out of healthcare decisions.
I urge you to not repeat the same mistakes that other politicians have made, by listening only to your political appointees. To get a real view of healthcare today, you need to talk to independent physicians, without ties to hospitals or other institutions. Only then can you get enough data to formulate a real-world opinion on the state of healthcare in New Jersey.
-----------------------------------------------------------------------------------
OK.
So let's take a vote.
What response will I get?
A: Form letter
B: None
C: Real response by letter or email
D: Governor Christie acceptance to visit my office
My hope is for choice D, while I expect choice A.
Wednesday, March 24, 2010
The Day After
The Day After Obamacare became law.
To anyone reading this blog.
With Obamacare now law, the days of private practice in a third-party dominated system are just about over. If you choose to continue to participate with Medicare, and private insurance payers, you better get real lean, or join a group practice, or even work for a hospital system.
The problem with all the above options are they do not work for the independent minded docs. I did not go into medicine to work for someone else. I went into medicine for the independence.
So I will state again, the days of private practice in a third-party dominated system are just about over.
But......
You can still get out of the third party system, make your office lean and efficient, and work directly with your patients. Work for a single payer system, where the single payer is the patient.
I have been away for awhile, concentrating on other issues. My practice is slowly growing, while my office expenses are slowly being whittled down further. It is amazing at all the fluff offices spend on, that we really do not need.
Start thinking like a businessperson, and remember the customer is always right in a business transaction, not a healthcare decision. Cater to individuals, and prove you are worthy of more than a $10 copay.
There will end up being a two-tiered system this decade. It will consist of the government run large practices and hospital systems, with all their largesse and accompanying overhead, overcrowding, and long waits.
And there will be the remaining independent practices, who cater to no one but their patients. Independent practices that offer cost effective quality care in a timely manner.
So everyone, make your decision , and live with it. Otherwise stop complaining about Obamacare and either get on board, or jump off like I did, and chart your own course!!
I would post more on this blog, if I got any feedback or comments. I do not feel like anyone is listening so the posts have trickled.
BTW, I started a new blog, Healthscare101blog, which can be found here. Let me know what you think.
To anyone reading this blog.
With Obamacare now law, the days of private practice in a third-party dominated system are just about over. If you choose to continue to participate with Medicare, and private insurance payers, you better get real lean, or join a group practice, or even work for a hospital system.
The problem with all the above options are they do not work for the independent minded docs. I did not go into medicine to work for someone else. I went into medicine for the independence.
So I will state again, the days of private practice in a third-party dominated system are just about over.
But......
You can still get out of the third party system, make your office lean and efficient, and work directly with your patients. Work for a single payer system, where the single payer is the patient.
I have been away for awhile, concentrating on other issues. My practice is slowly growing, while my office expenses are slowly being whittled down further. It is amazing at all the fluff offices spend on, that we really do not need.
Start thinking like a businessperson, and remember the customer is always right in a business transaction, not a healthcare decision. Cater to individuals, and prove you are worthy of more than a $10 copay.
There will end up being a two-tiered system this decade. It will consist of the government run large practices and hospital systems, with all their largesse and accompanying overhead, overcrowding, and long waits.
And there will be the remaining independent practices, who cater to no one but their patients. Independent practices that offer cost effective quality care in a timely manner.
So everyone, make your decision , and live with it. Otherwise stop complaining about Obamacare and either get on board, or jump off like I did, and chart your own course!!
I would post more on this blog, if I got any feedback or comments. I do not feel like anyone is listening so the posts have trickled.
BTW, I started a new blog, Healthscare101blog, which can be found here. Let me know what you think.
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