It’s a business! There it’s been said. Now let’s get on with the process of treating it like a business.
For 35 years I’ve been involved with the health care industry and for 34 of those 35 years I never heard the words business and medicine used in the same sentence. Understandably no one wants to deny health care because a person does not have the means to pay for it. Clearly when all else fails we must still do the right thing: provide health care to those who need it. And within the last year the government is attempting to see that fact to reality with the help of the private sector. Of course the jury is still out on how this will play out, but regardless, there are significant changes coming down the road.
But what seemingly has historically been ignored has been ensuring that medical/health care facilities make money! Yes there are non-profit and free clinic models whereby that will never happen and they are necessary. But this country’s private practices deliver 80% of our health care and they need to make sure they can sustain themselves economically. In the past 20 plus years that was not as difficult as today given that reimbursements were better, labor costs were lower and patient share of the health care cost was low or non-existent. But times have changed dramatically and therefore the practice of managing medicine needs to change, and in my opinion that has not happened.
According to Health Care Financial Experts the HCFMA (Health Care Financial Management Association) and health care consultants today medical practices are faced with the following ABSOLUTE irrefutable facts!
• Reimbursements are dropping every year and that will not change! Experts say 3-4% per year.
• Labor and benefit costs continue to climb. Experts say at least 2-3% per year.
• The share which patients are responsible for is climbing rapidly thru higher deductibles, co-pays, etc. This means collections are more complicated.
As anyone can see, the negative impact on practice revenue is significant, and continues to grow. This calls for practices to re-evaluate their business operations and put into place changes that will allow them to stay profitable, and more importantly INDEPENDENT. If we look at other industries, many faced similar problems as those facing health care today. And those companies within those industries that embraced change are the ones that survived. As unpopular as some of those decisions might have been, they allowed these companies to stay independent and, in fact, prosper and compete in the global economy.
This same mindset needs to be applied to health care with respect to change. In my opinion the changes we are talking about are not in fact that radical and they will allow doctors to remain independent and practice medicine … but they must be done soon. First whatever jobs you have in your practice that are not your CORE competency should be outsourced immediately. Frankly, all non-clinical areas should be evaluated for outsourcing so you can focus on what you do best: being a doctor! This means looking at your administrative functions such as payroll, HR, marketing, supplies, and last but not least, the billing function.
Collecting money is today by far the most critical function in a medical practice’s “business,” right BEHIND the clinical side of providing needed health care. As stated above reimbursements are declining, labor costs are going up and last, but increasingly more prevalent, patient costs are going up via higher deductibles and co-pays. Then when you consider that insurance companies have a vested interest in holding onto their money, you have the challenge of doing battle with a room full of college graduates looking at modifying the rules or adding additional conditions on how you, the doctor, get paid. Make no mistake about it, the battle of getting paid is only going to get tougher. This is why, like payroll, HR and other areas of the practice, it makes sense to consider how outsourcing your billing will benefit you. CRT has invested in substantial medical billing services and billing follow-up technology; over a million dollars in the last 6 years alone, as well as the hiring of highly educated and experienced management to run billing operations. Our core competency is medical billing and EMR. That is all we do 24/7 and we have been doing it for over 30 years.