Physician Business Ideas - Straight Talk about Physician Practices

John McDaniel, 57 year old president of a physician practice management company, called the other day from New Orleans to talk about the lay of the health care landscape.

John’s company, Peak Performance Physicians, manages physician groups throughout the country. He is a former hospital CEO and has been in the physician practice management business for about two decades.

John talks straight. Indeed, I would call him a pragmatic fundamentalist who does not sugarcoat issues facing physicians, such as flat or dropping incomes weak cash flow, physician shortages, overcrowded schedules, and pay cuts from the 3Ms – Medicare, Medicaid, and Managed Care.

Among other things, John says,

• Many physicians are dropping out of HMOs and PPOs that offer low rates of reimbursement. One of the most commonly dropped plans is UnitedHealth, though this is tough where United has dominant market share. John cited one physician, a neurologist, who has withdrawn from 16 plans.

• To bolster cash flow and decrease accounts receivable, more and more physicians are asking for payment before the patient leaves the office. This may account for as much as 20% to 25% of revenues.

• Only 25% of the groups he manages or consults with have installed EMRs. These groups await better and less expensive systems with a tangible return on investment.

• Young doctors are increasingly turning to hospitals to help them get started in practice. Given their educational debts and costs of starting a practice, there is simply no other way to establish themselves.

• The influx of women doctors into medical practice is altering traditional thinking about how many doctors we need. He cited the case of a 12 woman obstetrical practice in which each partner worked a three day week. He pointed out that was the equivalent of a full-time four person group.

• As many as 75% to 80% of doctors undercode because they fear a federal audit. John says this is too bad because an annual audit would quickly reveal undercoding, and corrective coding would greatly increase revenue for most practices.

• John says the American public will never be sympathetic with doctors who complain of low reimbursement from Medicare, Medicaid, and managed care. To the public, most doctors are wealthy, and no amount of moaning, groaning, or whimpering will correct that misperception. What people understands is lack of access. If enough doctors restrict access and can justify that restriction, the public and the politicians will come around.