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“The Business Side of Medicine”. Cliff Park March 8, 2012. What? What are you talking about? I didn’t go into medicine so that I would have to run a business?. OB GYN recruited to a rural community in the mid 90’s.

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what what are you talking about i didn t go into medicine so that i would have to run a business
What? What are you talking about? I didn’t go into medicine so that I would have to run a business?

OB GYN recruited to a rural community in the mid 90’s.

Research has found that fewer than half of graduating medical students in the U.S. receives adequate training to understand healthcare system strategic approach and the economics of practicing medicine.

In a recent article in the New England Journal of Medicine two University of Michigan physicians recommended that healthcare policy be added to Medical School Curriculum.

slide3

“Historically, medicine has been considered a learned profession where an ethical code of conduct takes precedence over economic considerations. While in theory this view remains intact, the reality of decreasing reimbursement rates and increasing operating costs is forcing physicians to realize that, like it or not, there is a business side of medicine.

Medical training does little to prepare young doctors for the harsh reality that their ability to practice medicine may hinge upon their ability to successfully manage a business.”

--Carol A. Schwab, University of Tennessee

practice start up considerations
Practice Start-Up Considerations

Answers: You do everything before you start

Questions: Who does what by when?

  • Practice Start-Up Checklist
what does it take to get it done
What does it take to get it done?

Setting up a practice

Legal business entity

considerations

A successful business begins with

a business plan — a detailed road

map for taking the business from a

dream to a successful reality.

  • Practice description
  • Services
  • Marketing
  • Operational plan
  • Management and organization
  • Expenses
  • Personal financial statement
  • Financial plan

There are four basic forms of doing

business:

  • Sole proprietorship,
  • Partnership,
  • Limited liability company; and
  • Corporation.

Reimbursement

Physician-Hospital Relationship

Joining an Existing Practice

Legal Issues

Anti-Fraud Laws

  • Anti-Kickback statute
  • Civil False Claims Act
  • Stark Laws
one aspect at a glance
One aspect at a glance

Records management

  • Filing Equipment
  • Filing Supplies
  • Filing Systems
  • The Filing Process
  • Inactive and Closed File Storage
  • Medical Law and Ethics
  • The Patient-Physician Contract
  • Preventing Lawsuits
  • Federal Legislation Affecting Health Care
  • OSHA Regulations
  • Quality Control and Assurance
  • HIPAA
  • Confidentiality Issues and Mandatory Disclosure
  • Code of Ethics
  • Labor and Employment Laws
  • Legal Medical Practice Models
slide10
Why should I even try to own my own practice? Wouldn’t it be easier to simply get a job as an employed physician?
benefits of employment
Benefits of Employment

Pro’s and Con’s of employment

(As perceived by physicians)

  • You report to a management professional who should understand the business and be supportive of your well-founded recommendations.
  • You will receive support from other hospital departments: the Human Resources department will screen, orient and provide benefit support to your staff; the Information Systems department will provide and maintain your practice management system, EMR system and other hardware and software; and the Accounting department will pay the bills and write the payroll.
  • You will likely be in a more stable environment without the challenges of the ups and downs that come with collection processes in a private practice.
  • You will get to interact with managers of other departments and broaden your hospital knowledge and understanding of the care continuum.
  • You can learn a great deal from those who have already been there and done that!
drawbacks of employment
Drawbacks of Employment
  • Hospitals use different terminology for charges, adjustments and receipts and work on the accrual system instead of the cash system, which most private practices use.  It takes time to understand and distinguishes the terminology and process differences.
  • You are a small fish in a big pond and will likely have significantly less influence in the “system” as compared to being in a private practice.
  • You can expect to have much less autonomy in a hospital system and there may be more red tape involved in getting even simple requests filled.
  • Hospital administration may find it difficult to relate to the perspective of the hourly staff and it could be frustrating to balance the needs of the staff and the needs of the organization.
  • Because the hospital is the big-dollar earner, the needs of the clinics may be second, third or fourth down the line in importance.
benefits of managing private practice
Benefits of Managing Private Practice

Pro’s and Con’s of private practice

(As perceived by physicians)

  • You get to do everything, so if you like or want to learn about HR, marketing, finance, IT, contract negotiation, revenue cycle management, facility management, and lots of other stuff, you’ll get to do it in a private practice.
  • You are the top position in the practice, so you get to put your imprint on the practice.  You can often be more creative.
  • Physicians can be very laid-back and practices can maintain a more relaxed, family-like atmosphere.
  • Decision-making can be straightforward and swift, so you can help your practice to be nimble in response to news events, trends and new ideas. If your practice decides to become a concierge practice or stop or start taking a particular payer, so be it!
  • You may find it easier to get a foot in the door and start your management career in a private practice as physicians don’t always hire managers using traditional means.  A recommendation from another manager, a consultant or a physician may be enough to get you started.
drawbacks of managing private practice
Drawbacks of Managing Private Practice
  • You report to the physicians who may not have business expertise and may fight you on your well-founded recommendations.
  • There is no internal career path – you’re at the top in the practice.
  • Physicians will make less money every time a new non-revenue generating position is added or any time equipment needs to be replaced – expect them to be generally slow to respond to capital expenditure needs, especially if they cannot see that any new revenue will come from the expense.
  • When physicians “eat what they kill”, taking home the dollars they personally earn less their expenses, they can be pitted against each other and have conflicting priorities.
  • Your practice could be purchased by a hospital and you could find yourself out of a job, or your job radically changed.
so what if i m employed what are some of the strategies i should use to get hired
So what if I’m employed?What are some of the strategies I should use to get hired?
  • What will they accept?
  • How can I position myself for the opportunity? How do I compete?
making sure you take the right position
Making sure you take the right position:
  • Remember that a job, any job, is a vessel to place you where the Lord would have you!