Smaller independent medical practices face a lot of challenges these days. This includes navigating the complex payer system, ever increasing regulation, and recently… unprecedented economic conditions. Dealing with all of this while continuing to deliver high quality patient care requires a new mindset and proactive strategies to protect and grow and independent medical practice. We’ll take a look at four ways that independent physician partners cannot only survive but grow during times of economic uncertainty.
Develop Subscription-Based Revenue Streams
Unless your practice is part of a much larger organization, it can be difficult to maintain margins using only a fee-for-service approach. While this model will continue to be with us in some form for the foreseeable future, other models are gaining traction and can provide a way to secure more predictable revenue streams for the medical services you provide.
Valued-based care contracts are one example. These risk sharing arrangements typically provide for payments per member per month. Of course, payment is independent of the intensity or number of services provided. Participating in an ACO and receiving bundled payments for members is another option. However, there are additional systems and compliance related costs that may reduce the profitability of these arrangements.
Depending on practice specialty and patient demographics, a number of physicians are adding concierge or subscription cash pay services to their offerings. This flat monthly fee arrangement is appealing to both physicians and patients because it reduces the hassles of insurance, copays, deductibles, and limitations on the number of visits or care provided. Cash pay upgrades and third-party financing are additional ways to facilitate higher payments for the enhanced services many patients desire.
Ancillary services related to your specialty (e.g., diagnostic imaging, lab services, or physical therapy) may increase revenue while providing your patients with added convenience and expanded services.
Leverage Technology and Third-Party Solutions
Technology and cloud-based solutions are transforming physician practice management and healthcare delivery. More and more, physician leaders are using these tools to streamline their clinical operations, improve patient care, and enhance practice profitability. The electronic health records revolution has been underway for a number of years now. These EHR tools combined with effective practice management systems, patient portals, and/or third-party billing services allow for enhanced communication between doctors and patients, improved clinical outcomes, higher patient satisfaction, earlier payments, and better financial visibility.
During the pandemic, telemedicine became a critical method for delivering continued care to patients. Post pandemic, it has emerged as a way to expand patient reach and improve efficiency in the delivery of consultative care. Combined with patient portables, many patient interactions no longer require an in-person visit and the amount of patient time in the office filling out paperwork is reduced or eliminated.
Subscribing to data analytics and population health management tools may help your team identify and manage high risk patients, who typically have chronic conditions. The results could be improved patient health and lower costs to your practice.
There are also non-clinical functions where you and your team aren’t experts or it’s just too expensive to do in-house. Revenue cycle management, payroll and HR related functions, procurement, and vendor management are the most likely candidates to outsource. The goal of outsourcing should be meaningful cost reductions and quality improvement in these non-core functions.
Create Strong Relationships
First and foremost, fostering strong patient relationships is crucial. Delivering personalized, patient-centered care not only promotes loyalty but also generates positive on-line reviews and word-of-mouth referrals. Maintaining easy-to-use lines of communication, providing convenient appointment scheduling, and employing compassionate staff all contribute to a patient-centric approach that can an independent physician group apart.
Building strong business relationships is essential for today’s physician partner. Alignments with community-based organizations and healthcare systems may enhance reputation, drive additional patient volume, and reduce overhead costs. Aligning with other practices or management service organizations may allow for this sharing of staff, resources, and infrastructure in order to reduce costs and enhance profitability.
Often overlooked, developing healthy relationships with clinical staff and administrative employees is vitally important to employee retention and patient care. By creating a supportive work environment, encouraging open communication, and investing in training, physicians can cultivate a loyal and engaged team. Recognizing and rewarding outstanding performance further strengthens these relationships. This can be accomplished in a combination of ways, including team-building events, awards and plaques, and/or monetary awards, time off, and bonus programs.
Focus on Efficiency
Forward-thinking physician leaders evaluate their operations and identify areas where expenses can be reduced without compromising the quality of care. Implementing effective inventory management systems will minimize waste and reduce overhead costs associated with medical supplies and equipment. Knowing your expense data and negotiating favorable contracts with vendors and suppliers can also lead to significant cost savings.
Flexing clinic staff schedules with patient volumes, documenting administrative processes, and using automation in place of repetitive processes can boost productivity and free up resources for patient care activities. Practice managers who incorporate the needed workflow tools and apply a little process discipline in these areas will enhance efficiency and control expenses.
Conclusion
Smaller independent medical practices can navigate uncertainty, medical complexity, and changing economics by implementing four key strategies: 1) adding value-based (subscription) revenue streams, 2) adopting technology and innovation, 3) cultivating strong relationships, and 4) focusing on cost efficiency. By tailoring these approaches, partners can dedicate more time to patient care outcomes and position their practices for long-term growth.
