Marketing Managed Care

by Keith Borglum

Family Practice Marketing and Managed Care Planning Why Bother When You Have a Full Practice?

Many Family Practices are already getting involved, like it or not, in managed care. In most areas so far that only means agreeing to accept a discount on your full fee for service . This may be through your local Preferred Provider Organization (PPO), Independent Physician Association (IPA) or Health Maintenance Organization (HMO). Full practices typically get involved to retain patients as their employers sign up with discount insurance plans to save money. Doctors have figured it is better to keep the patient at a discount rather than lose them, and they want to keep good relations with established families when plan changes are forced on them.

Practices with full patient loads have typically not marketed very much. They may do some internal marketing like having an attractive waiting room, trying to stay on time and maintaining a good bed side manner, but haven't felt the need to attract more patients. They may even have closed the practice to new patients. They figure, "Why do I need any more patients?"

The answer to that question is Clinton's Managed Competition and it's effect on the future of reimbursement. Some urban areas are already starting to experience the changes.

What is planned is what is called capitated reimbursement. That means you are compensated "per member per month" for care provided rather than fee for service. Many plans are paying around $10-$12 per member per month to the family physician. The key here is "member" rather than "patient". There are a lot of people with insurance benefits that never, or rarely, see a doctor. Under capitation, if they select you as their doctor, you get paid whether they see you or not.

In well managed plans and practices in California, where capitation is spreading quickly and some practices have a few years experience under their belts, well managed family practices are doing better with capitation than discount fee for service. In fact some practices are getting 100% to 130% of their regular fee for service!

The key to beneficial reimbursement ratios is volume, cost control and good clinical outcomes. Volume is where the marketing comes in. You want to have as many "members" in your practice as possible, even if they never need to see you. To get volume you market your practice.

There are hundreds of ways to ethically market. You just need to choose the approaches that will work for you and begin using them. It would help to focus on young, healthy members. The sick ones will come on their own or by referral as always. Under the new system you need healthy patients to subsidize the ill ones, just like under the old system the paying patient subsidized the non-paying ones.

An appropriate marketing budget in competitive medical environments is 3-5% of your targeted receipts. That means if you want to increase gross receipts by $100,000 per month, start spending $5,000 a month on marketing now in order to get there.

If you have a "full" practice, now is the time to get an associate, Family Nurse Practitioner or Physician Assistant and attract more volume. Forming or joining a group is an appropriate marketing technique with the anticipated changes. As other practices begin to understand the system better when it becomes publicized, associates and extenders will become harder to get and demand more compensation. You will also see aggressive marketing in all forms. Now is the time to get a step ahead of the competition.

Reprinted with permission from CALIFORNIA MDs BUSINESS ADVISOR.

Author Keith Borglum is a consultant and medical practice appraiser with Professional Management and Marketing, 3468 Piner Road, Santa Rosa California 95401.

Member National Association of Healthcare Consultants, Society of Medical Dental Management Consultants, American Medical Association's Doctors Advisory Network, American Academy of Family Physician's Network of Consultants, California Academy of Family Physician's Consultants on Call, and the Institute of Business Appraisers. Phone 707-546-4433 for consulting information. Permission is granted to reprint or quote any portion of this article provided that both the author and publication are named and two copies or the quoting journal are immediately mailed to the publisher.

Phone 1-800-79-CONSULT for consulting and appraisal information.

Permission is granted to reprint or quote any portion of this article provided that the author, firm, phone and city are named and two copies of the quoting journal are immediately mailed to the author at 3468 Piner Road, Santa Rosa CA 95401.