Get Ready for Managed Care

by Keith Borglum

8 Things To Do Now to Get Ready For Managed Care

1) Form or Join Groups There is power in numbers for many reasons. You can amortize more costs, afford better management, spread risk, dominate your market, increase hours of availability, attract payor contracts, etc.. The group you are in doesn't have to be a large multispecialty group either. One of the most efficient types of groups is a 5 physician single specialty, with many benefits over smaller and larger sizes. Extra clout can be gained by networking with others of the same specialty or multi specialties. For many physicians, being in a group or network will be a requirement for survival in the next few years.

2) Audit and Control Costs With decreased reimbursement, increased sophistication is needed in respect to managing expenses. Thinner profit margins require more active attention to ensure that those profits don't slip into losses unobserved. You need to know individual and comparative baselines for every category of expense in your specialty. Without knowing your costs you won't know when to say yes or no to contracts or offers. Do an expense audit and a specialty comparison study and prepare a budget today.

3) Know Your Numbers You need to follow your practice vital signs as closely as you would the clinical vital signs of an obese, hypertensive, insulin dependent diabetic. You should perform the equivalent of a complete history and physical on your practice to determine your statistics per payor contract, per procedure, per patient encounter, per referral, per referrer and per staff person, and in comparison to others in your specialty. Without proper data tracking problems may be caught too late to prevent losses or catastrophe.

4) See More Patients The future of managed care is in providing appropriate care to a larger volume of patients at less reimbursement per patient. Compare yourself to the national statistics for ambulatory encounters in your specialty. If you are not at the 65th percentile at least, you will not pass the managed care test.

5) Begin Tracking Outcomes It's the wave of the future in securing and retaining contracts. There are a number of studies in progress you can inexpensively join.

6) Specialist Involvement It is estimated that 50% or more of specialists will have inadequate patient volume to maintain a practice. If you are a specialist, aggressive action is required now to maintain your practice. Figure out how many of your specialty will be needed in your area and do what is necessary to be one of those who survive.

7) Educate and Bonus Your Staff Financial incentives work wonders when properly structured. Invest in your staff's education to give them the tools to perform. Any staff person you would not rehire should be appropriately fired. Share practice statistics and goals and start weekly in-service training for teamwork and system improvement.

8) Educate Yourself Don't be a "rebel without a clue". Begin a self imposed "fellowship" in managed care survival techniques. There is a lot to learn very quickly. Consider bringing in a consultant to perform a Practice Survey to get you started.

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.