One of the things that I’ve noticed working in all these different places, is that each company I’ve worked with, has a sentence that starts like this, if only….

The grocery business talks about margins. If only our margins were better, we could really start to do things. If only we could have a floor display next to Coke, we could really sell this SuperBowl weekend. The airline business is all about fuel cost. If only fuel cost didn’t rise, we’d be better off.

In healthcare, we have tons of if only… if only insurance companies would pay us enough, we could be happier. If only we could negotiate better rates, things would be different. If only we could make money on vaccines, I could practice medicine the way I want. If only we could do procedures like ortho pods, I wouldn’t have to see 35 patients a day.

Here is the thing, the grocery business will always have low margins. Airlines are going to have fuel cost issue no matter what. Insurance companies will continue to take advantage of primary care and try to pay as little as they can get away with. And the likelihood pediatricians will start to do procedures is also slim.

So what should we do? How should we go about? What is the alternative?

What if we embraced our if only… and use it as a starting point to develop a strategy? What if we stopped ( ’cause I’m a perpetrator of the if only too from time to time) using the “if only” as an excuse as to why we can’t succeed and instead use it as a catalyst to find a way around it despite the challenges.

For example, grocery businesses like Whole Foods and Trader Joe’s understand that margins are low in the grocery business. Thus they’ve embraced this reality and developed a concept that bring in higher margins.

Whole Foods brings their organic, market food feel while Trader Joes focuses on items we normally don’t see in the traditional stores. Another example is SouthWest Airlines. As a result of high fuel cost, the airline has developed an infamous fuel hedging program that has become part of their competitive advantage.

What can we learn from Trader Joe’s and SouthWest Airline?

Pediatrics is also a high volume low margin business. That is why it is important to scrutinize every expense, and code for every dollar worked. Because margins are low, we have to make sure every doctor is coding appropriately. Because volume is high, we have to tirelessly find ways to become more effective and our staff has to become more efficient. Because patients have high deductible plans, we have to ask for credit cards to be placed on file so we don’t continue to increase our A/R every year.

Because insurance companies want to pay as little as possible, we have to make it part of our strategy to stay on top of these issues.

Now, I’m not suggesting to give up on fighting for better rates from the insurance company or conforming to the possibility that you will only have to see 40 patients a day to make ends meet. I’m not talking about giving up. I am talking about using some of these hurdles as ways to redefine our businesses like SouthWest and Whole Foods have.

A perfect example of this in our office was this notion of asking people to leave a credit card on file for accounts that are more than 90 days delinquent. This policy came as a result of higher deductible plans and the economic downturn in the US.

I could have used the higher deductible plans, thus higher A/R as an excuse. If only people didn’t have high deductible plans, we would be better off. Instead, I realized that the higher deductible plans and economic downturn is the way it is going to be. Thus, I needed to embrace this reality and use it in a way that will help me develop a strategy or policy that will help me overcome this issue.

Stop using the only if as an excuse and start using as an ingredient for success in your practice.

In a study conducted by Kenneth Kovach of George Mason University, 1,000 employees and 100 of their bosses were asked to list things that they believe motivated employees.  Bosses thought employees would be motivated by good wages job security, while employees listed factors such as participating in interesting work, feeling appreciated at work and “being in on things.” They ranked job security and good wages as important but lower on the list.

Motivators are the internal elements that impact staff. Those include achievements, recognition, growth of advancement, responsibility and the work itself.

Next time you meet with employees individually, considering delegating to employees not just a portion of the taks but the complete unit of work. Or assing specific or specialzed tasks to individuals, enabling them to become experts. You may also think about increasing individuals’ accountability for their own work or redisigning job functions to promote achievement and responsibility.

These efforts on simple, but they will make your medical practice a more rewarding place to work – for everybody.

Now that it’s more common for physicians to blog and use social media, some of the posts I find most intriguing list the top items that pediatricians wish parents understood. Today I’d like to offer a twist on that format. As a healthcare writer and a parent, here’s my list of what I look for in a pediatrician’s office, presented as simple “do’s” and don’ts”:

DO train all staff members who are going to interact with my child to introduce him- or herself to the patient by name.

I realize that if you’re about to jab my four-year old with several needles, it might be preferable to make a quick, untraceable getaway. But a brief, “Hi, Bobby, my name is Donna, and I’m going to give you a couple vaccines today” will buy you more trust upfront and help the process go smoother, both in the office and after we get home. Trust me, by the time we get to the car, “Donna with the green lollipops” will be a rock star in my child’s memory.

DON’T speak to me, the parent, as though I’m a child.

As a mom, I understand the force of habit to speak in a sing-songy manner and describe cause and effect at a three-year-old’s comprehension level. But my husband doesn’t like it when I talk to him like this, and I don’t appreciate it when a doctor or teacher (possibly worse offenders) does it to me.

However, DO, by all means, assume my memory and/or ability to concentrate is diminished compared to a nonparent.

If I have a baby, I’m likely sleep-deprived and may not retain the information perfectly. If my child is fussy or I’ve got more than one with me, much of my attention is focused on keeping them quiet, ironically enough, so that I can listen to you. Avoid my confused phone calls later by providing written take-home instructions whenever possible. To all of your materials, consider adding a “what if” section. “What if” my child throws up some or all of this medication? “What if” he still hasn’t pooped by New Year’s? “What if” my mother-in-law insists that the remedies of her generation are worth a try? (And, yes, I will show her the document if necessary.)

DO educate with sensitivity.

I’ve talked to a lot of moms about this: The first several appointments with a new baby feel more like an examination of our parenting than our baby’s health. Flat head? Mom isn’t doing enough tummy time. Still not sleeping through the night? Our bedtime routine isn’t soothing enough. Eating poorly? We must be doing something wrong. Now, I absolutely don’t believe pediatricians really insinuate any wrongdoing at all when educating us about how to do things better. But in our sleep-deprived, want-to-be-the-greatest-mom-ever, slightly paranoid/obsessed state, we’re already our own harshest critics. You may need to try harder than you think to reassure new parents you’re a partner, not a judge.

Therefore, DO compliment us on at least one thing we’re doing right at every visit.

It doesn’t have to be anything major to give a big boost to our day.

That said, DON’T be afraid to share a laugh.

The day my pediatrician won me over completely was the checkup when I was describing that my newborn daughter had a bowel movement only every two to three days, resulting in a blowout reaching her armpits. When I went on to describe that every time, it looked as though she had fallen, clothes and all, into a bucket of poop-colored paint, the doctor laughed out loud, even snorted a little. Standing there in her stethoscope and white coat, she took a second to compose herself before explaining that her pattern would even out and/or my little girl would “grow into” her poops. I wasn’t there trying to make jokes, but express an honest (albeit detailed) concern. The doctor’s very human reaction at that time was just what I needed, and certainly helped create rapport.

DO help me out when I have my hands full.

With two children just 13 months apart, I find it especially irksome for anyone (anywhere) to comment on how full my hands are—without doing anything about it. The receptionist at my pediatrician’s office was the first person to have the forethought to hold a credit card slip still for me so I could sign it while juggling two toddlers and all the stuff that travels with them. The medical assistant has pushed the stroller for me, and other staff have held open doors. For this, they’ve earned my undying appreciation.

So, you see, it doesn’t have to cost a lot of time or money to create a loyal patient who will recommend you eagerly to all of her friends. When we’re trusting you with the health of the people who matter to us most, a little common sense and compassion in return go a very long way.

Deb Beaulieu is a Boston-area freelance writer and editor who covers physician practice management topics for the Massachusetts Medical Society and FiercePracticeManagement. Learn more about Deb’s work or contact her at www.debbeaulieu.blogspot.com.

But there are other reasons why measuring sick to well ratios are beneficial to your practice. Practice Management extraodinaire Chip Hart from PCC has some really good reasons as to why measuring this number is good for your practice. Chip says that “with the massive fluctuations in sick visit demand (look at the 2010 flu season and look at now), consistent well visit placement is crucial to business stability.” Chip also adds that well visits establish a practice’s value more than runny noses and sore throats. “It’s a chance to really get to talk about what YOU want while also listening to the parents. It’s a doctors chance to look at the whole health of the child, not just fix an acute problem which, most of the time, common sense fixes anyway.”

To calculate your wellness-to-sick ratio, divide total sick visits by total well visits (both new and established patients). Some offices remove the 99211 from the calculations and only use 99212 thru 99215 as well as the new patient codes.

To give you perspective, the national average in 2010 is 2.06. In other words, nationally, practices see 2.06 visits for every 1 well-child visit. Better performing pediatric practices rate between 1.9 and 1.6 sick visits for every 1 well visit.

Of course every practice is not the same and the numbers will most likely be different. But experts say that if your practice is within the 3:1 or 4:1 range, your practice is heavily focused on acute visits; which can lead to difficulty in making ends meet.

Just remember that the benchmark is designed to give you a rough idea. Ideally, you should calculate your ratio as far back as you can, compare it year over year to determine how your practice is doing, and use those numbers as a benchmark.

Fundamentally, measuring your sick to well ratio (and improving them) will not only give  your practice a stronger financial footing, but the practice will enhance the healthcare needs of your community by being more proactive with prevention wellness.

Related articles

• 10 Practice Management Reports That you Haven’t Thought Of. (pediatricinc.com)
• My Child Has a Cold, Should I take Her the ER, Urgent Care or the Pediatrician? (survivorpediatrics.wordpress.com)
• Insurance Contract Negotiations: 15 Tips From a Pro (pediatricinc.com)

PCC’s theme for the conference was “Change” so I decided to title the talk 101 ways to transform your practice and expand the post I was working on into an hour talk. But I also wanted to do something different with my slides.

When I go to conferences, I usually ignore people’s slides. Why? Because most people use their slides as a teleprompter. Second, I usually can’t read and listen at the same time so I prefer to listen (surprisingly, I can text, read and respond to email while listening although my wife doesn’t agree).

I also ignore slides because they add little value 3 or 4 weeks after the presentation. Most of them are full of bullet points with half sentences and they usually don’t have examples. Three weeks later I’m trying to remember what was that funny analogy the presenter made about handling Medicaid patients so you don’t lose your shirt but the slide only says:

• Manage Medicaid patients better.

I decided to create a workbook that would expand my hour talk with more insight and depth. I also wanted to be able to have attendees have something to take with them that was comprehensible 3-weeks or even 12-months after my talk.

I created my slides and I also created a workbook that went a little more in depth and provided some context to my talk that we distributed to the attendees.

After the talk, I decided to make the workbook into an e-book and put the e-book up on the blog for giggles. I knew the e-book wasn’t perfect. There were grammatical errors, several typos and a few formatting issues. But I ran with it. I told myself, if I waited for it to be perfect, I would never put it up.

Besides, any edit job would take a while considering I wrote 101 different things. It was good enough I thought.

As it turned out, a lot of people wanted the e-book. More than I expected. Which is a great of course. But the typos, grammar and formatting bothered me the more people requested it. I decided to have the e-book edited by a professional and adjust a few formatting issues. It is now up to standards!

So, to make a long story a little longer, I’m happy to let readers know that I have an improved, updated version of the e-book.

If you want the improved edited version, I’d be happy to send you the updated one. Even if you already have one. Just send me a note by going here.

Here is the catch though.

You have to share it with at least one person. No, I’m not asking you to start a chain letter. Just share it with other doctors and practice managers that you know.

And the second request I have is for you to consider signing up to receive updates every time I post a new post on the site. If you are not a subscriber, then visit the email subscription section of the blog.

Hope you enjoy it.

Now it all makes sense.

Enjoy!

The real benefit of an EMR isn’t being able to put data in/chart faster – this is great if you can do it but not everyone can point/click/type faster than they can check boxes–

…the real benefit of an EMR is getting practice-wide data quickly OUT of it.

When docs test drive EMRs, they want to see “How do I put in the vitals?  How do I issue an Rx?”  As far as getting data out, they want to see patient-specific, single-patient data: “Show me the kid’s growth chart.”  “Show me their pattern of no-shows.”

But the real ROI is learning how to get data OUT – report writing and so on.  Most docs never learn this, or expect the administrator to do it all.

I’ve posted on SOAPM before about how we found $3K/month in lost revenue in labs we weren’t billing for by cross-checking the number of, say, strep tests documented in the chart vs 87880’s billed for – at a cost of $100/month.   Is $3K/month a huge cash cow? Nope, but it’s something we wouldn’t have had otherwise.

We get another perhaps $1000/month for running reminders on missed E&M, 99050, etc.  and we already run a pretty tight ship.  Other practices have found similar results from cross-checking vaccines, etc.

By reporting on how many different days I saw kids at our local hospital (place of service 21 or 22) I can give our practice’s accountant a nice list of work-related mileage from our office to the hospital.  This is maybe $500/yr in tax savings for me and my husband.  Is this ginormous? Nope, but since the report is already there and it takes 2 minutes to run and print, $500 earned in 2 minutes work is pretty good.

Having the computer do the various annual reports that are required of the various programs we participate in saves my nurse administrator time.  How many VFC vaccines from a certain lot did we give between date A and date B to self-pay vs. Medicaid patients? How many H1N1 vaccines did we give during a period?  Point, click, print, fax, move on.  No hand tabulating.  No adding up long columns of numbers by hand.

There’s a new Framitz machine that’s now CLIA-waived!  It’s on sale, $5000, and the cost per test is $3.  Insurance reimbursement is $8.   Is it worth it? Depends on how many Framitz tests we sent out last year — and with a couple clicks, I can see what the ROI on a new Framitz machine would be.

I don’ t expect everyone to be the data mining geek that I am – but I posit that you will never reap the rewards of an EMR if you don’t know how to get practice-wide data intelligently OUT of it.

And that’s the trouble with spending a lot of time on scanning old data into the EMR – it’s clunky and time consuming, and you have to do it, but the data you’re putting in can’t be extracted in any meaningful way (unless you are doing some really awesome indexing) to do the cool things I’m talking about.

I have done the contract negotiations for my practice for 20+ years. In those dark ages, before Internet and AAP resources, there was no primer for doing this. One of my partners recently asked how she could get up to speed on this, looking to the point where I might retire – which is not anytime soon. So I started thinking about a few essential points to have in contracts. You may not be able to get all of them, but they are all worth fighting for.

1. Do a payer analysis so you know ahead of time what % of your practice income comes from each payer and what each payer is paying you for the major E/M codes. This means learn spreadsheet 101 software. Sometimes you need to be prepared to tell a company their offer is not acceptable and walk away. You need to know ahead of time what this may cost you. You also need to know whether you are the only pediatrician for 30 miles or whether there are 3 other practices within 5 miles who would be happy to snap up your cast offs.
2. Become familiar with RVU valuations. AAP book Coding for Pediatrics issued yearly is an excellent resource for this.
3. Ask for fee schedules based on a percentage of a given years Medicare, rather than just “we will pay you $x for code y. If you are lucky enough to get them to agree to basing the fee schedule on the current year, be aware that Congress is still playing with something called the SGR, which, if not fixed, may cut payments from Medicare by 30%. Fee schedules based on prior years Medicare are fixed in stone at this point.
4. Know your area. There are parts of the country where simply getting 100% of Medicare is considered good. There are other parts of the country with rates as high as double that.
5. Try to get a concession that they will follow CPT coding guidelines. I have been unable to get this in any contracts. But by bringing it up, it opens the door to specific discussions of paying for –25 modifiers for well and sick care on the same day, and bringing up what services are or are not bundled into well care, such as vision, hearing and developmental evaluations and after hours care.
6. If in office lab is a big part of what you do, insure that what you are paid doesn’t lose money. You can always threaten to send every kid who needs a specific test to the hospital if they don’t at least meet your cost.
7. VACCINES: know you costs, know your overhead and make sure that you are paid appropriately. These are almost always carved out of every contract and can cost you tons of money. Inscos often try to pay less than your acquisition cost for vaccines. Try to get payment based on the CDC price list. http://www.cdc.gov/vaccines/programs/vfc/cdc-vac-price-list.htm. Also check out the AAP information on the Business Case for Vaccine pricing. This one piece of the contract can make or break you.
8. Try to avoid forever renewing contracts. A good price today is going to look pretty poor in 5 years when it hasn’t changed. 2 years is a reasonable amount of time so you are not forever negotiating.
9. It takes 6 months to negotiate a contract and they are almost always completed after the actual termination date. Stall is the name of the game for inscos.
10. When you agree on a contract, make sure the contract they send you to sign is actually the one you agreed to. All the companies have boiler plate contracts. I have had a company agree to give me specific terms, but the contract sent to me was 3 or 4 drafts prior to what we agreed upon. I was told this was an “oversight”.
11. Once you agree on the big things, like payment for E/M codes, don’t forget the little things. Will they pay for after hours care and in office labs are the main things here. If they don’t pay for a specific service, do they consider it “bundled” which means you can not charge the patient, or do they consider it “not covered” which means you can bill the patient.
12. Not that I don’t trust people, but once you sign a contract, look at the EOBs that come in and make sure that they are really paying you what they said they would pay you. You’d be surprised how often the insco computers load the “wrong” fee schedule by “accident”.
13. You may not win even if you think you won. A comeback offer from an insco may take the form, “We will give you 10% more on E/M codes, but pay you 5% less on vaccines.” You have to be able to know that this 2nd offer may actually pay you less than the first. It can only help you in negotiating when you come back to them with something to the effect of how disappointed you are that they think you are so naïve, so how about a real offer, not a trick offer. Know what they mean by “E/M codes”. In my experience, they mean only Office Visit and Preventive Care codes. And even though all the other common codes for hospital care, newborn care, in office counseling, etc. are in the E/M section of the CPT book, they usually are not included in the insco definition of E/M.
14. Know a ballpark minimum offer that you simply can not go below. If you don’t get it, WALK AWAY. This is the hardest thing to do. But if you are losing money on a payment schedule, you can’t make that up by doing more volume.
15. Start your 1st negotiation with a payer who is rather MINOR in your income. This way you can learn, get your feet wet, and mistakes (which I still make) are not so costly. Save the big payer negotiations for after you have gotten some experience.

This is a starting place. I’m sure others on this listserve will be happy to offer more critical points that I have over looked. And some of these items can be rather daunting. It can take a while to get proficient at Excel. If you have a spreadsheet wiz in the office, it might be reasonable to delegate this part of the task. And getting the Medicare fee payments for the common codes that you do may be somewhat hard if you are not good at Excel. The AAP and Chip Hart on this listserve have good sources of information about common CPT codes and their valuation.

My short answer is, go for it! My long answer is, well, more complicated.

First, I think it is important to assess one’s priorities and determine the true motivation for opening up the practice. Motivation – or the reason why – is very important because if one opens the clinic for the wrong reasons, failure is often the consequence.

Here is why… during the journey of opening one’s own medical practice, one will no doubt be challenged, get burned out and perhaps even question if this was the right thing to do or ask yourself if this is even worth it. If one’s motivation is fragile and things get tough, the likelihood one will preserver through it will be more difficult.

Thus, in our experience, the motivation has to be more than money, be your own boss or just to say you have your “own” practice.

So the question for me isn’t whether the conditions are right to open up a practice, but rather, do you have the right motivation to open up a practice in this environment. Because what one selects as the reason is what will give you the strength to forge ahead regardless of good or bad times.

Once you’ve settled that, then you can move on.

I jotted down these 12 points regarding opening up a practice. They aren’t really advice or tips per se, but more my thoughts. Here we go:

1.  First thing first… join SOAPM. What is SOAPM? Glad you asked. Go here and here to find out.
2. Location, location, location. Just like any other business, location is very important. Research the area. Figure out the type of “patient mix”, demographics, access and all those great things that make a great location. Tip: Census data can help you get started with this research.
3. Understand that working for yourself is going to be more stressful and more difficult than working for someone else. Why? Because the buck stops with you.
4. Although the work is more stressful and probably work more than you’ve ever worked in your life, the personal and professional rewards will be much greater than you’ve ever experienced (and potentially even greater financially).
5. Understand that the practice is a “business” just like anything else. What that means is that at the end of the day, more money has to come in than go out. Don’t forget that because you can’t help people in need if you are in need.
6. As soon as you can, hire a real business manager.
7. Be prepared to make sacrifices. For example, sacrifice time with your family.
8. I’d recommend finding “consultants” to help you get things in order. They will cost you money but it is a good investment. Also, find people to handle your hospital and insurance company credentialing process.
9. Try to find other “solo” physicians in the area that you can share the on call schedule with you. Otherwise be prepared to work 24/7 until you find another doc.
10. Although it is expensive, start the practice with a good EMR and a very good Practice Management software. Thanks to Obama, there is an opportunity to get financial help with this expense.
11. Join a physician buying group ASAP. This will help you offset one of the largest expenses in a pediatric office (i.e., vaccines). Group Purchasing Groups will also help you get discounts on other items.
12. Remember, if failure is not an option, either is success.

This list is not comprehensive. There are many, many more things to consider. But I figure it is enough to get you thinking about a few things before you begin the process.

The AAP also has some resources in this area: For example, Practice Management Consultant

For those that started a practice recently, what advice, tips or pearls of wisdom would you give someone that was starting today? 

In case you missed them, here are the top 10 post for 2011.

1. Is Your Front Desk a Command Center?
2. Top 11 Pediatric Facebook Pages
3. Patient Collection Letters, What is Your Approach?
4. Medical Practice Advertisement
5. Tip #3, How To Save $80,000
6. How Social Media Can Transform Your Medical Practice
7. Can Costco and Your Medical Practice Have Something in Common?
8. Does Your Medical Practice Have a Problem with Bad Debt? Here is a Solution
9. Ten Hidden Cost When Implementing an EMR
10. Seven Reasons Why Medical Practices Have Yet to Adopt EMRs

The list is ranked by total traffic. Funny what people find more interesting. Usually, my top 10 are not the same. Here are some of my favorites:

1. What Can A Practice Learn from Bon Jovi?
2. 10 Practice Management Reports You Haven’t Thought of
3. Can a Medical Practice Learn from an Airline?
4. Small or Big: What is the Future of Small Private Practices
5. How Do You Approach No Shows?

Did you have any favorites you’d like to share with us? Which one did you find the most helpful? Leave a comment down below. I’d love to hear from you.