Are pediatricians all going poor because they can’t negotiate with MCO’s?

By Chip Hart & Brandon Betancourt

by dmason

I always find it amusing when parents call our office suggesting that their kids got sick as a result of coming to our office. “…we came in with little Timmy for his 12-month check-up and he was fine. The next day, he was crabby, with a cough and runny nose. I think he got sick while waiting in your waiting room!”

“Oh, yes, you were the couple that came in with Timmy in that sterile bubble and you only took him out once you got here… I remember now.”

“What’s that?”

“Nah! They clean those toys so well at the daycare; I doubt germs got passed from kid to kid either.”

I don’t actually respond like that (out loud), but I wish I could.

Funny thing is that pediatricians, and those that work for them, often do the same as parents who blame the doctor’s office for their children’s illness (not to say it is impossible for children to get a virus at the doc’s office). Except docs blame manage care organizations and not being able to negotiate better payments for providing care. Consequently they are loosing money or going out of business.

I’m willing to bet that the inability of pediatricians to negotiate with insurance companies is only part of the reason many of them are going out of business or loosing money.

Being a good pediatrician – hell, having a medical degree – does not guarantee financial success. The fact is that the overwhelming majority of pediatricians are BAD business people and horrible at maximizing their revenue and efficiency.

Most practices that are unsuccessful did more than just negotiate poorly.  Most likely they were far from the best run practice among us.  I’ll bet that they simply weren’t willing or able to understand other changes they could have made to stay open.

While negotiating better contracts might save some practices, there are behavioral changes and/or better coding and pricing that can easily render an extra $100,000/year in a typical 3-4 doctor practice, all this without negotiating a thing.  So can focusing on well visits, adding visit hours, understanding E&M distribution, productive patient materials, etc.

Every single pediatric practice has something they can improve – negotiating is a big one, but rarely is it the only thing. Most of the money a practice loses happens in the exam room, not at the negotiating table.

The days when “being a good doctor” meant that you no longer had to worry about being a business owner or improve your own behavior are long over.  The might not have ever even been real.

Fear of change, or the inability to manage change, are the biggest problems in pediatric offices…not the MCOs.  As bad, evil (or, at best, amoral) as they are, you can still play their games and put plenty of food on the table most of the time.

Chip Hart is the Director of PCC’s Pediatric Solutions consulting group and author of the popular blog Confessions of a Pediatric Practice Consultant.

1 thought on “Are pediatricians all going poor because they can’t negotiate with MCO’s?”

  1. A genius!

    Actually, I got 2/3s of the way through it before I realized I’d read it before 🙂

    Since the original form of this outburst appeared on SOAPM, I’ve been in at least 3 more offices who only support my belief. MCO contracts an issue? Yes. Inability manage their own behavior? Yes+. United Health Care isn’t responsible for the 85% 99213 rate…

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