In medicine, the mention of the word profit is often viewed or interpreted as a dirty word. It is as if the word does not belong in the lexicon when health care is addressed.
I argue (in the context of the private medical practice setting) that profitability is a medical practice’s responsibility for one simple reason. If the medical practice (also known as a business) doesn’t deliver profits, health care providers are unable to provide for those in need.
Profits pay for infrastructure, technology, education and human resources, all of which translate to superior pediatric care when employed correctly.
Another way I like to put it is by saying,
…a broke doctor does do anybody any good.
Calling vs Profits
Indeed, our medical businesses differ from other companies in that we care for children. And the notion of withholding medical services or restricting access to a sick child merely by the patient’s parents inability to pay for health care services is simply not in a pediatrician’s DNA.
However, it is important to accept the reality that without a way for a doctor or the practice’s income to outpace expenses, health care providers are unable to provide services of any kind. At least not for the long term.
Is there a solution?
How do we reconcile these two competing issues? On one hand, it is necessary for a medical practice to deliver profits if it wants to remain sustainable. On the other, we have an intrinsic motivation to put the patient’s needs first.
I am glad you asked.
These two dichotomies can co-exist – and even flourish – alongside each other. There is indeed numerous tools and principles rooted in business that can help medical practices manage what otherwise appears to be opposing forces.
A Resource You Don’t Want to Miss
Today, I want to tell you about a resource I’ve been working on to help your office obtain financial success, while simultaneously providing unsurpassed pediatric care to your patients.
To help you succeed in your financial success, I’ve written a comprehensive eBook on budgeting that walks you through the process of creating a budget for your medical practice. The materials also cover basic principles necessary to put the exercise into perspective.
Budgeting is a major component of financial success. Moreover, financial success is essential to the continuity of care.
To read more about this offering, click on the image below.
I do hope that you buy the book, but more important, that you find the eBook helpful, useful and valuable.
The content was excellent, thanks to the fabulous faculty PMI brought in.
The topics varied from customer service principles to fundamental changes happening in the health insurance industry and how those changes are – or soon will be – affecting doctors’ financial bottom line.
Below are a few highlights and notable points that resonated with me.
ANCILLARY SERVICES | INCOME DIVERSIFICATION
Dr. Jeanne Marconi presented an account of how her practice diversifies income streams by incorporating ancillary services into her practice.
Admittedly Dr. Marconi’s comprehensive – almost overwhelming – plethora of services (they even offer in-house exercise training programs for children with high BMI) is probably too much for the standard practice to implement.
But for me, her talk wasn’t an invitation to follow her footsteps, but instead, provide insight into what is possible, what can be done and what is available to practices.
Dr. Marconi dished out several challenges to the physicians in the crowd. But the one that resonated with me the most was her call for pediatric practices to challenge the status quo, expand their minds, think creatively (or to use a cliche, think outside the box) and begin to think about ways to diversify practice’s revenue streams.
HOW HEALTH INSURANCE COMPANIES ARE PAYING DOCTORS
Susanne Madden arrived in Vegas with her extensive knowledge and expertise of the health insurance industry.
She presented attendees the sobering reality of how health insurance companies are adjusting, changing – even experimenting in some cases – with their models to continue delivering value to “their” shareholders. And by value, she means lower cost and higher profits.
Susanne underscored the importance of implementing quality measures such as P4P, HEIDIS, PCMH into our medical practices. But not for the reasons you might think.
While many of these health insurance programs are currently in place as rewards (e.g., enhanced or incentive payments) for medical practices that achieve quality measures thresholds in patient care, Susanne highlighted that these programs will soon become a requirement for practices.
What does this mean exactly? Insurance companies will soon stop offering enhanced payments programs to practices for achieving PCMH level III certification (or other types of incentives). Instead, they will reduce payments to doctors don’t meet PCMH certification.
As if that wasn’t bad enough, she added that many payers are evaluating providers based on how much the provider costs the company in benefits payouts.
How is that different than what they do now?
The difference is that they are not looking at the practice as a whole, but rather evaluating each provider individually.
The implications are that if you have physicians in your practice that don’t adhere to designated quality standards, payors can potentially pay each doctor in the practice different amounts.
HOW MUCH CAN WE AFFORD TO PAY AN EMPLOYED PROVIDER?
PMI’s very own Paul Vanchiere gave two of his hallmark presentations. The first one focused on customer service using the acronym KIDS (Kindness, Integrity, Dignity & Service).
His second talk was my favorite. Why? Because Paul took a complicated, MBA, executive consulting level exercise (determining how much can your practice afford to pay an employed provider) and distilled it into an easy to follow, step-by-step, process, which only requires one to understand a few financial concepts and enter value sets into a spreadsheet.
BROADEN YOUR CODE REPERTUAR
Dr. Rich Lander went over the fundamentals of proper coding. In addition to reviewing the differences between coding Level 2, 3, 4 & 5 for a sick visit, Dr. Lander stressed the importance of documenting “time” correctly in a patient’s chart.
Dr. Lander shared multiple clinical scenarios that we often encounter with patients. But some of the codes he suggested I wasn’t all too familiar with. I couldn’t recall if we used them.
So I wrote down a reminder to myself to check how well (or not) providers at Salud Pediatrics were using the full scope of codes available.
NO PRESENCE, NO INFLUENCE
Dr. John Moore – a new PMI faculty member – brought us up to speed with some of the new social media trends (Are you familiar with SnapChat and how kids are using it?)
One of the points that Dr. Moore articulated that I appreciated the most was the importance for pediatricians to embrace social media.
He said something that I’ve been saying for a long time; which is, had pediatricians adopted social media at a faster clip, the pro-vaccine vs. anti-vaccine arguments would have been balanced. Moreover, there was the potential to stifle the anti-vax movement.
CHANGE IS THE NEW STATUS QUO
You can always count on Chip Hart to deliver great wisdom and insight. Chip also gave two talks.
I’ve heard Chip speak many times, but this time, I felt his talks were different. Chip’s talks had a subtle, tough-love tone to them.
While addressing the challenges practices are facing today, he stressed that pediatricians have faced similar challenges before. He mentioned that during all previous tectonic shifts (aka industry changes) naysayers shouted out the demise of private practices. Much like many are shouting today.
Chip eloquently argued that not only are the doomsayers wrong, but that pediatricians are actually in a better situation than most think.
Chip wasn’t disregarding the challenges or downplaying the potential threats. We are indeed going through tough times. But these tough times were an opportunity to transform and reinvent our practices, he argued.
My takeaway was: If the plan is to defend the status quo and hedge the long-term success of your business on account that you have the initials MD after your name, thus somehow inoculated from change, the end is certainly near for you.
MEETING, CONNECTING, NETWORKING, SOCIAL LEARNING
Attending a seminar like this to learn from the speakers is certainly worth the price and the time. But more often than not, the icing on the cake, at least for me, is the immeasurable, intangible value I glean from networking.
The people who attend these events are the smartest and brightest in my opinion (and I’m not talking about the faculty, although they are good too).
Whether attendees are veterans in managing practices or opened their first private practices last week and believe they have no clue what they are doing, the truth is, there is opportunity to learn from everybody.
The faculty makes the trip worthwhile. But I would say the attendees make the event special.
Next year I hope to see you there. Especially if you didn’t get a chance to attend this year.
I have lucky number 7 reasons why you should not miss this seminar.
1 – YOU’LL BE AWESOMER
I know awesomer is not a word. But it gets’s the point across. Here is the deal, no matter how experienced you are at managing a practice, there is always something new you can learn.
2 – YOU’LL LEARN NEW IDEAS
Managing a private practice can be a lonely world. There aren’t that many of us. And most of the time we are locked up in a back room (used for both your office and storage) trying to figure out how to keep the ship afloat.
Without exposure to a variety of points of view, you will miss new ideas and trends that can impact future results.
3 – YOU’LL GAIN EXPOSURE
Paul and his team at PMI have put together a superb curriculum. The educational materials will certainly expose you to new ways of managing your business (e.g., private medical practice) and help you discover how to be more productive.
4 – YOU’LL MEET COOL & INTERESTING PEOPLE
Here is the way I see it. The practices that tend to go to practice management seminars are precisely the practices I want to learn from. And PMI’s seminar provides a great opportunity to network with the best practice in the country.
5 – TALK TO CONSULTANTS AND VENDORS
Not only will you have access to a community of like-minded people that have similar struggles, have similar challenges and practical, hands-on advice, suggestions, and solutions, you will also have access to the industries top consultants.
Don’t tell them I said this, but if you ask the right questions, to say… Chip Hart, I bet you, you’ll get thousands of dollars worth of practice management advice for <ahem> free.
Keep in mind that experts in the field are some of the best people for you to get to know if you want to learn more about the current health care business climate as it relates to small, private, independent, pediatric practices.
6 – YOU’LL DISCOVER
You will undoubtedly discover innovative ways to help your practice remain competitive in today’s fast-paced, hectic private-practice.
7 – IT’S VEGAS BABAY (NOT A TYPO)
Did I mention it was in Vegas?
All work and no play can get old fast. PMI’s conference can add a layer of enjoyment to managing your career growth by mixing a social aspect into your learning and industry branding efforts.
Never underestimate the power of a little fun mixed with some interesting people!
BUT THAT IS NOT ALL
Use the promo code “PediInc” and save $75 off your conference fee.
When: Friday, January 29, 2016 at 2:00 PM – Saturday, January 30, 2016 at 5:00 PM (PST)
Where: Tropicana- Las Vegas
Sign Up:Click on the Eventbrite logo below to sign up
Don’t forget to use the promo code PediInc to get $75 off
Cost accounting is one of those topics that you either find fascinating (this makes you an accountant) or find it as boring as watching reruns on C-Span.
If you belong to the latter group, don’t worry. I got you covered.
Using a convenient store as the backdrop for the narrative, my friend Paul shares in the video below, the fundamental business principle of cost accounting and how independent pediatric practices can apply these principles.
The video is only 5-minutes long. But the lesson will stay with you for a lifetime.
About the presenter:
Paul Vanchiere is the co-founder of the Pediatric Practice Management Institute. PMI is a consulting group that specializes in helping pediatric practices in a variety of ways. To check out the variety of services Paul and his team offers, click on the link below.
If you haven’t picked it up (it is free by the way) I wanted to give you a little nudge to do so. Not everything in the ebook is going to work in your practice. But at the very least, I think the ebook will spark ideas that you would have not had otherwise.
If you are still not convinced, then let me share this little something that I got from a reader of PediatricInc recently that got the ebook.
Thank you soooo very much!
I shared your book with my staff, as the template for our practice meeting today, as we are forging ahead to re- engineer our practice, and I must say , afterwards our way forward became crystal clear.
In one day, we have created a Facebook page, developed an email template to thank new patients for visiting our medical home, and created three mini videos using myself and my nurse to welcome patients to Frontier Kids Care!
We have a new excitement about implementing our changes.
We are also looking at recalls, and the financial status of the practice.
We looked at our mission and are working on the charter.
Our improved website is due to be released next week, but we are going to be wasting no time in putting our new status on Facebook etc now.
I invite you to preview our before and after website at frontierkidscare.com
In Trinidad, obviously our needs are much simpler, we definitely do not have practice managers, but my solo practice has a nurse and a receptionist, and we cross train.
I definitely am challenged on the business side, so I realize I need a business manager in some form or fashion.
So again thanks, and I wonder if your book has been published so I can purchase one.
Your practice is blessed to have you!
Take good care.
I don’t know how else to put this, but my ebook is kind of a big deal. Pick it up for free by going here.
Don’t you just love these big companies that try to have their stuff sound more important. I mean, Customer Transition Program, who doesn’t want to be a part of that? I wish they’d call it what it really is “Sales Rep Needs to Meet Her Quota Program.”
I’m sure you’ve gotten something like this ad on the side and since you are a smart, level headed business person you ask yourself, should I jump on these savings? Is it worth to buy more vaccines than I actually need? How much will I actually save?
If you asked an MBA to answer these questions for you, here is what she’d say:
The MBA Response
First, we need to estimate the future cash flow that the vaccine will generate. Then compare it to a return from an investment account option, like a CD or a treasure bond to see which one gives the best return on your investment.
Here is how we can work this out:
Vaccine Revenue – Cost of Vaccines / Cost of vaccine
Now, we need to compare this result to another investment to see if the vaccine investment is a good one. So, let’s say we take $135,000 (the money you’d spend on the vaccines) and put it in an investment account that gives us 5% interest. Our $135,000 will be worth $141,750 in one year ($135,000 multiplied by 1.05).
Now we can compare which investment is better because we have something to compare the vaccine investment to. So, this is what we need to determine: put the cash in a money market with a 5% return or invest the cash in vaccines and expect a 30% return in a few months.
Small Business Owner Response
That was the MBA response. But the small business owner has to keep an eye on cash flow carefully thus cash flow is also something to consider. Buying 6-months worth of vaccines can tie up a lot of cash. If you have the cash, knock yourself out. But if things get tight at the practice and you need the money to help with payroll or another expense (i.e. a new air-conditioner unit), the money won’t be there. Something to think about.
Financial Planner’s Response
From a financial planner’s perspective, one may want to consider using the money you’d invest in the vaccines to pay down debt. Although saving a few bucks on vaccines might help to reduce cost while potentially increasing your revenue, paying interest on loans can easily offset any savings one may get by jumping on the Customer Transition Program offered by a pharma company.
So, should you buy the vaccines or not? I guess the best answer is, depends. My friend Chip says it best when he said: A practice thinking about buying new equipment, expanding into a new office, hiring a new partner, etc., might find a higher return on an investment in the practice. Thus, every practice’s situation is different. It’s not simply the future value of money, but the future value of what you do with it besides put it into the market.
Today is a good day. Why? Because pediatricians are banning together for a cause.
Dr. Paul Offit, Chief of Pediatric Infections Diseases at Children’s Hospital of Philadelphia has a book out called Deadly Choices: How the Anti-Vaccine Movement Threatens Us All. (Amazon Link).
Dr. Offit is an expert on vaccines, immunology, and virology. Moreover, he is a huge champion of the PRO-Vaccine movement and according to his Wikipedia page, he is one of the most public faces of the scientific consensus that vaccines have no association with autism.
In an effort to raise as much awareness as possible about the importance and safety of vaccines, pediatricians all over the US are banning together to make Dr. Offit’s book a top seller on Amazon.
And if you’d like to see a very interesting – and funny interview with Dr. Offit, check out the link below to watch a video.
On PedTalk – a pediatric mailing list for those that don’t know – another discussion erupted concerning vaccines. As usual, the topic was about insurance companies not compensating pediatricians enough to cover the cost of vaccines. One person asked why pediatricians were not fighting this issue and why the American Academy of Pediatrics was not doing more to help pediatricians in this regard.
Dr. Hershel Lessin responded… and boy did he respond. I thought his response was so good, that I asked his permission to repost his comments on the blog.
It was important for me to share this discussion as well as Dr. Lessin’s response because I think: 1) the discussion brings awareness to a fundamental challenge pediatricians face, which is, vaccine management; 2) the response also brings awareness to various resources (from the AAP) designed to help pediatricians with this very matter; and 3) Dr. Lessin’s response is a much needed tough love. And who better to give the tough love than a colleague.
Below is his reponse.
For those who do not know me, I am the lead author of the vaccine coverage policy statement published in Pediatrics in June. I am a member of a large pediatric practice full time. I am on the executive committee of SOAPM and the editorial board of PMO. I also lecture extensively on vaccine economics, Practice Management and Medical Liability, including recently at the NCE in San Francisco last month.
As the comic strip POGO said decades ago: We have met the problem and it is us.
Us being pediatricians. The AAP is working extensively to help this situation. We have national interfaces with payers. We have established state and local pediatric councils to meet with payers. We have revised the policy statement to recognize all of this issues you
mention. We have SOAPM (Section on Administration and Practice Management) which any AAP member can join for a paltry $35/year for which you get literally $1000’s of dollars of free consulting advice. We have Practice Management Online where nearly everything you need to know about vaccine economics is located. We have developed the business cases for vaccine payment and vaccine administration posted on PMO.
Yet despite all of this, what happens? The vast majority of Pediatricians pay no attention whatsoever and seem to go out of their way to avoid acquiring any business knowledge whatsoever. As health care economics gradually destroys pediatric primary care, this has improved to a small degree. SOAPM, the only section of the AAP that is growing, has only about 1000 members out of the 60,000 US pediatricians, all of whom, regardless of practice setting ought to be members. PMO is used a lot, but nowhere near the amount necessary.
Why? Because pediatricians somehow think paying attention to business is somehow “dirty” and that administration is “simply pushing paper”. The payers know this. They reason they do not act is because for everyone in SOAPM, there are 6 pediatricians down the street willing to accept whatever they are offered until they can no longer make payroll, thus destroying any ability for pediatricians who understand economics to negotiate.
This is our core problem: OUR RIDICULOUS ATTITUDE TOWARD BUSINESS.
As I say in all of my talks: “Doing Good and Doing Well are NOT mutually exclusive. Until pediatricians are willing to do more than complain, until they are willing to get educated, until they are willing to join AAP and SOAPM, until they access PMO, until they do not sign every contract that crosses their desk without reading it, until all of this happens, nothing will change.
Payers are businessmen. They are not necessarily (with a few notable exceptions) evil. They do what is needed to assure the health of their business and their shareholders. Pediatricians do not. In fact, we do not even recognize why this is important.
Until we realize the saying: NO MARGIN, NO MISSION, we will gradually be forced to close our doors. Who will care for the children then?
Time to stop complaining and wake up to reality. There is no one that help you unless you choose to help yourselves.
What are your thoughts? Do you think Dr. Lessin is right? Does he have it wrong? Or do we all need to wake up and get on board?
I was very happy to see Wiredmagazine’s cover story about vaccines titled An Epidemic of Fear: How Panicked Parents Skipping Shots Endanger Us All. I’m a big fan of Wired, so to see they’ve written a piece advocating vaccines puts a smile on my face.
If you haven’t read it, you can check it out here.
Wired magazine published some of the readers’ responses to the story. The results? Polarizing! People are very passionate on both sides of the argument. In fact, it seems that people that oppose vaccines are 10x more passionate about the issue than the people that support them.
It easy to say, Wow, people that think vaccines are bad have no clue and I hope someday they’ll understand. However, it seems to me that we ought to find ways to create a sound story that resonates with the public at large regarding the benefits of vaccines. It is in the best interest of us all.
Creating a sound story: Where do we start?
If we look at other campaigns that have gained traction in the past, we can learn a few things as to how to change the perspective of those that believe vaccines are not good for children. Good examples are Al Gore’s global warming campaign.
Whether one agrees or not with the global warming message is not the point. I’m using it as examples of a causes that has used effective marketing, story telling and compelling campaigns to gain awareness and move their cause forward. As a result of Al Gore’s effort and others, there is whole “go green” sentiment that even corporations seems to want to be a part of.
What to do?
I think the pediatric community ought to be able to mount a collective campaign in an effort to change people’s perspective regarding vaccine safety while at the same time combat the anti-vaccine sentiment that is rampant and often supported by the media.
But before we embark on a campaign, we need a game plan. This is what I propose.
Expose the villain
You cannot tell a good story without a villain. Vaccine opponents have done a good job in making vaccines the villain in this debate. In reality, we know that vaccines are actually the hero of this story. Thus our efforts ought to entail exposing the real villain. The villain is Pertussis or Meningococcal meningitis or Influenza, which kills around 30 thousand people each year in the US.
Until we are able to identify the real villains in this debate, the Jenny McCarthy’s of the world will keep on making “vaccines” and the people that administer them the villains.
Create a tagline
The pro-vaccine movement needs a tag line. Something simple and to the point like “Vaccines saves lives.” I know, it sounds cheesy; but taglines work. Have you ever heard of the tag line “Don’t leave home without it?” How about “Reach out and touch someone?” or “an inconvenient truth.” The tag line will help reinforce our pro-vaccine message.
Selling Facts vs Emotions
If you visit the AAP section on immunization, you will notice a lot of emphasis on vaccine safety. The problem with that is that there is no emotion.
When Al Gore wanted to make a point about how pollution was affecting our environment, he showed pictures and told stories about how glaciers were melting and polar bears were dying.
Preaching to parents about vaccine safety is not nearly as affective as telling a story about family that lost a child due to influenza. A child with an atrophied leg due to Polio resonates much deeper than a fact sheet that says Hep B is a disease that affects the liver. As Seth points out, large congregations or political movements don’t turn out because of a spreadsheet; they are moved by an emotional connection.
Tell a Story with Emotionally Charged Event
We can tell parents that vaccines are safe. They may or may not believe us. But if we show them a picture of a child with Measles and tell them they are able to avoid pain and suffering for their child by vaccinating her, I think that has a much more impact.
When we are able to illustrate, thru storytelling, the consequences of refusing vaccines, we’ll be able to make a deeper impact.
Sell a dream
In essence, that is what Al Gore pushes when he ‘sells’ his global warming story. Back in 1992 in his book Earth in the Balance he wrote “…I cannot stand the thought of leaving my children with a degraded earth and a diminished future.” Today, he has not changed his tune.
We all want a better tomorrow for our children, right? A vaccine campaign must be able to “sell” the dream of a better tomorrow.
Call to Action
All effective campaigns have a call to action. The pro-vaccine message’s call to action is simple: the future of our children is at risk unless we vaccinate our children now.
Do we have their attention?
Once we have people’s attention, then we can focus on giving them all the scientific fact their hearts desire. We can inundate them with all the overwhelming data that vaccines are safe; and we can also start promoting how vaccines are one of the most inexpensive ways to reduce health care cost. Lastly, we can highlight how the cost of vaccines is far less than the cost of treatment.
I’ve heard a lot of people question why would parents/patients disregard their pediatrician’s advice (and credible scientific evidence), over a Playboy Bunny’s unscientific conclusion that vaccines cause autism.
The answer is simple, really. Jenny McCarthy is telling an emotional and tragic story that depicts a mother struggling against all odds to overcome the challenges of her son’s disease. The pediatrician, on the other hand, is just relaying boring scientific data and repetitive “facts.” It is like telling a teenager that smoking can give you cancer versus showing them a patient with emphysema.
Just like sex, a tragic, emotional story sells. Think about Oscar winning Hollywood movies… which one tend to do better? Most of the Best Picture winners are stories with characters that overcome extraordinary challenges like injustice, discrimination or a forbidden love. Hollywood directors and screenwriters know that a story without conflict or crisis will bore the audience.
In my opinion the pediatric community has never been able to emotionally “sell” the importance of vaccines the same way McCarthy has been able to put a face on autism.
“Emily Lastinger was only 3½ years old when she came down with the flu. Her parents, Joe and Jen, tried in vain to keep her high fever under control, but Emily’s condition worsened, and several days later, she stopped breathing. Emily died of complications resulting from the flu, including pneumonia and empyema.”
“It’s tough to see your child in pain because of getting a shot, but it passes. To see him or her on a respirator, that’s really tough. But to have to plan a funeral for your child, that’s the worst thing in the world.”
If you haven’t heard about this book published by Texas Children Hospital, I recommend you buy a few copies for your office. The book, which illustrates stories of families and patients affected by vaccine preventable diseases, is very powerful and emotional.
Our office received a courtesy copy of the book a few months ago and we found the book so compelling, that we ordered 50 copies to give to parents that are either refusing vaccinations or are on the fence about their children’s shots.
Dr. Vartabedian says it best “…when we publicly put a human face on the victims of vaccine-preventable disease we would begin to win the war against antivax propaganda.”