To weather this recession, Peter Lucash makes the suggestion that the healthcare clinic owner should consider cutting salaries instead of letting staff members go.  Fedex, as opposed to many other large companies, has recently done so by cutting back on executive salaries in addition to the rest of their employee’s wages.  First impulse for business owners and managers is to cut jobs to reduce labor expenses significantly.  However, as Lucash points out, there may be more benefit in trying to keep good employees around.

Cutting staff will reduce expenses, but the pain will be felt in many ways – short staff, stressed staff, a lessening of the quality of your care for patients, and more tasks that drop to the physician, whose is the key revenue generator. At some point, however, business will pick up and you will then be scrambling to recruit, hire and train people, something that costs you in dollars, time and disruption as the new employee learns how you do things.

Medical practice in the slow economy is - to put it bluntly - tough.  Requiring difficult decisions by physician owners with regard to ways to cut expenses, outsource billing operations, maximize reimbursement, and still provide quality patient care, the economic recession has wreaked havoc on many private practices to date.

And there is more to come.

I blogged about the closure of a small medical practice in my hometown of King City, CA  back in September, and the harsh realities of an industry that must strike a balance between clinical expertise and business acumen in order for good, quality care to occur.  The deepening recession we are facing is but a stark reminder of the importance of this, and it is imperative that practice owners realize that their attention to the business elements of their practice is critically important to the care of their patients. 

I found the following article in yesterday’s Los Angeles Times which speaks to the cloud of insolvency that continues to loom over one area of medical specialty in particular - the primary care practice.  I encourage you to take a look at the article as it captures many of the obstacles faced by primary care physicians in today’s economy: slowing payments for services, poor reimbursement, high overhead, patient cancellations because of inability to afford services, and the use of ancillary, cash-based services to supplement revenues.

[Walford] hadn’t drawn a paycheck for herself since February. On top of that, her practice has cost her $40,000 in personal savings and left her with $15,000 in credit card debt. Walford, 39, also owes $80,000 in medical school loans. She shops at Ross and other discount retailers, and rarely eats out or takes time off.

…

Small general practices afford doctors autonomy to practice medicine as they see fit and can produce strong doctor-patient bonds. But these physicians have little or no clout to leverage better payments with insurers; they have no economy of scale, which makes overhead more burdensome.

…

“As people are tightening their belts, they are deferring things they think are a luxury or not absolutely necessary,” said Long Beach physician Jeffrey Luther, president of the California Assn. of Family Physicians. “We see people putting off physicals and mammograms and blood tests because they just don’t have the cash.”

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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

We’re blogging about this quite often here at The Healthcare Entrepreneur, but in case you haven’t noticed, the souring economy is having an impact on the healthcare provided through private medical, physical therapy, and dental practices.  People are delaying care, paying more slowly, and losing insurance coverage - all of which have a direct impact on the ability for private practices to run strong.

It seems that women are no exception.

In this article from WebMD Health, a new study released by the National Women’s Health Resource Center (NWHRC) is said to indicate that the rising costs of healthcare combined with the economic downturn is having a major impact on women’s decisions regarding their care.

• 28% of women said they put off going to the doctor during an illness for financial reasons.
• 19% said they had skipped recommended medical procedures, such as Pap smears or mammograms, because of cost.
• 18% said they had taken less than the recommended dosage of a prescription drug in order to make it last longer and 18% failed to fill some prescriptions.
• Only 4% said they had put off taking their children to the doctor because of the cost.

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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

In this article published in the Wall Street Journal online, the issue is addressed whereby the housing crisis is impacting the ability for Americans to pay their medical bills.  This has been in the works for some time now, and with many ARM’s readjusting and the amount of equity in Americans’ homes seriously deflated, medical bills are piling up simply because they have to.

Medical practices will be wise to understand what is going on in the economy and how they can work with their patients to make it through this difficult economic time.

People have long resorted to borrowing against their homes to pay for medical care in times of illness or after an accident. But with home values plummeting and interest rates on adjustable mortgages ratcheting higher, some indebted patients are at risk of losing their homes in order to pay for surgery, cancer treatment, drugs and other big-ticket medical expenses. Other patients are forgoing health care in order to keep from losing their homes.

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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

Maybe we only think we are recession proof.  With the seemingly never ending spiral of credit, housing and banking crises ravaging through the global economy, investors are starting to take notice that healthcare doesn’t exist in a silo.

Medical practices, hospitals, and physical therapy clinics get paid by someone, and if that someone is in financial trouble, you can bet the problems don’t stop at the practices’ front doors.  The someone just so happens to be “everyone,” or so it seems in our economy today.

This article from the ChicagoTribune.com discusses Moody’s downgrade of the healthcare industry’s 12- to 18- month outlook.

The New York-based financial ratings firm has issued reports in the past two weeks on various sectors, from hospitals and medical devices to insurance companies, revising the health-care industry’s 12- to 18-month outlook to “negative” from “stable.”

Moody’s sees fewer patients seeking medical care, particularly elective surgeries, while more people could lose their health-care coverage altogether. Such trends will lead people to delay getting medical care or avoiding treatment.

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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

Hospitals are only separate from private medical practices by virtue of their specialty and operations, not their economic disposition.

New data from the American Hospital Association indicates that not only are elective procedures down, but also overall admissions as well.  Additionally, the data indicate that there is a significant increase in the number of patients who can’t afford the cost of their care.

These data should catch the attention of private practice owners and administrators throughout the country as hospitals feel the same pains as private medical clinics when patients delay care or have a difficult time paying for services rendered.

This article from Yahoo News speaks to this new data made available by the American Hospital Association.

67 percent of hospitals saw some drop in elective procedures; 6 percent saw a significant drop.

63 percent saw some decline in overall admissions; 9 percent saw a bigger drop.

Inpatient and outpatient surgeries and emergency department visits were all down roughly 1 percent in the third quarter.

Half of hospitals have seen a moderate or significant jump in uncompensated care, with a jump averaging 8 percent. The association cites unemployed people losing their health insurance.

Total profit margin at the Database hospitals dropped from an average 6.1 percent in 2007’s third quarter to an average loss of 1.6 percent in 2008’s third quarter.

56 percent of hospitals are reconsidering or postponing renovations or expansions, and about 40 percent are delaying improvements to information technology or other equipment.

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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

The following was shared in a press release made available earlier today by Vantage Clinical Solutions, moderator of The Healthcare Entrepreneur Blog.
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Vantage Clinical Solutions Offers Free Help
to Medical Practices Impacted by Slowing Economy
New “Keep the Doors Open” Program Begins Monday, November 17th

Bend, Oregon (November 13, 2008) Responding to the economic conditions currently affecting the local healthcare market, Vantage Clinical Solutions has initiated a free program to assist local healthcare practices with financial and business planning in preparation for a projected tough first quarter of 2009 for healthcare practices. The program is called “Keep the Doors Open,” and is intended for small to medium-sized healthcare practices (medical, dental, physical therapy, optometry, etc.) that are either experiencing or anticipating significant financial turbulence.

Serving communities with a unique combination of healthcare consulting and management services, Vantage Clinical Solutions is in a position to recognize that help is needed quickly in order to keep many small healthcare practices in business. “We follow the trends daily, and have recognized that if something isn’t done to help some of the smaller healthcare practices, our community is going to see a number of them struggle to remain open as we enter 2009,” said Tannus Quatre, principal of Vantage Clinical Solutions. “This will have myriad effects on local communities, and it’s important that something is done to lessen this occurrence as we experience this economic downturn.”

The way in which healthcare practices are being affected stems from a rise in unemployment, which affects the number of insured persons, and from changes to many insurance plans which now require higher deductibles, co-pays, and larger portions of bills which have become the responsibility of the patient. Combined with the tightening of credit markets and declining home values, healthcare practices are entering a “perfect storm” which will affect how and when they are paid for services. “We’ve seen patients already begin to delay treatments and prescriptions because they can’t afford their responsible portion of the bill,” said Quatre. “This impacts the overall volume of patients seeking healthcare services, which results in an overall drop in private practice revenues for many small healthcare businesses out there. We only project this to get worse in the first quarter of 2009 when deductibles renew and patients face larger out of pocket expenditures for healthcare services.”

The Keep the Doors Open program consists of a free strategy session of up to 2 hours in length at which time practice owners and administrators can openly share their concerns regarding their practice, and review materials such as financial statements, marketing strategies, and practice reports with a business consultant who specializes in healthcare practices. This is the first time that Vantage Clinical Solutions has offered a service of this kind in response to economic conditions, and feels that the program will allow practice owners a structured, unintimidating environment through which to seek help. The strategy session will provide ample time to dig into detailed areas of the practice, providing for the development of concrete ideas and strategies that will help healthcare practices brace for the economic storm facing the healthcare industry. The program begins November 17th and will run through March 31, 2009.  Click here to set up a meeting through the “Keep the Doors Open” program.

Vantage Clinical Solutions incorporated in 2006 and has seen steady growth since inception. The company assists healthcare practices throughout the country and has partnered with industry leaders to provide the highest quality of consulting and management service available to small and medium-sized practices. In May of this year, Vantage partnered with a consulting firm in Colorado which provides Vantage clients with 30+ years of industry expertise in the management of healthcare practices nationwide.

According to the website, www.vantageclinicalsolutions.com, Vantage Clinical Solutions exists for the mission of improving healthcare through entrepreneurship, offeringhealthcare consulting for clinical practices through Vantage Consulting, fully-hosted practice management solutions through Vantage Management, and logistical and financial ownership assistance for first-time practice owners through Vantage Ownership.

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For more information on Vantage Clinical Solutions, Inc., visit www.vantageclinicalsolutions.com.

Nothing too earth shattering here; just a little observation made during my nightly bill pay exercise at home. 

I use an online software to pay my bills and manage my accounts, and since I’m in the software on a regular basis, it’s pretty easy for me to pick up on the slightest of trends as they occur.  One trend I’ve followed for a long time (why I’m only getting around to blogging about it now I cannot answer) is the turnaround time it takes for a vendor to debit cash from my account when I pay with a debit card.

I’m talking strong trends here. 

Some companies take a notoriously long time to get to my cash.  I might pay for something on a Monday, and it’s the following Monday or Tuesday before it drops from my account.  Others debit the money almost immediately (too fast, if you ask me - I mean, I like to have a day breathing room at least - but hey, it’s not my money after I make the purchase).

So what’s the point?  Why, on a earth are we discussing this at The Healthcare Entrepreneur?  We’re discussing it because time-to-cash is an indicator of a company’s financial strength.  The trends I notice are not just that some companies take longer than others to get to my cash after a purchase - it’s that there is a strong positive correlation between the financial health of the companies I buy from and the speed at which they get to my cash.

To put it plainly, the companies that get to my cash quickest after I make a debit purchase tend to be the strongest financially of the vendors I support with my pocketbook.  The ones that take their sweet time - those are the ones that I’ve been reading about in the newspaper that are struggling financially - the public school system, small businesses, and…medical and dental offices.

No joke here, and not surprised at all.  Even when offices of healthcare practices get paid by me (and yes, I do pay my healthcare bills), there is a delay in getting to my cash. 

What’s the reason for this?

It’s simply poor understanding of the drivers of business success by healthcare practice owners.  I’m not bagging on all of us - just the ones that don’t understand that it is critical to get paid as soon as humanly possible after rendering service.  We already face an uphill battle in the healthcare industry with the delays associated with the third party payment system - why would we want to make it any worse by taking a few extra days to collect on a payment by check or a debit purchase?

Practice owners: Do your own research or take it from my online pocketbook - the correlation is very real between the strength of a company and how fast it is paid for its services.  Put the processes in place to collect quickly and you’ll find that you strengthen the financial viability of your practice by leaps and bounds - especially in today’s economy.

Our economic woes are far from over.  This article published by the Medical Group Management Association (MGMA) validates some of what many of us already know to be true:

1. Healthcare services are being viewed as discretionary.  Patients are foregoing certain operations, services, and prescriptions simply because they can’t afford it.  This is impacting private practices through reduced volumes of services rendered and procedures performed.

2. The uninsured are increasing.  With increasing job losses, reliance on COBRA coverage has increased, but at a significant cost to the insured.  As coverage expires and patients become unable to pay for the expensive coverage, growth in the uninsured population will likely continue. 

3. Payment for services are slowing.  For those patients that do seek healthcare services, payments for those services are slowing.  Co-pays and responsible portions of claims that go to the patient find themselves competing against payment of other household bills such as credit card debt, mortgages, and groceries.

All is not bleak, but private practice owners must be prepared. Make sure you are collecting your co-pays at the time of service, setting up reasonable payment plans with paying patients, and stockpiling cash reserves in order to weather the economic storm that is likely to last a while.

Published in July, the Rockefeller Foundation/Time Campaign for American Workers Survey revealed that because of costs:

• 23 percent of respondents had not filled a prescription, up from 17 percent in 2007;
• 23 percent had gone without health insurance, up from 20 percent in 2007; and
• 25 percent had not visited a doctor, up from 18 percent the year before.

_________________

Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

We’ve blogged about it before - times are tough, and some medical care is making its way into the discretionary category of family budgets.

Here is an excellent article from the Washington Post speaking to the issue of medical care as it pertains to the constricting family budget.  Reducing needed medical care is obviously not the right long term approach, but medical care is a bill to pay, and when budgets shrink, tough decisions will be made by our patients.

And yep, this affects the bottom line of private practices throughout the U.S., so we’d better have a strategy in place to stay in the black.

Nationwide, the number of consumers who went without a prescription, tapped into retirement savings to pay for health care or skipped a doctor visit for themselves or a child has risen since last year, according to a survey released this summer by the Rockefeller Foundation and Time magazine. One-quarter of the 2,000 respondents, for example, said they had decided not to see a doctor because of cost in 2008, up from 18 percent the year before. Ten percent said they did not take a child to the doctor for the same reason.

_________________

Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.