| Medical Practice External Problems |
| Most of the external problems faced by independently practicing physicians are caused by the fact that the U.S. healthcare industry is controlled by the federal government and large commercial insurance companies… and not by the supply & demand equation. Some of the laws regulating the HC industry are dated and unfair to the physicians. Since most medical practices are small business entities, they don’t have the power to negotiate with large commercial insurance companies. |
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| Payment-Cuts by Insurance Companies |
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At present, the U.S. healthcare industry is dominated by a handful of large commercial insurance companies. A number of mergers and consolidation in the HC insurance industry has created a few giants who monopolize the insurance market. Since the independent medical practices are very small business entities, the insurance companies are in a position to dictate the terms of reimbursements to the physicians.
Over the past few years, every insurance company has been gradually making payment-cuts to the physicians for their services. The payment-cuts begin with the Medicare (due to federal government budget problems), which sets a baseline for the industry. This gives enough reason to all commercial insurance companies to follow the foot-steps of Medicare.
Physicians are the only professionals in the country who get a negative salary raise every year.
Another major flaw in the U.S. healthcare system is that there is no provision to compensate a physician for his experience and skill levels. A physician with 40 years experience gets paid the same amount as a junior physician.
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| High Malpractice insurance Premiums |
The high malpractice insurance premiums are caused by unfair laws passed by the state governments. The majority of government officials who have the authority to pass laws are attorneys. Obviously, they have passed the laws that would favor the litigation attorneys… without any consideration to the fairness of the laws.
The fundamental problem is that in many U.S. states, there is no cap on the amount of malpractice lawsuits. And worse, there is no cap on the amount pocketed by the litigation attorneys. In most malpractice lawsuits, litigation attorneys keep 70% - 80% of the awarded amount, and the suing patient keeps the rest. |
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| P2P Recommendation |
More than 90% of the patients receive their HC services from independent medical practices. In order to improve the quality of services to the patients, it is essential to improve the financial health of independently practicing physicians, and they must be provided with protection against the unfair lawsuits.
The first step towards these goals has to be taken by the independently practicing physicians. |
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| You need to join the P2P network… |
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…which is created for the benefit of physicians as well as patients. A large community of physicians and patients is needed to accomplish these goals.
The P2P Network offers Basic, Silver and Gold Memberships to physicians. For further information, please click on the link (on left) - List of P2P Services. |
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| Medical Practice Internal Problems & Inefficiencies |
| Besides external financial problems caused by insurance companies, and legal problems caused by dated and unfair healthcare laws, a physician has a number of internal medical practice problems. At present, 85% of practices are still managing the overhead work manually using paper, fax and phone, which is inefficient and labor intensive. A shortage of skilled HC workers has caused an ever-increasing overhead cost problem. |
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| Paper based Billing Problems |
Billing is one of the most important parts of any medical practice. Your survival depends on your billing system. Whether you use in-house billing, or an outside billing agency, the paper based billing system has a number of inherent problems.
Inefficient and Costly
The average cost of paper based billing is 8% to 10%. As the labor cost rise, the paper billing cost would also go up in the future.
Human Errors
Paper based billing system requires manual data entry, which is prone to human errors, especially in large practices and billing agencies where work load is heavy.
Accountability Even if you have in-house billing and are managing the process yourself, having tight control over the paper based billing system does not guarantee 100% accountability, or eliminate Human Errors. |
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| Paper Charts and Storage Problems |
Writing on paper charts is easy, but managing them is in-efficient and costly. In a midsize practice with 5 physicians and 125 patients per day, two full-time employees are needed just to file paper charts and folders, which cost $30,000+ per year. For a multi-location practice with more than 2 branch offices, the employees in the main office are busy all day faxing patient charts to branch offices. Above all, paper charts are not available instantly when they are needed by the physician. Sometimes, the physician wastes considerable time (which translates to $200+/hr.) to locate a chart within a large practice.
Since medical practices are required, by law, to keep patient medical records for at least 6 years (21 years for pediatricians), most practices run out of storage space in their offices after few years. With the result, they rent outside storage space just to keep the old patient charts… an additional overhead cost. |
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| Appointment Scheduling, Registration, Patient Phone Calls & Faxes |
| These front office tasks are the most labor intensive and costly functions of any medical practice. Almost every practice management (PM) software only has the provision for manual appointment scheduling done by the office employees. Patients call the office during the day, and a front office employee talks to each patient for several minutes to schedule an appointment. Patients fill paper registration forms, and the employees enter the data into the PM software. The only way patients can reach a physician is by phone. A large number of faxes come everyday from pharmacies, diagnostic labs and other medical practices. In a midsize practice of 4 to 6 physicians with 100+ patients a day, the cost of these manual tasks is typically $120,000+ per year. |
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| Managing Inventory, Employees and Finances |
Most practice management software packages don’t provide capabilities for the management of medical inventory, employees, pay roll or finances/accounting. Majority of practices manage these aspects of business manually using paper, which is time consuming, in-efficient and difficult to monitor.
Inventory:
Many times, a patient comes to the medical practice for treatment… only to learn that he has to come back again because some medical supply item is out of stock. In medical facilities such as an Ambulatory Surgery Center, to re-schedule a surgical procedure at the last minute can be costly and cause serious damage to the reputation of the facility.
Employees:
Most practices currently use paper log-sheets to record the check-in and check-out time of employees. Since the employees make these entries themselves, they will ignore recording the exact time if they are late, or leave early by few minutes. These few minutes everyday in a large practice can accumulate to thousands of dollars per year. Also, monitoring the vacation time, sick leave etc. for all employees can be very time consuming job.
Finances:
With a paper based practice management system, the office manager/owner-physician does not have the capability to compute and precisely monitor all office expenses. Manual calculations using a calculator are very time consuming and prone to human errors. Consequently, they may not be able to manage the practice cost-effectively. |
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| Employee Turnover and Training |
| Employee turnover is an unavoidable problem for any business. Training of new employees always adds to the overhead cost of a medical practice. However, this problem is serious for a small practice with only 2-4 employees, especially if the paper based billing is done in-house. When the person with billing skills leaves, it almost creates crisis for the practice. For large practices with high patient volume and large number of employees, finding, hiring and training new employees becomes stressful and costly for the office manager/owner-physician. |
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| Acquiring new Patients (customers) |
| At present, the healthcare industry does not have an organized system allowing physicians to acquire new patients. The unfair and dated laws governing the healthcare industry have imposed serious limitations on medical practices. All specialists, and new primary care physicians, are constantly struggling to find ways to acquire new patients. A privately owned medical practice is a business entity. But the dated laws prohibit them to use standard business tools and methods (used by all other businesses) for new customer acquisitions. |
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| HIPAA Regulations |
With a paper based overhead operation, it is practically impossible for any medical practice to fully comply with HIPAA regulations. Even if you have EMR (Electronic Medical Records) software, but your PM (Practice Management) software forces you to use paper Registration forms & Superbills, your office may not be compliant. Most EMR software packages (and the associated hardware) currently available in the market are prohibitively expensive. As the 2008 proposed deadline for mandatory EMRs approaches, most vendors are likely to further increase the prices. With these sky-high EMR prices, most physicians are wondering… how to comply with HIPAA regulations! You do have a strong reason to be concerned… if auditors from Health & Human Services department (referred as HIPAA police in the industry) come to inspect your facility, you can be fined up to $25,000. The overhead functions take away a significant portion of physician’s workday that he could, otherwise, utilize examining patients to generate revenue for his medical practice.
The P2P Network offers Gold Membership to physicians to solve most of the internal practice problems. For further information, please click on the link (on left) - List of P2P Services.
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