THE BUSINESS OF MEDICINE FOR RESIDENTS, FELLOWS AND NPs: Interview Preparation for the “New Normal.”
In a blog earlier this month I addressed the issue of pandemic regret, i.e., not taking the time to seriously reflect on your practice or career in medicine and to reimagine a new way of practicing in the era of COVID. But what does this mean for residents, fellows and NPs beginning to look at options for a medical career after graduation?
As I noted in that blog, much of the practice of medicine is not going to change. The payers—government and managed care—are not going away. Although there is still a move to bundled payments for surgeries and other treatments, fee-for-service and RVU forms of reimbursement will be the norm for procedures for most medical specialties. Quality will be reimbursed in the form of bonuses/rewards. Patient satisfaction will be of the utmost importance.
The evaluation of potential jobs and employers will require all of what is outlined in my platform, www.FirstMEDPractice.com. But there will be some new things to find out and analyze, especially if you are in primary care, IM or OB/Gyn. Here’s a short list.
Telemedicine: Although telemed has been a huge success during the last few months of COVID, total visits have started to level off as the extent of what can be done has come into focus. The last number I saw indicated it was leveling off at about 40% of the primary care group. But it’s here to stay and should be discussion topic and evaluated when looking at any job opportunity. How much of your proforma is based on telemed? What are the requirements in your daily workload? Afterhours? What are the reimbursements like among managed care payers?
How will telemed patients be followed up? Doctor visit? NP? Who will make sure medications are taken, review and evaluate tests, and get back to the patients with this information? How HIPPA compliant is the current telemed operation? And what do the state laws say about telemed and it’s future?
And the biggest question: What happens to my proforma projections if Medicare decides not to continue reimbursing for telemed at the end of the crisis that brought about their decision to do so? What will managed care payers do? Asking this question, and its answer, will give you a very good indication of the kind of financial planning and leadership a prospective employer has in place: Have they planned for a change?
Social Media: Is an absolutely must have. My clients are working with PatientPOP and DoctorLogic to help them integrate into Facebook, Instagram, etc. In fact, some are now working with branding agencies to help them establish their “brand” name even more quickly than the software platforms mentioned above. This has to be part of any employment relationship, no questions asked. If it’s not, be wary.
Patient Scheduling/Flow: By now you’ve heard about the various ways practices are dealing with patient visits as a result of COVID, restricting the use of waiting rooms, etc. Be sure you completely understand their new normal here. How will this impact your ability to maximize visits? Also, ask what will be done with the waiting room if it proves obsolete; unused rental space is expensive and you will be apportioned it as part of practice costs.
Capitation/Direct Primary Care: All traditional primary care practices have been hit hard by COVID. There is a recovery underway, and certainly a lot of pent-up patient demand, as well as great concern among the medical community that patients are foregoing necessary care now and will end up in emergency rooms or catch health issues before they become critical. There is talk among many experts that during this primary care crisis the government needs to step in and help primary care office stay open. Certainly, the US does not need to reduce the number of practicing primary care doctors.
Some have suggested that to solve this problem we need to return to capitation, a model where primary care doctors are paid a monthly fee for each of their patients whether they see them or not. This is similar in some ways to direct primary care, where physicians align them selves with insurers under a similar capitated model; they also can contract with patients directly (in some ways DPC is very similar to concierge medicine, but the physicians have an office). Both fit the private practice model, although both take time to mature because you have to access new patients.
I bring these up because if you are just starting out you will need some time to evolve your practice, and that will require your employer funding your practice for some time. Be sure to ask lots of questions about how your practice will grow and whether or not you will be responsible to repay any monies advanced for this purpose (i.e., they are a loan).
The healthcare business and market is undergoing changes almost weekly. I’ll continue to provide analysis as it pertains to future employment issues. Stay tuned.—TOM ELLIS III 5/24/20. www.FirstMEDPractice.com
Last week I listened to a podcast by Dallas-based corporate strategist Robin Pau. During the broadcast Robin coined a phrase new to me that applies across the board to many businesses: Pandemic Regret.
His podcast was built around three activities necessary to make sure that at the end of the virus onslaught you don’t suddenly realize you have not used some of the downtime impacting many medical businesses to plan for the future (i.e. suffer from pandemic regret).
Those activities are:
If you are a resident, fellow, or NP still in your training, don’t be confused with phrases like “medicine will never be the same.” Many aspects of the business of medicine and running a practice are not going to change much at all, at least not without a longer evolutionary timeline. Payers will remain present, and dealing with them will continue much as is. Programs to reward providers for excellent patient care will grow. Dealing with most of the important issues of running the business of a practice, as outlined in my FirstMEDPractice platform will still require that you understand how your practice is developed, managed and how those aspects will directly contribute to clinical and job satisfaction.
Don’t throw up your hands thinking the that medicine will never be the same. Most of it will be the same for doctors working to make a good living, run the business of their practice, and find fulfillment. If you are entering the time in your education when graduation is nearing, and recruiters are contacting you, it is still critically important to understand the business of medicine and how that knowledge will impact practice success.
Finally, one other thing. Be prepared to develop your own brand, regardless of whether you are in private practice of “corporate” medicine. Understand how social media works and make sure it’s a critical part of your first year in practice. Work with recognized firms in this area and look to them to provide you with examples of how successful practices are branding themselves as fits your specialty.
Don’t end up with pandemic regret. Use this time to wisely consider your future, either in your first job or in the continuation of your private practice. Take Robin Pau’s suggestion seriously. Reflect. Reimagine. Reset. Then reap the rewards.—Tom Ellis III. 5/1/20. WWW.FirstMEDPractice.com
Scary story: A few years ago I heard about a physician who wanted to open his own office. He had a great patient following, reputation, and didn’t have to deal with a non-compete with his current group, some of whom were retiring (they all practiced under a single Tax ID#). Anxious to set out on his own he found a great location, negotiated a three-year lease and started to hire staff for an opening 60 days out. The office space needed only minor repairs so there would be no delay in taking occupancy and adding all the furnishings and equipment he needed, which he purchased for delivery a week before opening.
For the next few weeks he was busy but was apparently on top of getting the office ready for launch. Staff was hired, software selected, furnishings and equipment purchased, and a marketing campaign underway.
But one month from that date he had a rude awakening:
He had forgotten about credentialing with the managed care payers.
Naïve to the ways of these payers, he mistakenly thought he could just call them up, deliver a new address and start to see their patients as of opening day. He had his new Tax ID# and everything necessary, or so he thought.
Here’s what he heard: 90 days to get on the plans. Maybe longer for some.
Translation: At least 60 days of overhead—rent, staff salaries, interest on any practice loans, marketing, etc.—and NO managed care patients. No charges could be filed with them. No A/R.
Yes, it all does revolve around credentialing when you are setting up a practice, either as a new employee, or as the owner of a private practice.
But it’s also a matter of who is going to provide the credentialing service.
My experience is that credentialing requires a lot more energy than just filling out and submitting the forms to payers. You need to have someone “bird-dog” it, literally from start to finish. Payers are busy, and usually are overwhelmed with credentialing applications, and you have to press them with friendly reminders. Respond immediately to their needs, especially when it comes to getting them all the paperwork they need. Make friendly calls to check in on progress. Ask for completion dates when you can start seeing patients. Be at their beck and call. It’s how you speed up the process.
And it’s best to have someone who knows the ropes. This isn’t a task for an office employee who’s never done it before. Seek out a company or person who has had multiple years of experience. If you have an IPA in your area, seriously consider joining and turning this over to them—credentialing is usually an IPA strength, and they will be able to give you an accurate reading on on-going progress and an effective date you can start billing for patient visits.
And then key everything around those end dates. You want your costs to dovetail with your first patient visits. Be sure to allow enough time for training and move-in, which should be two weeks from your opening day. Minimize non-revenue days.
With the sources at hand today there’s no reason for a repeat of the scary story above.—Tom Ellis, February 2020
Tom is the Founder of www.FirstMEDPractice.com, a platform for fellows, residents and nurse practitioners entering the job market that addresses key business of medicine issues related to vetting job offers and structuring a first practice.
THE BUSINESS OF MEDICINE FOR RESIDENTS AND FELLOWS: Salaries Offers, How They Are Derived, And How To Analyze These Sources
By Tom Ellis/FirstMEDPractice.com blog
In late 2019 Modern Healthcare published its annual Physician Compensation report, a comparison of average compensation ranges as reported by a variety of different groups for 23 select medical specialties. Included were Cardiology, Dermatology, Pediatrics, Internal Medicine and a host of specialties that see patients under a wide range of business models. The salary ranges presented were gleaned from ten different source--a mix of recruitment agencies and healthcare organizations that track this data for their memberships.
For residents and fellows these salary surveys are important, whether you are dealing with hospital attached employers or private group practices. Upon examination you’ll find there can be significant swings in the salaries reported for each given specialty. Analyzing pertinent results for your specialty and understanding the way the information presented has been gathered is important as you consider and counter salary offers as part of your negotiations.
Most employers utilize salary data like this as they compile offers, usually as a requirement of regulations and/or justification for salary offers. It’s important that you understand why there are significant swings in the salary amounts reported by the sources, how to read changes as reflected from the prior year, and how sample size impacts the value of reported data.
For example, let’s look at information reported for OB/Gyns. The top salary was reported by Sullivan Cotter, an organization, and reflects the salary within a group practice of $376,000. That reflected a 2.4% increase from the prior reporting year. Sullivan also reported a salary of $357,000 for private practice, a jump of .34%. The lowest salary was $297,000, reported by recruiting agency Pinnacle Health Group, a 7% increase for the prior year (no mention of whether this was group or private practice).
Let’s break that down. First, let’s look at the change from year to year. The 2.4% change reflected in the group practice salary is significantly more than the .34% change in private practice salaries; the latter might reflect stagnant growth in the private sector. However, the 7% increase reported by Pinnacle is a big jump but means that in the prior year the reported salary was $276,000, far less than what Sullivan-Cotter reported for group and private practice this year or the year prior.
And then there’s the total difference between Sullivan and Pinnacle—Sullivan is almost $80,000 higher than Pinnacle. That’s a difference of well over 20%. Which salary would you prefer?
And it’s also important to know the sample size of those contributing to each listing. You’ll usually find that organizations like Sullivan and the MGMA have a sample size that is significant (in fact, they can usually provide region specific data as well); they pride themselves on giving accurate “national” data. Conversely, the recruiting firms rely on a much smaller in sample size, and report primarily from the placement activity they have had. Which isn’t necessarily a bad thing. Sometimes they have a number that’s higher.
Urology might point this out. Sullivan shows a salary of $497,000, a .72% change upward. But Pinnacle Health group, a recruiter, shows a salary of $210,000, a 51% drop from the prior year. Obviously, there is an issue with their sample size as compared to Sullivan. If your potential employer told you they relied on Pinnacle to set your salary as a urologist, you might want to take a few steps to examine other reporting data!
My read is that, in general, the organizations will report a larger sample size and that usually their data reflects higher salaries. But you have to look at all. Knowing the sample size, and especially where the majority of respondents are located geographically, is important to your analytics. You’ll probably find that certain areas of the US pay more or less, depending on the specialty.
You can also use this data as an example of salary potential. If you’re being offered a starting salary as a urologist of $350,000, current reporting numbers of a $497,000 average imply some significant upside when your practice matures (remember that the salary numbers shown are averages, not maximums).
Finally, if you’re trying to decide on what specialty to pursue, these income numbers may be of help.
There are other ways to slice and dice this information, but you must ask lots of questions about how salary offers are determined when looking at job offers.
Tom is the Founder of www.FirstMEDPractice.com, a platform for residents and fellows entering the job market, that addresses key business of medicine issues related to vetting job offers and structuring a first practice.
THE BUSINESS OF MEDICINE FOR RESIDENTS AND FELLOWS: The Patient Visit, Your Revenue Stream and Metrics Useful in Job Negotiation—PART II.
In the first part of this two part blog I addressed the patient visit, looking at the amount of time spent with patients and how it can be affected by the visit reimbursement. The more money for the visit, the more opportunity to break from the 15 minutes per patient model (I am still unable to find how the 15 minute visit time limit was devised, and if doctors had any input.).
In this second part, I’ll discuss how scheduling affects this, as well as the impact of both on patient engagement and satisfaction.
There’s a non-ending amount of information that has emerged about patient relationships, and the entire patient experience has been parsed into a range of specific topics. “Patient engagement” seems to be the umbrella over these, incorporating all or some depending on the approach. From my perspective, patient engagement starts with the first contact a patient makes with a physician office and ends after the visit(and/or follow-up visits) and patient issue solved.
Scheduling can be extremely problematic. When you consider the time it can take to adequately diagnose a patient’s condition, along with regular problems like late arrivals, more than the allotted time needed for a diagnosis, regular interruptions like unpredicted hospital visits, medical emergencies, procedures or surgeries that run long, etc., it’s easy to see why practices often struggle to minimize or eliminate all of the problems that arise when patients stack up in the waiting room.
Obviously, if you are looking at an average reimbursement per patient visit, easily converted into a revenue/day amount, you are also, de facto, arriving at a revenue per day based on a total time you spend on visits. But there’s more to consider: If, for example, you’re an FP doc, seeing patients all day, you will have some non-reimbursed time spent during the day—the goal should be to minimize this by tracking it, analyzing it, and seeing how to compress it through making it part of your overall daily schedule.
What you’re looking for here is doctor satisfaction: Predictability of how your day will flow! Maximized revenue for the total time you spend working. How can a practice/employer help you improve workflow and still get you out of the office and home to your family? When and how is this reviewed? Who oversees this issue within the practice? And how are they looking at ways to minimize the physical and emotional drain of extensive non-reimbursed time, a major contributor to fatigue and burnout?
This kind of information can be built back into your patient schedule to minimize wait times. There is nothing more detrimental to patient engagement than long wait times. Patients have expectations and have frequently had to schedule much further in advance of their appointment date than they would have liked. Given the importance of social media in your reputation, and your total lack of control over it, you have to address all of this, and keep it on the radar.
Although most patient satisfaction studies ask generic questions about wait and visit times, it’s worthwhile to do more focused analysis with a small patient group. Large studies often don’t really address all of the questions necessary for a practice to get the granular data needed to help. To solve these kinds of problems a ranking system of one to five stars will usually need a higher level of explanation and specificity.
But don’t forget that all of this should be driven by the desire to improve both—patient and doctor satisfaction, with emphasis on efficient utilization of your time. The latter will have a concurrent impact on patient satisfaction (and revenue).
Telemedicine, in it’s infancy, will certainly serve as a balm and possibly a cure to this situation, especially by involving mid-levels in the review of patient records (submitted by the patient) and their interaction by phone to deal with frequent ailments like colds, flu, etc. But it is going to require more clarity from payers and, in my opinion, more definition of the medical protocols. Regardless, you should look for practices that are engaging in telemedicine. And if they are not, ask why. I recently saw an advertisement from a large healthcare system pushing telemedicine of late; the ad read, “You can now eliminate the hassle of visiting the doctor’s office.” This was the first time I’ve seen this kind of diminution from a big player. But it certainly charts the future (oddly, while deriding the value an office visit!).
Of course, there are other important factors in the patient engagement and satisfaction equation. More on those in a future blog entry. ---TOM ELLIS
Tom is the Founder of www.FirstMEDPractice.com, a platform for resident and fellows entering the job market, that addresses key business of medicine issues related to vetting job offers and structuring a first practice.
THE BUSINESS OF MEDICINE FOR RESIDENTS AND FELLOWS: The Patient Visit, Your Revenue Stream and Metrics Useful in Job Negotiations.
Over the past year or two I’ve spoken to a number of physicians who have left their current jobs, transitioning away in variety of directions. Some have moved into the “business” of medicine or joined med-tech firms. Others, complaining about the “corporatization” of medicine have moved to smaller, private practices. And, of course, everyone is aware of the growth of concierge medicine, as well as the steady flow of doctors to Functional Medicine or it’s more wholistic relatives.
Most have come from primary care, IM, or OB/Gyn. All have complaints and issues that led to their decisions. But one reason that has been echoing through medicine for over a decade now (and I always hear from them) is the inability to spend more time with patients. They chafe at the current formula that visits not exceed 15 minutes or less and are worn out by the way this plays havoc on their desire to have real patient relationships and the emotional and physical demands of seeing an average of 30-40 patients a day.
I have tried to find out just who established the 15 minute rule, but there seems to be no evidence or study that supports it (and where did new patient visits and annuals fit in?). More likely it’s one of the holdovers from the HMO days, when employed doctors came under the control of bean counters. If I’m right, you can be assured there was little or no physician input.
For physicians finalizing residency or a fellowship there may not be many options to make significant changes. And income is a major factor with medical school debt to deal with. But don’t agree to anything without doing some shopping and comparisons. You’ll probably see as many as 50 offers, and you have real leverage to get ALL the information you need to make a good decision.
You need to understand the patient visit formula of a prospective employer and go beyond it to understand how this relates to your revenue stream, the scheduling process and the important issue of patient satisfaction. These key components of any practice need to be discussed and fully understood.
Let’s start with the revenue piece. Request the average reimbursement for the top five codes you will use in your practice as well as the payer mix of the potential employer. With this in hand, ask for a history of the average gross reimbursement amount per patient visit over the last 3-5 years. Has it increased? Decreased? Why? What about the payer mix? How has it changed?
Has the practice made any attempt to renegotiate pay rates (this would apply to RVUs as well)? Is there a mechanism to do so within the practice? Is there an IPN or other entity that would provide negotiating leverage?
These questions will give you an idea about a practice’s attention to income. Now ask about costs. What is the cost for the average patient visit? Has it increased or decreased during that 3-5 year term. If it’s increased, what actions have been taken to minimize the increase? Who chases “costs” and is responsible for this extremely important metric?
Your time is the way you generate income. What you want to do, obviously, is to engage with an employer who has a terrific net revenue per patient total. Compare this amount among the offers you receive. What you find may surprise you; for example, it may be that smaller, private practices are competitive and more with the larger employer groups.
And if you have more revenue per patient visit, you may be able to adjust the 15 minute rule upward, and get more time in the exam room to develop the kind of doctor/patient relationship you want. An extra five minutes can be extremely rewarding.
If all is running smoothly, and net revenue is being realized, try to find out what kind of salary or income a full-time doc in your specialty should expect. Compare this to your offer, or the salary your employer projects you can make when your practice has matured.
Scheduling can play a very important role in all of this. And then there’s the issue of how all of this can impact patient satisfaction. In Part 2 of this blog we’ll address these subjects. ---TOM ELLIS
Tom is the Founder of wwwFirstMedPractice.com, a platform for residents and fellows entering the job market that address key business of medicine issues related to vetting job offers and structuring a first practice.
By Tom Ellis/FirstMEDPractice.com blog
Autonomy is a word that has taken on a life of its own in medical circles. Depending on who you talk to, it seems to be injected into the conversation surrounding many different aspects of medicine, clinical to operational to the business thereof. The generic definition always revolves around issues of “control” starting with the most basic: That a physician can implement their diagnoses and control the way he or she cares for their patients. This matter seems to come up more and more as medicine becomes more corporatized.
However, when the desire for control comes up in other areas—especially those related to HR, staff oversight, scheduling, facility usage, payers, marketing, etc.—it seems that physicians may have the cart ahead of the horse.
For over twenty years one of the resounding phrases I’ve heard is, “Doctors are terrible at business.” But I don’t agree.
Physicians aren’t bad at business. They are just UNDEREDUCATED about it.
Physicians are smart people. The rigors of med-school training are intellectually demanding. But there is little or no educational training that provides the basics of how medical practices work as required course work.
I believe autonomy, defined as “control,” needs to be based on education commencing as early as possible, best before the final year of training, when the end of residency or fellowship is in sight. Rounding in the final year is a tremendous opportunity to examine, up close, the variety of different business models employed by different specialties and have access to the administrative types that are responsible for the operations of each practice.
Almost as valuable, it gives the graduates a chance to discuss practice governance and how it’s deals with long range planning and implementation.
Building this knowledge base is necessary preparation for fielding and analyzing the flood of job offers that will soon come. It’s the antidote to the anxiety when literally dozens of employers start making contact (most graduates receive at least 50 offers).
Which brings us back to autonomy. True autonomy comes with knowledge. The path to autonomy starts before entering practice, by having the necessary knowledge to make a good first choice or employer and practicing environment, where business education can continue and be offered and continued. A choice that isn’t filled with anxiety due to undereducation on these topics
In their busy schedules, residents and fellows, preparing for their first practice, shouldn’t overlook the importance of business education. It’s the building block of autonomy and a successful career.---TOM ELLIS
Last week MD Linx published an article entitled “Work-life balance: Will physicians ever find it?” It provided a fascinating comparison between the productive hours of the “average workday” and 40 hour workweek and those of a physician. According to the survey they quoted, the average workday for the average employee equates to only 2.8 hours of “productive tasks.”
Of course those of a physician were huge in comparison, starting with the fact that few physicians I know work a 40 hour week. An interesting comparison was also made about emotional exhaustion and burnout; physicians are affected by this almost twice as much as ordinary workers.
One of the expectations of physicians, as quoted, was that they have the expectation they will “successfully run a practice” including seeing patients, rounding, be on-call, deal with EHR documentation and handle CME requirements. And this list doesn’t include everything, of course. A great point is made that many factors can determine whether or not physicians can handle all of this, and be productive, given the constant distractions and change in workflow.
If those occur, it will take more work time to get everything done, and that means elongated office hours, eating into personal time. The article stresses that this situation can become endemic and destroy any concept of work-like balance.
The article goes onto list 12 “time wasters” that physicians should attempt to corral. This was an interesting list and as I thought about it some of these distractions are the kind of thing new employed residents and fellows should ask about as they evaluate job opportunities that they see in their final year.
As it pertains to physicians about to enter practice, regardless of whether it’s as an employee or venturing into private practice, here were the most contentious listed and that I have seen. These will have a direct impact on the success (i.e., effective use of time) of, as the article says, successfully running a new practice:
More importantly, they will impact the attitude of the physician, and work against the excitement and energy young physicians bring to their first practice. And that might be more harmful than anything. ---TOM ELLIS
A few years ago I was working with a client on a special project at a nearby hospital. They had been hired to take over a major area of patient activity, and a team had been assembled to handle both the transfer of responsibility from the prior contract holder, but also to address a large number of deficiencies that had caused the change.
My client had talked to a number of physicians in the group and assembled a group based on prior experience in these kind of transfers, people who had a significant history with the group and in handling the touchy issues that always arise when a hospital makes big changes like this. Besides dealing with patient care issues, there were lots of minor political issues too.
The five of us assembled had never worked together but some were more familiar with each other than others.
Although we had a few meetings that were highly productive, our time together was compressed.
The client came up with a great idea—they hired a company that provided personality profiles to let us all get a better idea of how we would function together. What was our intra-personal dynamic going to look at? The results were highly illuminating: Some who I thought would be the best team players had a hidden, highly structured independence streak. Others proved to need a leader to function best. Finally, one of the most vociferous of the bunch showed to be painfully shy with people he didn’t know.
The results helped quantify and structure how the personnel would best mix and be assigned to help complete our mission.
Throughout all of this I kept thinking how much the definition of being a physician had changed over the last decade. Not one of the tasks we had touched a patient.
There was an article recently in the NJEM that took up the need for new docs have more exposure to what they called “business skills”—leadership, teamwork and data analysis.
Maybe every physician should take a personality test to see where they fit into all of the many new roles they are being asked to engage in (this excludes all patient activity). Especially since most of this new “business” of medicine is rarely compensated and can be a significant addition to the time spent away from a personal life.
Although I’m no psychologist, I was recommended one platform that looked like an excellent way to start with a personal assessment: The Enneagram.
This is markedly different from the personality test I took, going much deeper for a complete look that would work well for individuals, teams and organizations. The advantages of the individual analysis examine motivation, functional and dysfunctional behavior, compassion, and is focused on increasing productivity and motivation, among other characteristics. The emphasis is on self-discovery, personal awareness and personal discovery. The value to teams is in Enneagram’s emphasis on integration, re-channeling negative behavior, and establishing new avenues for communication. Impressive.
So much so I’d suggest Enneagram as one of the more important aspects of business skills NJEM addressed. It would certainly have relevance to new doctors and old alike, and could be a very valuable part of building strong teams within institutions or practices. Worth checking out.---TOM ELLIS
For graduating residents and fellows the word is out: There are not enough of you to fill the demand for physicians in this country, and this problem is only going to grow over the next decade. No matter what can be done in attempts to adjust this equation—better use of mid-levels, telehealth, the move from volume to value, new med schools opening—no significant change will alter this trend in the foreseeable future.
I recently received an interesting data sheet from the venerable recruiting firm Merritt Hawkins that plotted hospital inpatient/outpatient revenue generated by certain specialties. Not surprisingly, cardiovascular surgery led with $3.6Million, followed closely by invasive cardiology ($3.5M), neurosurgery (same). At the tail end of this list of ten were pulmonology ($2.4M) and non-invasive cardiology ($2.3M).
That’s a lot of downstream income.
Short story: Years ago I worked with two surgeons who had built a strong private practice augmented by an integrative platform that really captured all of their patients’ clinical needs (this was years before integrative had become the buzz word it is today). It was a huge success, almost pioneering for its time. Patient volume shot up.
The hospital really noticed. Soon, in an effort to insure this explosion of revenue, the hospital approached my docs about coming on board as employed physicians, we demurred and started to gather information. Soon we got a good estimate of the downstream net revenue these surgical procedures generated. The hospital was clearly surprised when we presented this data, and we used this number to negotiate salaries far greater than the MGMA income figures presented to us. In effect, we got a little piece of the bigger pie.
So how does all of this come together? There are some obvious touch points. First, in this world of diminishing hospital revenues, physicians with specialties that generate in-patient revenues are going to be absolute necessities for hospital success. Heads and hearts, ortho and gastro will continue to rule. And these types of doctors will be in great demand. Second, with the shortage of physicians growing annually, highly trained specialists will be in great demand. But it won’t just be them. All physicians will be in great demand.
So it this a forecast for the perfect storm, the moment when all these forces combine to give physicians, graduating residents and fellows a new strength and leverage in negotiating relationships with hospitals, ASCS, ACOs and even insurance companies? When doctors finally take back some of the power they’ve given up?
Some larger employers are already addressing this, creating multi-specialty groups where revenues are not just based on the old standard “eat what you kill.” They understand the value of recognizing and reimbursing physicians for their contribution to the total patient revenue picture.
For graduating residents and fellows, I believe the time is now. There is no need to act like a deer in the headlights when negotiating employment agreements. As the number of job offers they field grows from 50 to 100, they have the leverage to really examine potential employers and how they reimburse their physicians and negotiate with hospitals for a piece of the downstream dollars and see how they fit into all of this.
It’s an intriguing time, with many changes on the horizon. All docs should be watching developments, but especially graduates.---TOM ELLIS III
I welcome your comments and thought. Please send to me at firstname.lastname@example.org