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.