Physicians should rethink their revenue streams
Consider total value
Sometimes an ancillary doesn’t provide much return at all, but helps patient care run smoothly or saves administrative time.
John Bender, MD, FAAFP, chief executive officer of a 25-provider, multi-location primary care practice in Fort Collins, Colorado says he still offers lab services, but also provides services with higher reimbursement rates or margins, such as mammography, aesthetics, dietician and other services.
Even though he might not be reimbursed fully for blood draws, he calculates that when labor savings are factored in, he’s better off doing the draws in-house. Moreover, he says, the quick turnaround is better for patients.
“If a person comes in and 15 minutes later I have lipid results, now it’s a more effective conversation to talk with him about getting serious” about improving his health, says Bender.
“As a business owner, my biggest overhead is not supplies and equipment but staff,” Bender adds. “We found that if we just ran the cell count in-house, now it took us literally five minutes to get the blood and look at the result and we’re done.”
If the numbers look good, don’t waste too much time debating, Zetter says.
“Chronic care management is a big thing right now, where you get a fee for each patient you are monitoring, but you have to be first in your market to get in there and do it,” he says, noting that specialists can offer these services and sign up patients for these programs.
“There’s so much more revenue there if you really want it, but it takes work and planning.” Generally, chronic care management programs will generate $40 per enrolled patient per month, experts say.
Whichever service physicians decide to add, don’t commit to overly burdensome supply costs, experts advise. Most equipment and services can be rented, where a technician comes with the required device on a schedule that conforms to the level of the practice’s demand, rather than leasing a product 24/7 for a given period. There will be finance charges in the lease, but depending on patient volume, leasing may make sense, particularly in the startup phase.
Testing the waters in this way will allow a practice to experiment with an array of services, Berg says.
Above all, stay flexible, experts say. “Pay attention, because it’s all subject to change,” Fabrizio says. “Whatever is gravy today might be out of favor next year. You might have a reimbursement commitment for a year or two, but nobody is bound to cover a service forever.”