Understanding Cash and Ancillary Income Strategies

Understanding Cash and Ancillary Income Strategies

"It has put life back into our practice. I used to dread coming into the office. Now, I feel totally re-energized." Such were the words of a Scottsdale, Arizona physician when talking about integrating cash and ancillary income strategies into his practice. We have written repeatedly that survival in private practice medicine in the future healthcare system depends on the ability to move away from third party reimbursable services to cash and ancillary income. It is crucial that practice managers get familiar with these strategies and consider what can work best in their practice.

What are cash and ancillary income strategies?

"Cash medicine" strategies refer to two categories of services: 1) healthcare products and services that are purchased by patients but not reimbursable by insurance, for example nutritional supplements, laser pain therapy, etc. 2) services that ARE reimbursable however, the practice has chosen to accept cash only and not offer any insurance billing for the patient. This also includes what is referred to as "concierge medicine".

"Ancillary income" refers to services typically reimbursable by insurance that the physician refers to outside vendors such as Durable Medical Equipment and pharmaceuticals.

What are the most popular strategies to consider?

There are a number of strategies gaining in popularity and proving to be effective for the patient and for generating practice income, including:

Lifestyle Medicine: This includes offering nutritional supplements, nutrition counseling, weight management, exercise programs, etc. There is a huge push in healthcare reform to encourage physicians to offer preventative services. Billions of dollars are spent each year by consumers on these services. Physician offices are ideal locations to offer lifestyle medicine.

Laser therapies: Utilizing laser devices for pain management and injury treatment has proven effective. It has been demonstrated that patients are willing to pay out of pocket for the services. It is one of the fastest growing areas of cash medicine.

In-Practice Durable Medical Equipment (DME): Most physicians refer patients to outside vendors for DME. New programs are available to enable physicians to offer DME within the practice and comply with regulatory requirements. Patients prefer the convenience of obtaining the equipment from their physician.

In-office dispensing of pharmaceuticals: Numerous systems have been developed and simplified to help physicians track inventory and manage the sale of pharmaceuticals within the practice. Ill patients avoid a trip to the pharmacy and patients report they are willing to pay more for the convenience.

Cash and ancillary income strategies are one key to survival in private practice in the future healthcare system. Practice managers can prove their worth by advising doctors on strategies that will fit best for the practice.

visit http://www.practicemanagerlife.comfor more information.

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