subject: The "New Rules" for Survival for Physicians in Private Practice - Part 2 in a 4 Part Series [print this page] The "New Rules" for Survival for Physicians in Private Practice - Part 2 in a 4 Part Series
In Part I of our blog series, we explained the "New Rules" for physician compensation based on the post- reform healthcare system. As we stated, physicians are at the epicenter of one of the most dramatic periods of change in America's healthcare system. The rules and strategies for physician success are changing rapidly, and most physicians are struggling to understand it.
The U.S government has made their claim on the American healthcare system and offered up their requirements for physician change, as put forth in the Annals of Internal Medicine, noting "physicians will need to embrace rather than resist change". Change is inevitable. Now, physicians will need to decide what they will change into. Will you become the physician our government wishes you to be or will you forge a new path to capitalize on these changes for your own career path? Regardless of your choice, you will need to understand the "New Rules" and change the way you think and practice.
This is the second in a four-part series of blogs that will discuss the new rules for physician practices on four dimensions of physician life:
Physician Compensation
Managing a Private Practice
Changing Patient Demographics and Attitudes
Physician Career Satisfaction
This article will focus on the "New Rules" for managing the administrative side of a healthcare practice.
Managing a Healthcare Practice
Old Rule: Managing a medical practice could be handled by administrative people with general administrative skills.
New Rule: The complexity and risk of managing a medical practice has skyrocketed, requiring highly specialized expertise. 4,000 new regulations per year are created that affect physicians. Physicians cannot find the required level of expertise in one or two administrative persons. Outsourcing to specialized firms will become the norm.
Old Rule: Doctors could get away with being "low-tech".
New Rule: Patients, insurance carriers and the government will expect physicians to be high-tech. Physicians who are not high-tech will be limiting their income and value to patients and become employees of systems that are.
Old Rule: The billing function of a medical practice could be performed by regular administrative staff.
New Rule: With unintentional billing fraud on the increase, identity theft running rampant and regulatory fines on the increase, physicians must ensure that their billing is done professionally by certified coders with multiple layers of protection in place.
Old Rule: A healthcare practice was not considered a "business".
New Rule: Structuring a practice around sound business principles and an understanding of healthcare economics will become increasingly important in order to survive. Those physicians who run their practice on business principles will survive. Those who don't will be absorbed by those who do.
Old Rule: The duties of contracting with payers could be handled by the regular administrative staff.
New Rule: Contracting will become increasingly complicated from a legal and business point of view, requiring specialized expertise. Outsourcing the contracting function of a practice will become more prevalent. Additionally, for those practices getting into "Retail Medicine", expertise will need to be acquired for pricing and packaging of services.
Summary
The administration of healthcare practices has become increasingly sophisticated. The vast majority of practices and administered by under-qualified and under-trained staff. Physicians are reluctant to pay for the level of talent that the practice requires. The post-healthcare reform system will increase in complexity. Success of physician practices will depend largely on the talent managing it.
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