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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5 Comments (and one trackback)
#1 by Nicholas Tsambassis, M.D. on December 7th, 2010

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The administrative “talent” to which you refer is out of the financial reach of practices still struggling to break even in the era of inadequate reimbursement.
#2 by Marian Davis DPM on December 8th, 2010

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I agree with the statement above. Unfortunately, a small business has to try to cut down it’s expenses to be able to compete and stay in business. Now, Physicians will have more volume for probably close to the same pay and so still there is no real answer on how doctors are expected to become high tech, pay out sourcing fee for more qualified assistants as well as keep their employees in the office to deal with thevincreased volume.
#3 by Fred Roh, EdD on December 8th, 2010

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The answer lies in outsourcing…there are numerous new \shared services\ models out there now where physician offices can team up with other doctors and small businesses to handle administrative functions. By restructuring your staffing and using the right form of outsourcing, you can get much higher quality help for about the same price or less. A physician practice is too complex and too risky to be left to under-trained people.
#4 by Chris Carraway on December 8th, 2010

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“Outsourcing to specialized firms will become the norm.”

I agree. My stafff is going nuts trying to keep up with all the new regs and rules. I can’t not keep up with them and it makes me physically ill to read all the garbage rules that are being born.

I am not ready to outsource yet. All the ones I have seen that do this type of work are fear mongers. I have gotten some news on a new rule or reg that put fear in my heart and made be wonder what tomorrow would bring….only to find out that they were overstating, as a fear tactic, to drum up business. That turns me off severely.

A reliable clearing house for clear clean cut UNDERSTANDABLE insight to the 4,000 new regs and rules would be a welcome thing.
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#5 by Linda Seim, DC on December 11th, 2010

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I read a news “ticker” the other day on TV that said that 75% of doctors will retire, quit or cut back next year. The cause is paperwork, decreased reimbursement, etc. Who will be left to treat patients? Hope and change?