This Week’s Top Practice Trend-Making the Move to Cash Medicine
“Regrettably”, said the medical device rep to the M.D., “there isn’t a good code for this. It’s not reimbursable.” The physician quickly responded, “Good. Once it gets a code, then my compensation goes down.” What? No code? Non-reimbursible is a good thing? This statement reflects the growing trend among physicians to implement cash medicine in their practice. Here’s why. Multiple forces are converging to drive this change.
1. Declining reimbursements. The cost of healthcare reform will just make things worse for physicians. Someone has to pay for it and doctors are first on the list.
2. Increasing overhead. Physicians are growing weary of paying the escalating cost of red tape in their practice.
3. A growing trend for patients to pay cash for healthcare services. (Just look at the amount of money spent in the U.S. on supplements and alternative medicine.)
4. The desire for one-stop shopping and convenience at the physician’s office. Chasing around to pharmacies, testing centers, labs, home health agencies, etc. is not a desirable way to spend a day.
Numerous strategies are gaining momentum including: Concierge medicine, aesthetic medicine, nutritional supplements, medical enhancements, and cash for traditional services.
I recently spoke with a very large orthopedic group (that generate $35 million in revenue per year) who is positioning their practice to be 30-40% cash in the next two years. They have a published fee schedule for ACL’s, knee and hip replacements. They’ve tested it and believe it will be more profitable for the practice.
Still, many traditional physicians are uncomfortable with the idea of going cash. Nearly all doctors hate the third party reimbursement system, yet have come to believe it is part of the natural order. All physicians, though, are interested in how to increase cash flow in the medical office. As with anything, there are problems of a cash practice. Numerous policies need to be put into place, including new contracts for cash patients. We believe the trend is here to stay. However, for many physicians, doing business as usual is all they know and it will take increasing pain for them to change.
PhysicianTrends is here to help you learn what’s going on in the business of medicine. We will continue to track what is working and why. We want to here from you. Give us your ideas and feedback….
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