Healthcare Reform's Impact on Physicians: What to do NOW!

 

By Todd Perman, CCIM

Like it or not, the healthcare reform train is coming, and there is no way to get out of its way.  As the operator of a busy medical or dental practice, you might be wondering how the new bill will affect your business.  Since the healthcare reform passed in March, I have read many articles on the impact of healthcare reform on hospitals, insurers, patients, and the medical and pharmaceutical companies, but very few relating to the impact on physicians and the steps they should take to navigate this new legislation.  How does it affect your day-to-day operations? Strategic planning?  Reimbursement?  Current and future patient flow?  Patient volume? Growth or expansion plans?  Retirement?  Costs?  Revenue? 

No one can fully answer these important questions today.  Many experts have commented that it will take significant time to understand the total impact of this bill on healthcare professionals.  However, it is obvious that as healthcare insurance becomes more readily available, demand for care will increase. Increased demand translates into additional opportunity--and additional costs and potentially decreased reimbursement. With these factors in mind, what are the key steps you should consider and implement right now to stay ahead of the healthcare bill?

1)      Monitor your expenses, particularly the largest ones.  Moving forward, you should monitor every detail of your budget, including:  billing, collections, labor costs, supply costs, and your occupancy costs.  Fairly consistently, we find that the largest expenses in every practice are labor and occupancy costs (rent).  These costs cannot be eliminated, but you can monitor them and manage any increases or, better yet, take advantage of the existing economic climate and significantly reduce them.  Take control of your expenses and manage them to increase the profitability of your practice.

2)       Surround yourself with experts in business and finance, specifically in the healthcare field.  Attorneys, accountants, architects, human resource professionals, software and technical companies, insurance companies, builders, lenders, bankers, and commercial real estate brokers all specialize and strive to be valuable resources when you face important decisions for your practice.  They have spent years training to help you make good decisions about running a medical or dental practice. Build a trusted advisory team with deep knowledge of healthcare as soon as possible, so you have the help you need to get the right information to make important decisions.  For example, if you need help evaluating and making decisions on your medical real estate, call a healthcare real estate advisor as opposed to a general commercial broker.  A healthcare real estate advisor has specific knowledge of your market, practice norms, build-out needs, space efficiencies, and leasing language that might impact your practice. 

3)      Educate yourself and your team--and always ask for discounts.  This economy provides an excellent opportunity to utilize knowledge and timing to your advantage.  Right now, you can lock-in deeply discounted pricing on supplies, occupancy costs, insurance costs, and anything else with long-term contracts which will save you money both immediately and for the next several years.  If you have an office and/or human resources manager, let them know that you are positioning your practice to save money on everything you buy, lease, or need.  Be proactive with all vendors, starting with your leasing company or landlord, and see a huge difference in your bottom line... 

4)      Review your business plan.  Remember the business plan you developed when you first opened your office? Take time now to re-evaluate it and make it happen! Evaluate your marketing plan, patient flow, referral patterns, billing processes, expansion needs, location, current services, additional potential services, and other items.  Then, review every potential opportunity with your team, strategize about where your practice is going, and uncover what you can implement today.  Your goal is to position your practice for long-term success within this new healthcare environment.

In the best economic times, bad decisions can be hidden by a booming economy.  In a moderate or down economy, it is imperative that you make wise decisions. Spending time today to build a knowledgeable advisory team, closely review your costs, negotiate favorable pricing on your expenses, evaluate revenue-generating possibilities, and explore new opportunities can put your practice on the track to success and greater profit.

These are just a few ideas of how to prepare as the new health plan steams our way.  Healthcare reform can be an opportunity for growth and improvement if you are proactive and plan accordingly.  If you are not on the healthcare reform train, it might just run you over, so make sure you organize your team and position your practice to ride the train to success.

Todd Perman, CCIM is a principal with Healthcare Real Estate Advisors, Inc. a Division of Lynx Real Estate, Inc. The firm specializes in representing physicians and dentists to control their occupancy costs or invest in their facilities. For more information, contact Todd and his team at 404-477-2044, todd@myhrea.com or www.PhysiciansAdvocate.com