Health care professionals who have gone through their rigorous medical school education may find themselves ill-prepared for the business side of their rapidly changing industry. Those doctors in small practices whose focus is limited only to practicing medicine could face a tough slog trying to keep their offices afloat in the current climate.
The implementation of the Affordable Care Act, along with an already shifting economic landscape, has so shaken the medical industry that for health care professionals to remain in private practice, a mastery of business skills has become almost a requirement.
The pressure is due to shrinking reimbursements from health insurance providers, expanding regulations, and increasingly complex coding and billing procedures. Learning the fundamentals of business, such as operations, accounting, finance, strategy, marketing and management, are all becoming increasingly necessary for successful small medical practices.
Dr. Jason Hitner, a pediatrician with a private practice in North Babylon, will complete his MBA from Adelphi University this June through a scholarship program through Catholic Health Service. He finds the additional business skills increasingly necessary due to what he refers to as “the commercialization of medicine,” crediting it in part to the consolidation of health insurance providers.
“When I was starting out 16 years ago, there were 16 to 21 smaller insurance companies,” Dr. Hitner says. “Now there are three big ones.”
This market shift has lead in part to the proliferation of what he deems as the “strip mall doctors,” the urgent care centers spreading on Long Island and beyond.
“Private doctors have never had to face this kind of market competition,” says Dr. Hitner. He believes urgent care centers and private practices that have been taken over by hospitals “compromise medicine.”
Being a pediatrician who only accepts new patients who are newborn, he has painstakingly built a practice on long-term relationships with patients and their parents. Yet, with cheaper, quicker healthcare providers moving literally across the street, he has had to become adept at the business side of his practice, keeping staff at a minimum and increasing his practice to be open seven days a week.
Hitner co-founded Allied Physicians Group—a partnership of more than 100 physicians and 500 support staff—precisely in order to preserve private practice medicine across New York State. Each private office acts as a separate division, but shares a centralized back-office administration, such as electronic medical records, and a shared corporate ID number.
“It’s the only way I’ve been able to remain in business the way I want to,” he says. “I’m not leaving medicine.”
In some aspects, doctors are doing what they’ve always done, according to Dr. Ira Nash, senior vice president and executive director of the North Shore-Long Island Jewish Medical Group, as well as a practicing cardiologist.
“Physicians traditionally in private practices have always been kind of entrepreneurial,” Dr. Nash says. “They’re small businessmen in addition to being physicians.”
But the world of medicine has certainly changed, especially for the solo practitioner, he agreed, and they’re not alone.
“Just like being the guy who runs the corner stationery store or the corner grocery store has gotten harder in a world of Staples and Whole Foods, the ‘mom and pop’ medical practice has gotten harder in much the same way, too,” Dr. Nash observes.
Part of the pressure comes from changes in reimbursement rates as well as new regulatory requirements from a host of insurance providers on how well the medical practices are performing.
“There’s no question that being a successful practitioner in the sense of running a successful practice as opposed to being a good doctor has gotten more complicated and more challenging because the complexity of the whole relationship between payers and providers is a lot more complicated,” says Dr. Nash. “It is just a more challenging business environment for the practice of medicine.”
An especially complicating factor facing today’s medical practices is that the healthcare insurers have different standards of defining quality patient care, according to Dr. Kristofer Smith, vice president and medical director for North Shore-LIJ Care Solutions, the health system’s care management organization.
“I think if we don’t find a way to create synergy among all the different payers, we will create something that’s so ferociously complicated that we could potentially erode quality because there will just be too many things to try and perform towards,” Dr. Smith says.
For example, he says that prescribing generic drugs is a priority for patients covered by Aetna, whereas providing preventive vaccinations is a priority for Medicare Managed Care, while Medicare fee-for-service requires that measuring patient satisfaction be paramount.
In practice for a decade, he’s seen a lot of programs improve in their quality of patient care, but he’d like to see the “payer industry,” as he put it, agree on one “core set of quality standards.” In the meantime, small practices are going to feel the pressure most intensely.
“One or two really bad patients could blow up your whole profile of quality care,” Dr. Smith says. “You’re going to have to find ways of aggregating patients, and that’s going to come through consolidation of hospitals and physicians.”
To Dr. Michael Oppenheim, vice president and chief medical information officer at North Shore-Long Island Jewish Health System as well as an infectious disease specialist and assistant professor of medicine at Hofstra North Shore-LIJ School of Medicine, “the average Joe or Jane Doc” won’t be getting an MBA any time soon because getting their MD defines who they are.
“For the most part, medicine is still medicine,” says Dr. Oppenheim, “and whatever passion drove them into it is keeping them focused on that—and [they’ll be] relying on the help of others to help them navigate the morass.”
For Dr. Hitner:
http://alliedphysiciansgroup.com/
For Adelphi MBA for physicians:
http://drvc.org/2013-press-releases/catholic-health-services-adelphi-partnership-graduates-new-wave-of-mba-physicians.html