Medical Consulting: Can my Practice survive - day 3
Posted by Lin Dworshak on Wed, May 11, 2011 @ 10:43 AM
In our last two blogs, we have considered some essentials of practice behavior that will determine whether the private practice as we know it today can survive the current health-care climate. These essentials include financials, office staff and physician productivity. Today, we will reflect on the options open to practices today after determining the metrics of your practice.
In a nut shell, your practice viability depends on 4 critical imperatives.
controlling market share
demonstration of quality
access to capital
productivity
Integration with a hospital carries with it risks and rewards. Understanding these and knowing the hospital metrics is key to finding a rewarding relationship. Hospitals have much to gain from bringing physicians and groups into their organizations. It enables them to have a secure market share of business by "owning" the primary care and specialists that will be admitting to their facilities. They also make some common mistakes that may affect your future as a provider. In their enthusiasm for acquiring practices, they may over-build and over-pay new providers which at some point will have to be addressed and corrected. By adding to employment and occupancy costs they must pass that cost along to patients or reduce services; neither option is acceptable.
As hospitals "do business" differently than practices, they tend to misunderstand the "retail" side of business, and often have inadequate management expertise and management tools. Their approach to health-care business was sufficient as a facility; but as an owner operator of practices, new strategies and tools must be implemented for them to be successful. All conversations with hospitals must include conversations about the above mentioned and not be limited to financials. Hospitals tend to disengage providers form goverance which translates to providers as "loss of control". Be aware that aligning with a hospital may alleviate your temporary concerns; but may not be able to deliver you the kind of support, compensation, control and management you may be used to.
On day 4 of this subject, we will summarize and propose alternative solutions.