As nursing home residents slowly took their seats and adjusted their oxygen tubes before his presentation, urologist Neil Baum, MD, realized he needed to change his approach.
"The last thing they wanted to hear about was a talk on sexual dysfunction," says the New Orleans physician. "I'm a magician, so I asked for a deck of cards and I did magic tricks."
But his ad libbed presentation wasn't for naught—one of the nurses took Baum's card and sent him her mother.
Giving speeches to local groups is just one of the ways you can reach out to potential patients without embarking on an expensive marketing campaign. Often, getting your practice's name and expertise out in the community is more beneficial than a billboard.
Writing articles
"The best way for a practice on a low budget to reach out to the public is writing articles and public speaking," Baum says. "Writing articles is not expensive. It does take a little bit of time for the doctor or staff to put together, but most publications are eager to hear from physicians."
Publications that may publish health-related articles include:
Local newspapers
Local magazines
Health and fitness publications
Blogs and Web sites
Giving presentations
Providing and collecting contact information is also important when speaking to a local organization, Baum says.
"If I give a talk to an [AARP] group, I get their e-mail addresses and I continually send them updates about what's going on in my practice and what's new," he says. "Constantly keep your name in front of them in a positive fashion and doing it frequently is the best way to keep the public engaged and knowing that you exist."
Organizations that may welcome a physician speaker include:
Service clubs, such as the Rotary Club, Lions Club International, and Junior League
Church groups
Crowds at local fairs and block parties
Large employers
At the end of the presentation, it's important to take questions and give the audience a way to get in touch with you. These talks may not always result in immediate business, but attendees will be more likely to remember you down the road when they have a medical problem that you addressed. Baum says he recently saw a patient who had remembered him from a presentation 10 years ago.
Pounding the pavement
Huron Medical Group, a Cleveland Clinic practice located in East Cleveland, practices patient outreach by integrating its efforts within the community.
"We've looked at innovative ways to do this because we have a lot of challenges that we face in the community that we serve," says Michael O'Connell, MHA, FACMPE, vice president of operations and physician services at Huron Medical Group. "A large portion of the patients we care for live below the poverty level, and a significant proportion of the people we care for have diabetes or other chronic diseases. We also have the second most penetrating trauma patients in the state of Ohio, so we have a lot of gunshot and knife wounds."
Huron talks to patrons in barber shops, holds a free breakfast with Santa for children, runs a program for at-risk youth, and constantly visits fire stations, police stations, grocery stores, and libraries to keep the community informed of its services.
"We go out to barber shops and we go out to beauty parlors and we give information to them and they do screening there, and it's a great way for people to come together," O'Connell says. "It's been great to be able to do something like that. It really doesn't cost us any money—it means getting some commitment from beauty parlors and barber shops to do something like that."
Creating a great experience
Of course, one of the easiest ways to keep patients coming in is to provide a friendly, efficient experience for your current patients.
"Make sure you take outstanding care of the patients you got because they go out and talk," Baum says. "Each patient knows several dozen people that they can talk to about their healthcare problems … so if you take outstanding care and you're known as a compassionate, caring physician . . . if that word gets out there, there's not better marketing or practice promotion than good word of mouth."
It's also important to be inviting when you're giving a screening or seminar, O'Connell says. Huron often gives participants relevant takeaways, such as gift bags filled with body wash, lip balm, soap, and a pedometer.
This article was adapted from one that originally appeared in the March 2010 issue ofThe Doctor's Office, a HealthLeaders Media publication.
The introduction of President Obama's healthcare reform plan has once again stirred debate about how to move healthcare delivery into the future. The outcome of reform remains unclear, however a likely outcome is that physician reimbursement and compensation will continue to shrink for all specialties, and that any reform model enacted will result in a healthcare delivery system that will make smaller payments to physicians per increment of service provided.
The winners in the new system will be physicians who effectively collect patient data through an electronic medical record system, can demonstrate quality, and have the tools to seize control of a larger share of the healthcare dollar. Physician organizations with little access to capital, professional management, and data will lose out to practices that have access to current technology as a result of better capitalization and management.
In the healthcare delivery system of the future, it is anticipated that virtually all physicians will either be employed by hospitals or part of a large consolidated physician group. With rare exceptions, physicians will not be able to consolidate into large groups without assistance from business and capital partners. These environmental changes could create an opportunity for the resurgence of the physician practice management, or PPM, model.
What Is the Physician Practice Management Model?
Historically, many states have prohibited non-physicians from having ownership interests in physician practices through Corporate Practice of Medicine Statutes. As a result, physician practices have not had the same access to capital or business acumen as other healthcare businesses. The practice management model simply brings these advantages to bear on physician practices in a manner that is compliant with state corporate practice of medicine statutes.
In the typical model, a physician practice management company (the PPM) acquires all of the tangible assets, other than real estate, associated with a physician practice. The PPM then employs all of the personnel associated with the practice other than the physicians and certain clinicians who, under applicable state law, must be employed by the practice. The PPM provides all of the personnel and assets necessary to operate the practice in exchange for a management fee that includes reimbursement of the PPM's costs. In this regard, the PPM functions primarily as a capital partner to provide the capital necessary for the practice to expand, invest in ancillary services and information technology (including an electronic medical record system), and/or consolidate a market. The capital, plus interest, is repaid to the PPM through a management agreement.
The PPM runs the day-to-day business operations of the practice, and physicians are solely responsible for the clinical aspects. Each physician typically has an employment agreement with the practice that includes non-competition and non-solicitation provisions, to the extent they are permissible by law. Many states have statutes or case law that limit the enforceability of physician non-competes. The laws of each state must be analyzed to determine whether any non-compete is enforceable.
The PPM is paid a management fee in addition to being reimbursed for its costs. The amount of the fee depends upon the structure of the relationship, as well as the services provided by the PPM. In the original practice management model, the PPM also acquired, in exchange for a fair market value purchase price and to be paid as part of its management fee, a percentage of the profits of the practice before physician compensation ("Profit Share"). The Profit Share structure included in the first generation of physician practice management arrangements is the principal reason the industry failed.
Why the Industry Failed in the Past
In the late 1980s and early 1990s, first-generation physician practice management companies like PhyCor and MedPartners used a model in which the typical management fee consisted of the following:
Reimbursement of the PPM's cost of providing the assets and personnel to the practice
Profit Share of 15% of the practice's profit before physician compensation
Up to 50% of any profits recognized by the practice as a result of new ancillary services financed by the PPM and any "profit" resulting from capitated HMO products.
The PPMs not only paid the practice for the tangible assets acquired and, in effect, leased them back to the practice through the management agreement, but also paid the practice a multiple of projected Profit Share. A portion of the purchase price was paid at closing, and the balance was typically paid over a two- to three-year period to prevent any decline in physician compensation during that time.
The model assumed that the overall profitability of the practice would grow under the revised management structure so that the physician's compensation would not decline even after payment of the Profit Share. The assumption of practice profitability growth was initially built on the theory that all healthcare expenditures would ultimately be on a capitated model. However, the healthcare delivery system did not, except in California, evolve to a capitated model.
In addition, physician productivity often decreased after the practice sold out to the PPM. As a consequence, physicians saw a substantial decline in income after the income supplements had been paid, and the practices were not only unable to retain existing physicians but had a competitive disadvantage in recruiting. As a result, the PhyCor and MedPartners model failed.
What Have We Learned?
First and foremost, it is clear that a model that decreases physician compensation, absent an increase in profitability of the physician practice, is not a viable long-term strategy. . The model must be, at a minimum, cost neutral to the practice and the incentives of the PPM and the practice must be aligned. In the first generation of physician practice management models, the PPM did not provide any true centralized revenue cycle management function or materials management/group purchasing function. Under the new model, the PPM must provide these services.
Instead of the PPM receiving a Profit Share as a component of the fee, the fee could be based on a percentage of net revenues that is equal to the cost savings to the practice from the PPM providing revenue cycle management, materials management, reductions in salary and wages, and benefits costs. The management fee should also allow the PPM to share in the incremental profits recognized by the practice, other than from providing professional services. The PPM will continue to be reimbursed for costs and capital incurred on behalf of the practice.
What Are the Opportunities?
There are a number of profit opportunities that can be driven through the consolidation of a substantial number of physicians into a large physician group that has significant market share in a given region. Opportunities for physician groups include: (i) controlling and profiting from the revenue streams, (ii) improving revenue streams through demonstrated quality, (iii) development and commercialization of protocols, (iv) disease management, (v) clinical trials and genetic testing, (vi) pharma economics, (vii) developing and operating employer clinics, and (viii) developing enhanced ancillary services.
In order for physician practice management organizations to rise from the ashes there will, however, have to be sufficient returns on the capital invested in the physician practice management company. Whether there are sufficient returns in a broad-based physician practice management company remains to be seen. Early results in companies that focus on a segment of the opportunity (e.g., employer clinics, enhanced ancillary services, disease management and billing and collection) have been promising, and logic dictates that combining those revenue models with a critical mass of physicians who can exercise market power can be profitable.
Investors will, however, have to appreciate the differences in the opportunity, as well as key differences in the model, to move past the physician practice management failures of the past. Whether investors can do so remains to be seen.
Michael E. Collins is chief executive officer, managing member and founder of 2nd Generation Capital, LLC, in Nashville, TN. He may be reached at mcollins@2ndgeneration.com. Beth Connor Guest is a partner with the law firm Waller Lansden Dortch & Davis, LLP, in Nashville, TN. She may be reached at beth.guest@wallerlaw.com.For information on how you can contribute to HealthLeaders Media online, please read our Editorial Guidelines.
President Obama made an impassioned case in Missouri Wednesday for his healthcare proposal, delivering a partisan argument for reform as industry groups prepare a multimillion-dollar advertising campaign to defeat it, the Washington Post reports. During the speech, Obama criticized his Republican opposition, Washington's wasteful spending, and rising insurance premiums. Obama is visiting media markets that touch multiple congressional districts, and intends to lobby wavering House Democrats to vote for a Senate version of the legislation and to support the subsequent reconciliation process, the Post reports.
A National Institutes of Health advisory panel said that vaginal birth after caesarean is reasonably safe and should be more widely available. Such deliveries once accounted for 25% of U.S. births among women with a previous caesarean delivery, but have now fallen to less than 9%. Many women would like to attempt a vaginal delivery, however, and the panel's consensus statement is expected to increase their access to the option. The panel, composed of independent experts in maternal and child health, found that although both VBAC and planned, repeat caesareans posed a range of risks and benefits, women should be allowed more choice.
WebMD launched its social networking feature, WebMD Health Exchange, on Tuesday. It says the health social networking platform will allow consumers to connect with health experts and other WebMD members to exchange experiences, receive answers and support, and discuss personal challenges.
St. Jude's Research Hospital and Susan G Komen for the Cure ranked among the top ten trusted brands, according to EquiTrend, a new study by research firm Harris Interactive. The brand equity study measured more than 1,000 brands across 42 categories.