Budgeting for your small practice

Do you know how much your independent practice spends on overhead every month? Do you have a clear picture of your monthly revenue? Have you set financial goals for your practice? As an independent physician, you are in the business of helping people become and stay healthy. You are also in the business of keeping your practice healthy. Learning more about budgeting for your small practice will enable you to do just that.

Your practice is a business. Budgeting for your small practice helps you understand how to more efficiently and effectively run that business. Operating from day to day without a clear understanding of your financial situation is like going on a trip to an unknown spot without a dependable GPS. A budget that is properly prepared and reviewed on a regular basis offers useful insights into the financial health—present and future—of your practice.

Budgeting for your small practice involves some basic steps:

  • Keep your budget simple – and useful. What works for another physician’s practice might not work for yours. Your small practice has basic expenses each month and has a relatively stable source of income. Use those to set up categories that are meaningful to you and your practice.
  • Track what you spend your money on, on a regular basis. For example, your categories might include staff compensation and benefits, office rent, equipment expenses, laboratory expenses, and office supplies.
  • Use actual dollar amounts – percentages are relative and may be misleading. It will be particularly important to be able to review dollar amounts for increases or decreases when you look for trends in your practice’s finances.
  • Review your budget monthly or quarterly. Periodically compare your actual expenses and income with your budget then make changes where necessary. Look for numbers that vary from what you expected, determine how much they vary, and then determine the reason. You can use this analysis to act on what you’ve learned and focus on a solution for financial viability.
  • Look for trends. As you review your actual numbers from month to month and year to year (comparing the same months against each other), take note when a category appears to be increasing or decreasing significantly. If expenses are increasing, it might be time to review your suppliers. If income is decreasing, you might need to be proactive in marketing your practice to new patients.

Learn more about a budget-friendly electronic health record (EHR) solution
for your small practice.

It’s never too late to develop a budget. Rick Gundling, CMA, senior vice president for healthcare financial practices for the Healthcare Financial Management Association, relates budgeting for your small practice to preventive medicine. “If you think of a practice as a living body, the budget is like a vaccine,” he says, “Having one doesn’t mean your practice’s health won’t go off track, but the risks are minimized. And when you check in on a periodic basis, that’s like your financial stethoscope.”

Anthony Pappas
March 12, 2020

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How to discuss the cost of care with patients

Patients are facing increasing out-of-pocket healthcare costs and, subsequently, independent physicians are seeing an increased need to discuss the cost of care with their patients. It has been estimated that approximately one-fourth of all patients in the US have trouble paying their medical bills. In addition, research has found that increased out-of-pocket expenses are associated with lower adherence, delayed or missed care, and higher mortality, so a discussion about costs could be critical for better outcomes.

An article published in the Annals of Internal Medicine by Dr. Caroline Sloan of Duke University Hospital and Dr. Peter Ubel of the Fuqua School of Business discusses the need to engage patients more fully regarding the costs of their care, to reduce the financial barriers as well as surprises that patients sometimes receive with their healthcare bills. Dr. Sloan and Dr. Ubel suggest seven strategies to effectively discussing the cost of care with patients:

  1. Ask patients about potential financial hardships. A study of internists found that most relied on clues from their patients that would hint at their struggles with the cost of their care. Physicians should be more proactive in their discussions with patients regarding their ability to pay, rather than waiting to find out a patient is not taking prescribed medications or following care directions because they are too expensive.
  2. Discuss costs. Just as physicians discuss diagnoses and prognostic information, they must keep patients informed about their financial prognoses to enable those patients to anticipate their out-of-pocket expenses.
  3. Anticipate and help patients plan for costs. Direct costs such as medications, diagnostic tests, and procedures can be expensive, but most patients are concerned about the indirect costs of office visits, such as lost income, transportation, and child care. When discussing the costs of care with patients, these costs should be anticipated and planned for as well.
  4. Explore out-of-pocket costs routinely. Physicians and patients will become more comfortable with discussions related to financial issues when those conversations are held more routinely. In one study cited by the authors, patients perceived an increase in cost-of-care conversations (44% to 65%) and a reduction in cost concerns (53% to 36%) when the conversation was incorporated as a routine part of the office visit.
  5. Integrate conversations about the cost of care into your workflow. The authors suggest three strategies for more smoothly integrating the cost conversation into the independent practice’s workflow:
  • Give one person the role of out-of-pocket cost problem-solver, so they can develop expertise and efficiency
  • Use the electronic health record (EHR) to document patients’ financial needs
  • Use the EHR to gather data on costs and/or insurance coverage, when available.

Elation Health’s EHR solution can help your independent practice
communicate with your patients more effectively about the cost of their care.

  1. Enlist the assistance of clinical staff. Ancillary staff can aid in incorporating cost of care conversations into the practice’s workflow as they have more flexibility and are probably better able to relate to the patients’ financial situations.
  2. Include conversations more consistently. Studies have shown that physicians who continue to have cost of care discussions with patients continue to get better at them. In addition, those independent physicians who include these conversations in their patient visits take costs into account more often when they are making medical decisions for those patients.

Anthony Pappas
March 5, 2020

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What are the benefits of independent physicians and practices

Independent physicians who manage their own practices tend to have a closer connection with their patients and experience lower burnout rates. Although independent physicians are considering employment options in larger numbers, overall those providers are typically more content in their own practices. The benefits of independent physicians and practices include:

Autonomy. An independent physician can see as many or as few patients during the day as make sense for the viability of the practice and for the wellbeing of the patient. The patient sweet spot for an independent physician varies greatly, depending on the complexity of the problems the provider needs to address with each visit and on the practice’s finances and infrastructure.

Lower burnout rate. That autonomy contributes to a lower burnout rate among independent physicians. In fact, according to one major study, “13.5 percent of physicians in the small practices studied had experienced symptoms of burnout, compared to a national rate of 54.4 percent.”

Improved level of patient engagement. Independent physicians also have more control over the amount of time they spend with each patient and the communication that happens after hours with those patients. The doctor-patient relationship is significantly enhanced in an independent practice.

Opportunity to collaborate with other physicians. Independent physicians who want to collaborate with other providers, to join forces for the purposes of negotiating contracts, for example, have options available to them. Independent Physician Associations (IPAs) and Accountable Care Organizations (ACOs) give providers group power while enabling them to maintain their autonomy.

Focus on providing quality care, not on corporate priorities. Another major study found that “small, physician-owned practices, while providing a greater level of personalization and responsiveness to patient needs, have lower average cost per patient, fewer preventable hospital admissions, and lower readmission rates than larger, independent- and hospital-owned practices.”

Anecdotal as well as statistical research has shown the many benefits of independent physicians and practices, that contribute to more satisfied providers, successful practice management, and higher quality care for patients.

Anthony Pappas
February 21, 2020

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Finding the best EHR for small practices

Searching for an electronic health record (EHR) solution for your small practice can be challenging. Many EHRs either offer too little or too much, depending on your independent practice’s needs. Finding the best EHR for small practices involves determining exactly what your practice does need and then searching for the most appropriate solution for those needs. While this may seem a daunting process, there are a few key points to keep in mind to make finding the best EHR for small practices a little less challenging.

One of the main considerations for an independent practice searching for an EHR solution is whether that solution will be server-based or cloud-based. For a small practice, a cloud-based EHR is typically preferred as the maintenance and updates are handled by the EHR provider rather than requiring an in-house IT department.

With a cloud-based system, much of the configuring, security and software is handled by the EHR provider, eliminating a significant bulk of the work for the small practice. Since the server is created and managed by the EHR provider, the vendor is more likely to meet HIPAA patient information confidentiality standards, which also makes future expansions of a practice an easy task rather than a complete overhaul of the system.

When tasked with finding the best EHR for small practices, the independent physician may also consider the need for useful features such as e-prescribing and electronically ordering laboratory tests and results. Of course, cost is a major consideration as well for a small practice. The system should provide the efficiency the practice needs within its allotted budget.

A small practice with limited staff does not have time to sit in a training class for several hours and cannot afford any downtime with patient records. Independent providers must ensure that their staff can be easily and quickly trained on the new EHR system and that customer service is readily available when users have questions. Data transfer is critical as well, to enable the practice to continue providing quality care in a seamless and effective manner in the transition to the new EHR.

Anthony Pappas
February 19, 2020

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Independent physicians guide to 2020

Many of the changes that independent physicians can anticipate in 2020 are continuations of policy, regulations, and other challenges faced by both doctors and their patients over the past several years. Healthcare costs will continue to be a concern as will reimbursement and billing policies. A few newer issues of concern in 2020 include the shortage of quality healthcare workers and the patient’s increasing desire to have healthcare provided more conveniently, through the use of technology when possible.

Healthcare costs

Healthcare costs are a concern for patients and physicians every year. In 2020, however, patients will increasingly expect price transparency and about three-fourths of them will look up procedure costs online so they can be better informed about what to expect. Legislation is also being considered that would eliminate “surprise” billing so patients are not alarmed when they receive a bill after treatment. Education is key to help patients better understand and prepare for the costs of their care.

Prescription drug prices are also a major topic for 2020. Several major drug makers increased their list prices on 50 prices at the beginning of 2020. While the Lower Drug Costs Now Act passed through the House of Representatives, its survival in the Senate is seen as doubtful. Independent physicians need to be aware that their patients will be increasingly concerned about drug prices in 2020 and may need assistance with managing their prescriptions.

Value-based payments

For independent physicians who see Medicare patients, there are some changes for 2020. The Medicare Physician Fee Schedule conversion factor increases slightly, from $36.04 to $36.09. This will probably be the last significant increase in the conversion factor as there will be no inflation update in the next six years.

Independent physicians participating in Merit-based Incentive Payment System (MIPS) will face escalating penalties, particularly those who do not report any quality measures in 2020. It will be very important for independent physicians to focus on that quality reporting in 2020 so they can avoid the negative payment adjustment in 2022.

The value-based care movement has impacted payments from many private payers as well, as they see the value in paying for the quality of healthcare outcomes rather than for the quantity of office visits. Experts predict this will be a growing trend in 2020 and beyond.

 Learn more about how physicians can use the data in their electronic health records (EHRs)
to maximize reimbursement and to help patients stay healthy.

 Staffing

One of the challenges that independent physicians may face in 2020 is a shortage of qualified clinical staff. Healthcare professionals, such as nurses, are growing older and retiring and there are fewer younger people filling their positions. One estimate is that the US will need approximately one million more nurses in 2020. According to The American Nurses Association (ANA), there will be more registered nurse jobs available through 2022 than any other profession in the United States.

Convenience of care

Patients are increasingly looking for ways to save money and to use technology for their own convenience. Their healthcare is no exception. Telehealth, connecting with the independent physician via telephone or video calls, is growing in popularity, which creates challenges for the provider who operates in a traditional practice to improve access for patients.

Telehealth has also been recognized by the Centers for Medicare & Medicaid Services (CMS) as a viable alternative for seeing patients, especially younger patients and those who live in rural areas. Telehealth services are included in the 2020 Physician Fee Schedule and CMS is allowing Medicare Advantage beneficiaries to access additional telehealth benefits, starting in plan year 2020.

Anthony Pappas
February 4, 2020

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The development of electronic health records

The question of who invented electronic health records (EHRs) actually has many answers, but the development of EHRs can be traced back to the early 1960s. Traditionally, patient medical records had been kept on paper, in files. Those files were marked with various identifying information, often including the patient’s last name and an ID number, which may have contained part or all of the patient’s Social Security number. Those files were kept in cabinets or on shelves designed especially for medical records.

In the 1960s, Larry Weed, an American physician, researcher, educator, and entrepreneur, developed the Problem Oriented Medical Record. With this, Weed introduced the idea of electronically recording and maintaining patient data. Weed may be identified as the person who invented electronic health records themselves. In 1972, however, the first electronic medical record (EMR) system was developed by the Regenstrief Institute, according to the University of Scranton. Regenstrief’s EMR system was expensive and so was not attractive to physicians for use with their patients. The system was used, though, “by government hospitals and visionary institutions.”

As the personal computer became more common and more affordable, and as the Internet developed, EHR innovations also developed. Web-based EHRs started to emerge. In 1991, the Institute of Medicine (IOM), a division of the National Academies of Sciences, Engineering, and Medicine, led the way toward computer-based patient records by sponsoring studies and reports on the relatively new concept.

Throughout their development, EHRs have been identified by many names, including electronic medical records, computerized medical records, longitudinal patient records, and electronic charts. A Pearson Higher Ed publication states that “in 2003, the IOM chose the name electronic health records, or EHR, because ‘health’ means ‘a state of well-being.’”

The IOM subsequently established eight core functions that should be performed by an EHR, including:

  • Health information and data
  • Result management
  • Order management
  • Decision support
  • Electronic communication and connectivity
  • Patient support
  • Administrative processes and reporting
  • Reporting and population health

According to Pearson, these “eight core functions … became determining factors in the evolution of EHR, and the ability to perform these functions is the criteria by which EHRs are judged.”

Anthony Pappas
January 28, 2020

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What independent physicians need to know about opting out of Medicare

Many independent physicians may consider opting out of Medicare for a variety of reasons. Some cite the burden of reporting requirements while others struggle with the low reimbursement rates. There are considerable regulations involved in Medicare and independent practices may feel overwhelmed with keeping up with the reporting, particularly those participating in the Merit-based Incentive Payment System (MIPS).

The idea of opting out of Medicare, however, causes independent physicians to pause and consider whether it will work for their practices. While they may want to continue caring for elderly patients, they also recognize that Medicare requirements may actually be detrimental to their practices. Centers for Medicare & Medicaid Services (CMS) data shows that the number of independent physicians who have opted out of Medicare has steadily increased since 2013, when 130 physicians opted out. In 2016, CMS states that 7400 physicians opted out of Medicare for their practices.

One option for physicians who choose not to participate in Medicare and independent practices that want to remove themselves from the insurance middleman completely is to shift their operating model. Independent physicians who convert their practices to a direct care model typically do not accept any form of insurance, including Medicare. Instead, they charge a monthly membership fee which is typically adjusted according to the patient’s age.

A major drawback to opting out of Medicare is losing the practice’s elderly patients. Unless those patients are able to pay out of pocket, for example in the direct care model, they will typically search for another provider who will accept Medicare for their care.  In addition, if the decision turns out to not be a good one for the independent physician, the process of re-entering the Medicare world in a financially positive way can be lengthy.

The independent physician who is considering a Medicare opt-out and who currently cares for Medicare patients should carefully calculate whether losing those patients will work well for the long-term success of the practice. Those patients must be informed in writing of the physician’s decision. Other paperwork must be completed, including signed agreements with Medicare patients who decide to stay with the practice. Most importantly, the practice’s billing system must be transformed to ensure that no accidental Medicare billing occurs after the physician has officially opted out.

Anthony Pappas
January 21, 2020

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EHRs and their potential for independent physicians

Electronic health records (EHRs) hold great potential for independent physicians and for their patients. However, many EHR solutions do not offer the capabilities needed for providers to be able to realize that potential. More than just a place to store patient data, an EHR should be the solution that independent physicians and their patients need to stay well informed and to ensure positive healthcare outcomes.

Practice efficiency is certainly one of the potential results of using the right EHR system. In an EHR, patient data is entered and maintained in a manner that reduces errors and duplications. No longer are independent providers or their clinical staff attempting to read someone’s handwriting or searching for a piece of paper in a file folder.

Enhanced collaboration with other providers is another very real potential for independent physicians using EHRs. Providers with patients who see specialty providers, who need lab tests, or who experience stays in a healthcare facility are able to see notes from the other providers in real time, without having to wait for faxes or for records to be sent through the mail. When an EHR enables care coordination through collaboration, the independent physician can see and input updates so that all providers caring for that patient can take action based on the most up-to-date clinical information.

Patient access to their own healthcare record is also a potential benefit for independent physicians. As Michael Dowling, President and Chief Executive Officer of Northwell Health, writes in a recent Forbes article, “When patients know the details of their health and the risks they face, there’s a better chance that they’ll make an effort to change their lifestyle and take corrective action.” Patients who have access to a portal where they can view their health records, test results, and medications, are better equipped to participate in their plan of care.

Though not all EHRs are alike, those that offer these benefits, such as the Elation Clinical First EHR, hold significant potential for independent physicians. As Dowling argues, the potential for independent physicians in an EHR is “a user-friendly tool that integrates artificial intelligence and other emerging technologies that capture and share data that patients and clinicians need and want.”

Chris Anderson
January 14, 2020

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Independent practices and cybersecurity considerations

Maintaining secure patient data is a critical consideration for an independent practice. Patients want the reassurance that their medical information will not be shared with anyone who should not have access. Independent physicians using electronic health records (EHRs) must ensure that those records are not susceptible to security breaches, to reassure their patients as well as for a number of other cybersecurity considerations.

Smaller independent practices are particularly vulnerable to security breaches. Rather than react to threats, however, the more effective approaches are proactive, according to John Nye, vice president of cybersecurity strategy at an IT consulting firm who spoke on cybersecurity during a session at the Healthcare Information and Management Systems Society (HIMSS) Annual Conference in Las Vegas in 2018.

Independent physicians should look for potential areas within their technology systems, to identify and correct vulnerabilities. This could entail contracting with an outside IT firm or even hiring a hacker to determine if there might be breaches in the system. Certified ethical hackers can look at the independent practices systems and try to “break in,” reporting to the physician their findings and recommendations. As cybersecurity expert Nye said, “We have to start looking, and finding, these issues before the bad guys do.”

In addition to patient concerns, the independent physician has the responsibility to protect electronically transmitted patient data under the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted as part of the American Recovery and Reinvestment Act of 2009. Subtitle D of the Act addresses the privacy and security concerns associated with the electronic transmission of health information, including associated penalties for violating patient data security rules.

The Department of Health and Human Services (DHHS) has also published guidance on what to do in case of a cybersecurity attack. The Office of Civil Rights (OCR) lists, in its Quick-Response Checklist, states that a HIPAA-covered entity:

  • Must execute its response and mitigation procedures and contingency plan
  • Should report the crime to other law enforcement agency
  • Should report all cyber threat indicators to federal and information-sharing and analysis organizations (ISAOs)
  • Must report the breach to OCR as soon as possible, but no later than 60 days after the discovery of a breach affecting 500 or more individuals.

Anthony Pappas
January 10, 2020

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How independent physicians are at the crux of value-based care

As front-line providers, independent physicians are well positioned to offer patients value-based care that supports the three-part aim of the Centers for Medicare & Medicaid Services (CMS): better care for individuals, better health for populations, and lower cost. Equipped with the technology to track and maintain patient data, independent physicians are able to provide true holistic care on a more personalized basis.

Shawn Morris, CEO of Privia Health, posits in a recent issue of Modern Healthcare that “Independent physicians and physician groups—relieved of some of the administrative burdens they face in the corporate environment—are empowered to deliver more personalized care experiences for patients and are a linchpin in the search for the quadruple aim: improved population health, better patient experience, better provider experience and reduced costs.”

Technology solutions such as electronic health records (EHRs) enable the independent physician to track patient data in real time and spot trouble areas within the patient population and for each individual patient before those areas become major issues. Independent physicians provide preventative care, ensuring that patients are properly immunized and vaccinated, for example, that could mean the difference in whether a patient may be susceptible to a catastrophic illness.

In particular, independent physicians can use EHRs to holistically evaluate their patient population with a longitudinal record that trends vitals and lab values over time. Providers can quickly identify patients who aren’t meeting goals based on custom care management protocols, Meaningful Use objectives, or specific document tags, and easily schedule a follow-up appointment to address any potential gaps in care. Direct patient engagement is a critical piece of value-based care as well, a piece that independent physicians are able to provide more readily than their employed counterparts may be.

As Morris continues in his article, “independent doctors are happier practitioners than their employed colleagues and less likely to burn out. Studies also show that physician-owned practices have significantly lower preventable hospital admissions. The bottom line is independent physicians are crucial to an effective healthcare marketplace.”

Lynley Norberg
December 9, 2019

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