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The Business Side of Medicine: Everything You Need to Know

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The role of the physician within the business side of medicine is rapidly evolving. The complexity of treating patients and running a medical practice has increased. Keeping pace with technology adoption, policy changes, and emerging new payment models highlight the need to focus on effective operations in a medical practice. Balancing the art, science, and business side of medicine has become the new normal for any physician, whether you run your own practice or work for a hospital.

Many med school grads want to open their own practices – but don’t know where to begin. Here’s a quick overview of everything you need to know to get started.

Understanding Healthcare Today

Healthcare has changed significantly over the last few years and therefore, so has the business side of medicine. Previously, most doctors operated under a fee-for-service (FFS) model where they would perform services and then receive payment. Now, policymakers are shifting away from the FFS model towards a value-based care approach, where physicians are paid based on patient health outcomes.

Value-based care focuses on the quality of patient care rather than the number of patients seen. Its goal is to provide better care for individuals and to improve population health while lowering costs.

Value-Based Care is Backed by Healthcare Policies

The implementation of value-based care lies in a variety of health policies. It impacts how physicians work and get paid more than ever before. Below is a list of health policies that impact independent practices the most:

New Practice Models

As a result of these healthcare policies and shifts in medicine, new practices models are emerging:

  • Accountable Care Organizations (ACOs): These organizations split the cost of healthcare between doctors, hospitals, and other healthcare providers. These groups come together voluntarily to provide coordinated, high-quality care for Medicare patients.
  • Independent Physician Associations (IPAs): These associations allow providers to remain independent while enjoying the benefits of being part of a larger business entity. IPAs help independent physicians’ contract with third parties to pursue business ventures and reduce overhead costs.

Independent Practices

State of Independent Care

Despite what the media reports, not all private practices are becoming victim to healthcare consolidation. Just under half of all physicians owned their practices in 2016, which is only slightly lower than in previous years. These practices are focused on providing high-quality care and building strong relationships with their patients, even with new administrative burdens.

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Healthcare is personal and intimate. Patients trust doctors to provide a very important service and staying independent allows physicians to spend more time with each patient. They also have additional freedoms like:

  • The ability to work within all types of health systems
  • The ability to offer a variety of treatment options
  • The ability to refer patients to any other specialist provider

The network that is created by independent physicians provides patients with a huge range of health professionals to select from for whatever they need – instead of being limited to a single corporation. This means that patients can always get the best care possible.

Recent studies reaffirm the idea that independent practices provide the most cost-effective and high-quality care.

Running an Independent Practice

There are a lot of components to consider when it comes to running an independent practice. Here are a few tips and tricks to help you keep things going smoothly:

  • Utilize technology: Finding the right tools to support your practice is critical to long-term success. Specifically, an electronic health record (EHR) system can streamline physician workflows and ultimately give doctors more face-to-face time with patients, instead of screen-time filling out notes and paperwork.
  • Find personable staff: The right team keeps things running smoothly and is the first impression of your practice. Make sure your team is trained in necessary medical office tasks and customer service to provide everything patients need before seeing the doctor.
  • Encourage patient engagement: Engaging with patients is an important component of providing high-quality care and is more than just conversions in the office. Engagement includes supporting the patient with their care plan outside of the office from following up on progress to communicating test results.

Run a Thriving Independent Practice

With the right tools and team plus an understanding of the business side of medicine, you are set on the right path towards a thriving career as an independent physician. Taking the time to review the administrative principles will allow you to focus on providing exceptional patient care in the future.

At Elation, we understand how running a successful practice while providing patient-centered care can feel overwhelming. We’re dedicated to developing resources and tools to make the long-term success of your practice feel manageable while providing phenomenal patient care.

For more details on how to run a successful independent practice download the complete eBook, The Business of Medicine.
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