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The Re-Engineering of the Medical Practice Print E-mail
Written by Lawrence Schimmel, M.D., FACS   
Saturday, 07 January 2012 16:55

It has taken a long time but many physicians today finally realize that their medical practice is a business and that the services they provide is the product. We as physicians feel that what we do is “more than just providing service”; however our ability to practice is determined by the business conditions we face on a day-to-day basis. The issues physicians face can be divided primarily into revenue generation, management of expenses, enhancing market share and improving efficiency while maintaining quality.  Market conditions, technology advances and items outside of our control have a direct impact on how successful the practice can be and directly correlate with the bottom line. Physicians are creatures of habit and change is something that is difficult to embrace; but to run a successful business you must adapt to the changing circumstances affecting the practice of medicine. Simply put, you need to continuously re-engineer your business model (practice) to succeed in the healthcare world we live in.

Revenue Generation: Traditionally physician revenue was solely derived from the providing of medical services and receiving reimbursement from insurers, the government, or the patient. In a declining reimbursement world, more services are required to maintain the total revenue a practice generates requiring more patients to be seen with less time to see them. The frustration of working harder for the same or less money is very discouraging. Therefore, to succeed additional sources of revenue need to be found. Each specialty has things that can be done to enhance revenue and provide a value added to your patients. Revenue enhancement via pharmacy dispensing services, sale of items that patients traditionally purchase elsewhere, diagnostic testing, and services that are not reimbursed by insurance are items that each practice needs to evaluate as a way of enhancing practice revenue. 

Management of Expenses:  Physicians are creatures of habit but we need to evaluate all aspects of our l practice and adjust to the times. All businesses today are evaluating their space needs as well as their personnel needs. We should have the right amount of space to practice and the right number of employees so that revenue generation per employees is as high as possible. If you find that you have too much space, subleasing to another practice is a smart way to offset your operational costs.

There are additional costs associated with electronic records and if we do not change the way we operate our bottom line will be reduced. There is no question that the staffing needs will change but rather than adding employees, a re-alignment of employees with different skill sets will negate the need for additional employee expense. Physicians are often asked, what is your cost to collect? If you analyze all costs associated with the billing process you will be amazed at what it really costs to bill and collect your funds. Is there a better way to do it?  Businesses hire consultants to evaluate processes, identify inefficiencies, and show them how to increase the bottom line. In this environment, there is no question medical practices should do the same.

Enhancing Market share:
The number of patients you treat is directly related to your gross revenue.  How to enhance the mix of patients will allow you to earn more without having to see additional patients. Every office needs to determine how and if they can increase the number the higher reimbursed patients. All businesses develop a marketing plan to reach their desired goals. For too long, physicians have sat back and just provided service. It makes sense to set up goals for the practice and retain trained professionals to help you implement a strategy that will allow you to enhance your patient mix and subsequently your revenue stream.

Improving Efficiency:
2012 is just the beginning of the changes we will see as the Affordable Care Act is implemented over the next few years. Additionally, market pressure is significant on healthcare businesses/practices. The ability to identify what you want your practice to look like in a year and the ability to set up an implementation plan to do it is critical for the long-term success of the independent medical practice. Your practice should have the right number of employees performing the right tasks at the right time. Historically physicians perform their own billing and collection. Would it make sense to reduce costs by 4-6% if they could be outsourced?  Would you choose a different EHR if cost were not a factor? Should you have an associate or merge with another physician to offset space and personnel costs? Sometimes it takes an outside view by a trained professional to determine how best to run your business. This is an investment that you should not ignore.

A medical practice, like any other business, needs to adapt and change to market conditions. There will be winners and losers in healthcare over the next few years. Which do you want to be?

Dr. Schimmel is a Principal at Marcum Healthcare.  You may contact the author at or 305.995.9801. 

Last Updated on Saturday, 07 January 2012 17:41
Medicare Shared Savings Program Final Rule: Where Do We Go from Here? Print E-mail
Written by   
Thursday, 05 January 2012 06:55

McDermott Will & Emery is pleased to provide this supplemental matrix to its original White Paper summarizing and evaluating the Centers for Medicare & Medicaid Services (CMS) proposed Medicare Shared Savings Program (MSSP) regulations.  As did the original White Paper, the matrix provides both a summary of, and commentary on, CMS's recently published final regulations.  The matrix, which is intended to be read together with the original White Paper, "The Controversial Draft Medicare ACO Regulations: Analysis, Comments and Recommended Action," includes page-by-page cross-references identifying changes between the Proposed Rule and the Final Rule, as well as McDermott commentary and recommended action items.  Readers should consult both the White Paper and the updated matrix when navigating through the Final Rule's requirements.  We hope that you find this update and the original White Paper to be a useful and valuable resource and strategic planning tool as you evaluate your organization's participation in the MSSP.  The authors and editors of these documents, as well as other McDermott lawyers with substantial experience and knowledge in the many issues raised by the MSSP, are available to respond to your questions and to facilitate your consideration and pursuit of shared savings programs.

Access the Supplemental Matrix and original White Paper here

Healthcare Technology Update Print E-mail
Written by Jeffrey Herschler   
Wednesday, 04 January 2012 00:00

According to a recent article in the Daily Business Review, the healthcare technology sector is 'white hot' for investors. The author, Mike Seemuth, also points out that the health sector is rapidly creating new jobs in the region, second only to hospitality in South Florida. He lists Miami based CareCloud, Consult A Doctor of Miami Beach and Ft. Lauderdale's MAKO Surgical as examples of healthcare technology firms that are attracting capital and hiring new workers.

The enthusiasm surrounding healthcare tech is not universal however. A recent article in Fortune entitled Mobile health: Hallelujah or bah humbug? questions the validity of crossing healthcare with mobile devices. The author, Lisa Suennen, wants to know if mobile is the future of healthcare, or more hype than substance. She also revisits 1999's crop of eHealth companies "...and the trail of a bazillion incinerated VC dollars and careers."

Meanwhile, Jupiter Medical Center just launched its new MedWaitTime online service. According to the facility's press release,

"The MedWaitTime service is designed for people with non-life-threatening conditions. By visiting, a user can reserve the next available appointment for Emergency Department treatment and choose to wait comfortably at home until then. The online service has a fee of $8.99 to save a spot, which is refunded if the patient is not seen within 30 minutes of the scheduled time."

Last Updated on Wednesday, 11 January 2012 06:48
America's Health Rankings Releases Florida Findings Print E-mail
Written by Jeffrey Herschler   
Tuesday, 20 December 2011 20:17

This report is compiled annually by United Health Foundation. The latest report shows Florida has improved its position to 33 overall. It was 37th last year and 35th in 2009. Florida's strengths include low air pollution and high rates of immunization according to the foundation. The study notes the following challenges:
  • High rate of uninsured population
  • Low high school graduation rate
  • High geographic disparity within the state
  • It is further noted that smoking is down; about 13% of the state's residents smoke. Meanwhile obesity is up; over 22% of the population is obese with especially high rates among the non-Hispanic blacks at 38.8 percent

    Click HERE to view the report.

Last Updated on Tuesday, 20 December 2011 20:24
Path Lab Proposal Shot Down by OIG Print E-mail
Written by Jeffrey Cohen, Esq.   
Wednesday, 07 December 2011 12:52

The Office of Inspector General of the Department of Health and Human Services recently (October 11, 2011) shook its head at a proposal involving a pathology lab management services business that was to be owned by physicians. The proposed arrangement had the following features:

1. A path lab management business ("Manager") would be formed and the business would be owned by doctors;
2. The Manager would provide a list of management services to a path lab;
3. The path lab ("Lab") would not be owned by the doctors that own the Manager;
4. The Manager would provide a fixed amount of hours of services each year and would receive a percentage of the Lab's income (fixed percentage in advance) and that fee would approximate the Lab's use of the Manager's services for the year;
5. The physician Manager investors would be in a position to refer to the Lab;
6. The ownership interests of the physician investors in the Manager would exceed forty percent (40%);
7. More than forty percent (40%) of the Lab's revenues would come from the physician investors.

The OIG decided that the proposed arrangement posed more than a minimal risk of violating the Anti Kickback statute. The OIG also said the manager cannot refer its own patients or generate business in connection with the proposed arrangement. The OIG focused on the following points in its advisory opinion:

1. The Manager's "usage fees" to the Lab are percentage based and not flat and set in advance;
2. The ownership interests of the doctor investors in the Manager would exceed what is specified in the so called "small entity" Safe Harbor;
3. The physician owners of the Manager have no experience in managing a lab, but are in a position to generate referrals to it.

Though the regulatory Safe Harbors (to the Anti Kickback Statute) are illustrative of permissible arrangements, the OIG is clearly sticking very close to them. Where federal or state healthcare program dollars are involved, physician investors would do well to make sure they are Safe Harbor compliant.


With over 20 years of healthcare law experience following his position as legal counsel for the Florida Medical Association, Mr. Cohen is board certified by The Florida Bar as a specialist in healthcare law. His practice immerses him in regulatory, contract, corporate, compliance and employment related matters. Mr. Cohen is the founder of The Florida Healthcare Law Firm. | 888-455-7702
Last Updated on Wednesday, 07 December 2011 13:01
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