Medical practices today face a myriad of challenges that are putting pressure on profits and impacting overall physician satisfaction.
Hanson & Co provides medical practice accounting services to offices throughout Colorado. Below we summarize some of the top medical practice management challenges for 2015:
- Increasing Administrative Burdens: Many physicians are having trouble balancing the increased administrative demands of the job while still providing quality patient care. According to the Patient Profitability Index, the percentage of physicians who reported spending more than one day a week on paperwork increased from 58% to 70% in 2014. One factor driving these increases is a dramatic rise in required prior authorizations from payers for drug prescriptions and procedures. A 2012 Kaiser study estimated that physicians spend 868 million hours/year on prior authorization documentation. In addition, most doctors would claim that technology changes seemingly intended to drive efficiency like ICD-10 and Meaningful Use are actually adding to their administrative burden. These added administrative tasks are cutting into available patient time impacting both physician satisfaction and practice profitability.
- Eroding Profitability: In addition to losing valuable patient time to administrative activities, medical practices are seeing profit erosion from a variety of other sources. Physicians are under constant pressure to get reimbursed for the work they do. Payments are most commonly denied due to ineligibility or errors/missing information on the claim forms. Increasingly, the Affordable Care Act is resulting in payment challenges for physicians working with Medicare patients. Penalties associated with the Physician Quality Reporting System (PQRS) will be assessed at 1.5% in 2015 rising to 2% thereafter to practices not performing the surveys or not meeting minimum standards. In addition, physicians are being squeezed by serving patients who have signed up for ACA plans but not yet paid their premiums. According to The Commonwealth Fund, only 67% of enrollees in the ACA’s first enrollment period which ended March 31, 2014, had paid their premiums by April 15, 2014. Many of these patients had already received medical services, creating collections problems for treating physicians if they get dropped from the exchange. While coding-related claim denials have been declining in recent years, many expect to see a spike after ICD-10 is implemented on October 1, 2015. Increasing practice expenses driven by technology costs, the competition to retain quality staff, and extended hours required by busy patients are also leading to profit erosion.
- Payers/Patients Dictating Healthcare Treatment: A RAND study released by the American Medical Association in 2013 suggested that payer physician satisfaction is being seriously undermined by increasing payer refusal to cover needed services. Payer audits of patient records are increasing in frequency requiring detailed record-keeping and practice time. While some payer-mandated treatment plans are designed to drive higher quality care, in many cases, the focus is more on cost reduction. Seemingly in direct contrast to payer-dictated treatment plans, physicians are now required to receive positive feedback on PQRS surveys to receive full payment. Patient satisfaction, however, is not always aligned with the delivery of high-quality care. For example, patients are routinely more satisfied when provided antibiotics or pain killers in cases where physicians would advise against dispensing these drugs. Similarly, patients with obesity-related illnesses, don’t typically want to be told by their doctors that they need to lose weight.
How to Use This Information
We are in a sometimes uncomfortable transition phase in healthcare in the U.S. The challenges of running a profitable, patient-centered medical practice continue to rise and physicians are often burdened with tasks that in no way relate to the delivery of quality care. Hanson & Co., helps medical practices successfully navigate the changing healthcare landscape with medical practice accounting and financial management advice that helps drive continued profitability despite growing pressures. Looking for financial support for your medical practice? For additional information please call us at (303) 388-1010, or click here to contact us.