South Florida Hospital News
Saturday October 31, 2020
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September 2006 - Volume 3 - Issue 3
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Business Muse Ö Reflections on the Business of Healthcare Delivery

Medicine today is becoming more and more about the business of providing multiple services and finding streams of revenue to augment cash flow in order to maintain the ability to care for patients. The reasons for this shift in practice structure are many but primarily it is due to the decreasing reimbursement for services. The profits seen for the time and energy expended servicing patients have shrunk to an unacceptable level and one that frankly canít alone sustain the availability of providers to care for the public.

Physician services still are the core to generating revenue. However, physicians are realizing in greater numbers that keeping more of what they used to think of as ancillary services, in house, helps the bottom line. Groups, as an example, comprised of orthopedics, pain specialists and podiatrists, all working as one corporation, are a growing trend. These groups now offer many more services in house including in office diagnostics and therapeutics that were formally referred out to other providers. These groups are employing physician extenders to do routine exams and follow up care. They are also opening surgi-centers, offering rehab and competing with hospitals for urgent care patients. In short they are envisioning and growing.

I believe, however, that this phenomenon is different than the multi-specialty group model of the past. Under that model a patient is either inter-referred for the specialist to do that which makes it a specialty (i.e.: scopes, angios, etc.) or enters the practice being referred to a member from the outside. Services were all about what the doctor does to or for the patient rather than a multi-level team approach that includes other professional levels of service.

The shift that has brought about the current model is more in line with a vertical vision of business. The business strives to provide all parts of the whole experience (of related services) to the patient by offering service from the top (the provider) through to the bottom (in house dispensing of medications) and everything in between (testing, therapists, durable medical equipment). Thus keeping control of the product and attempting to cover all the customerís (patientís) needs as they relate to that particular field. It is a medical vision of cross selling.

The old multi-specialty practice model could attempt to duplicate this, but the amount of personnel, services, and marketing needed would be a great deal harder to undertake and control. It would be as if McDonalds tried to do what it does and sell cars under the same banner. Better to emulate Ray Kroc and offer all the aspects you can that touch your field and what you know and then make certain to attempt to do them better than anyone else.

To be sure, there are many advantages to following this model and type of thinking. One is picking target markets which can grow your individual type of business. Another is focusing on available ancillary services that can be revenue streams which will feed into your focused reservoir.

As an example of this thinking, I just attended the FWCI (Florida Workerís Comp Institute) meeting and trade show. For those who have not had this pleasure I highly recommend attending. Even if you have very little to do with workerís comp cases in your business, you can learn a great deal from those practices in attendance that do.

A large number of the exhibitors present at this show were medical practices, and their focus was clearly on the business of practice. These providers ranged the gamut from primary care to pain practices. It was equally clear that aside from marketing themselves, they actively searched out ideas and networked with each other as well as the potential ideas available from all other vendors there.

The variety of the practices represented were of all sizes, from the small of one location to the large encompassing many locations. It was, however, obvious that they all had one thing in common. They were actively marketing to a focused group that could send business their way. These practices understand that as a business they need to do things and approach their business in a different way to grow. In an effort to attain that end they have entered a world where physicians are not routinely seen as exhibitors: that of the business trade show - booth, giveaways and all - in order to woo this type of business.

Their ability to target and plan and execute is a beacon that all practices should follow. That light leads to a very successful harbor. All it takes is the desire to focus and the willingness to embrace change, envision and grow. Reach out. You will find helping hands to navigate the way. Donít believe that you canít succeed and grow in these times: These practices have. Let them light the way.

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