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October 16, 2015 News No Comments

All Practice Models Have Ups and Downs
By Tom Giannulli, MD

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Like all physicians, I’m very interested in improving and simplifying medical reimbursement, so I’m always fascinated by how practices are using different payment models to stay independent. A new survey, Practice Model Perspectives 2015, indicates growing frustration with the payer system, which comes as no surprise. However, what is interesting is that, while many physicians are looking at alternate business models like Direct Primary Care (DPC), no model is free of challenges. Every approach has its ups and downs, and to be successful, practices need to look at all of their options and choose a path that makes sense for them based on their unique situation.

The survey showed that about 24 percent of practices were already using some kind of private pay structure or membership program. Another 46 percent of physicians said they were considering making a change to direct pay, concierge, or other membership models in the next three years. Interest in changing or adding alternate payment plans is high.

The top reasons for making a change were separating from the payer system, spending more time with patients, and improving work/life balance. Not surprisingly, private-pay doctors indicated they work fewer hours on average, spend less time on administrative tasks, and have more time with patients. What was more interesting were some of the responses from providers using different models.

No matter what business model you use, there are challenges. The need to find patients to support your practice is important for all providers, but more so for private-pay physicians. The survey found that this is the biggest challenge for concierge and direct-pay physicians. I think this explains why many of these practices haven’t gone all in, so to speak. Only 28 percent of respondents had all of their patients on a membership plan. The largest group — 37 percent — had only 25 percent or fewer of their patients on a membership program.

It’s important to note that while providers can transition their whole practice to direct pay or concierge models, they don’t have to do it that way. By having only some patients on a membership program, there is far less risk. If it goes well, then physicians can look at transitioning more of the practice. The key is proper planning and choosing the right place with the right patient mix.

The Technology Angle
In addition to some of the challenges around creating a viable model, all providers indicated the need for tools and software to support their practices. Over 80 percent of the physicians who responded were on an EHR, and nearly half had a patient portal. Where the practices differed was in the use of newer technologies.

Practices using private-pay models were more likely to use telemedicine, kiosks, and practice-marketing software. Fee-for-service practices were far more likely to put an emphasis on billing software. Choosing and using any software comes with its own benefits and challenges, and these days it seems there is no way around the need to use technology to help increase your chances at success.

Ultimately, the survey shows that all models come with benefits and challenges. To find the right fit, physicians need to think about their larger goals and risk tolerance. There are many options available today, and you don’t have to choose a single model. You can build a practice that meets your unique needs by combining different models to create an agile physician practice.

Tom Giannulli, MD, MS is CMIO at Kareo of Irvine, CA.


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JenniferMr. H, Lorre, Dr. Jayne, Dr. Gregg, Lt. Dan

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