This is part 2 of a three-part series on the importance of independent specialty practices in America. Part 1 explains why physician practice consolidation is not the promised cure-all solution, this part describes the specialty practice management challenges associated with running practices to meet the needs of modern healthcare, and part 3 explains why the right partner can make all the difference.
Medical practices today must deal with numerous specialty practice management challenges. They’re plagued with significant administrative burdens, from ongoing changes in reimbursement, reporting, prior authorizations, and regulatory requirements. There’s so much to handle regarding the business side of running a specialty practice. Most doctors became doctors to practice medicine and care for patients – not deal with administrative churn. The reality is that you don’t have the resources (time, funds, or expertise) to build a team of experts or become one yourself, however, you also can’t ignore the business-side demands of modern medicine.
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It’s Hard, but By Taking the Right Steps, You Can Strengthen Your Practice
Specialty Practice Management Challenges
The demands of modern medicine have created numerous specialty practice management challenges. Besides just needing to find ways to keep costs down while providing exceptional care, practices must also:
- Keep up with evolving regulatory and payer requirements
- Hire, train, and retain quality staff
- Deal with outdated technology
- Meet patient expectations
- Transition to new care models
- ….just as a few examples
There’s Not Just One Specialty Practice Management Challenge to Deal With
To survive in the evolving healthcare landscape, specialty practices must optimize business processes and leverage modern technology solutions to address current obstacles and prepare for the future.
Successful practices are adopting key strategies, such as:
- Tracking key practice operational and financial metrics for data-driven decision-making
- Monitoring patient health outcomes to understand how this impacts business performance
- Investing in new technology to improve the patient experience, track operations, and uncover new opportunities
- Implementing value-based care programs and leveraging these programs to build strong referral networks
- Deploying care pathways to ensure patients get the care they need, when and where they need it.
93% of independent physicians report feeling that their job holds valuable advantages compared to their employed peers.
It is Many, Complicated Interconnected Things
Practice owners are pulled in a million directions as they attempt to address these specialty practice management challenges. Many of these challenges are linked, but figuring out how they are all interconnected often feels overwhelming.
Overcoming these challenges requires taking a step back to understand practice operations based on operational and financial KPIs – but where do you even start looking?
Specialty Practice Management Challenge Example: Referral Networks
Do you know how your practice would be impacted if you stopped receiving half of your referrals?
This isn’t a hypothetical question—your stellar record of inpatient treatments and longstanding personal and professional relationships with local primary care physicians (PCPs) might not be enough to protect your future referrals.
Payers are increasingly pressuring PCPs to reduce the total cost of care for patients. This ultimately impacts specialty physicians like you, as it also includes the cost of the care you provide those patients when they get referred to your practice. This is driving PCPs to become increasingly selective as to who they want to refer out to. What’s more, payers are evaluating specialists, grading them based on costs and outcomes, and sharing this information with PCPs.
Some payers are generating report cards that PCPs in your area are referencing when making referrals, with the goal of many payers controlling these referral flows. These report cards are built based on cost and quality metrics such as:
- ASC utilization rates
- Cost per patient
- Encounters per patient
- Procedures per encounter
- Replacement readmits
- …etc.
More and more, these report cards will have a significant impact on the number of referrals your practice receives.
Of course, this isn’t the first time that payers are simplifying the complex practice of medicine to a few simplistic metrics. However, many doctors are surprised at what their report card says, and some don’t even know that these report cards exist at all.
You need to be aware of how your practice is being evaluated and prepared to contextualize simplified metrics with real practice data.
Ultimately, you want to be able to take a step back and look at the overall cost of care and how your practice fits into that story.
Getting Holistic About the Cost of Care
Discussing the cost of care can feel taboo – but it’s not a topic that is going away, and it’s not always the zero-sum conversation you might fear.
Your specialty fees are likely only a small portion of any singular patient’s total cost of care. For example, a surgeon’s cost associated with surgery is just a portion of the total cost of care when considering the anesthesiologist, facilities, home care, and physical therapy that goes along with the surgery.
If you only let payers focus on the cost of the surgery as the main cost driver, you’re missing opportunities to advocate for yourself in providing high-quality, low-cost care. Instead, you can leverage your position as the specialty practice to exert control over the clinical pathways that occur both before and after their surgery. A clinical network like this helps ensure your patients receive the best care and will (not incidentally) reduce the overall care cost through less unnecessary testing, complications, or readmissions.
Provider referrals are changing; if you don’t take a proactive approach to understanding how these referral flows are working in your practice and what you can do to optimize them, you’ll be left behind.
Want to learn more about the impact of referral flows in your specialty practices?
It’s Complicated…
Running the business side of your practice is more complicated than ever, and there’s no one right way to increase your success. Each market is different, each practice is different, each specialty is different, and each doctor is different.
However, there are some common trends that you can use to strengthen your practice. You’ll need specialized tools to properly track and report on practice metrics, including patient outcomes, cost-of-care data, and other critical KPIs. You’ll need to effectively help support communication and coordinated care across care pathways between PCPs, specialists, and other providers. Ultimately, physicians need to be willing to avoid a head-in-the-sand approach and tackle these challenges head-on.
Optimizing and strengthening your specialty practice isn’t easy – but it’s not a challenge you have to tackle alone.