John Cherf, MD, MBA, president of OrthoIndex, discusses five ways physician practices will change over the next year.
1. Solo practices will continue to decline. According to Dr. Cherf, many small practices currently function as "mom and pop shops" — a model that may no longer be sustainable in the next few years. He says the number of physicians moving from solo practice to some kind of consolidation has increased significantly in recent years. This movement can vary depending on the local market. "For example, some consolidation means being employed by hospitals, some might be joining a multi-specialty group or another [single-specialty] group and some might be creating an ACO," he says. "It depends on local market dynamics."
2. Patients will take greater ownership of back-office tasks. In 2011, Dr. Cherf believes practices will continue to feel the burden of more staff requirements, particularly concerning information technology. "There's a lot of demand for practices collecting data and monitoring themselves in terms of quality," he says, suggesting additional staff may be needed to keep up with regulatory requirements and benchmarking. However, payrolls may be eased slightly if patients can take some responsibility for back-office tasks, such as scheduling, data input and making payments.
"Traditionally, you'd call a patient up and talk to them on the phone, and much of this has been pushed off to the consumer," he says. The implementation of IT could help patients schedule their own appointments and communicate with physicians through an online portal.
3. Virtual office models could become more prevalent. According to Dr. Cherf, rent is a huge overhead for practices, particularly in urban areas. "There's a model for a virtual office, not necessarily owning bricks and mortar," he says. Fractional leasing is also an option. Physicians then only pay rent when needed. Many back-office tasks can also be outsourced to create a "virtual office" of staff members that work from different locations. Frequently this decreases your overhead, says Dr. Cherf.
4. Practices could redistribute physicians to save money on medical malpractice. "Without meaningful tort reform, there may be enormous pressure on our system such that it doesn't make sense for surgeons to be operating half the week and in the office half the week," Dr. Cherf says. He says a better model for a 10-physician practice might be to assign five physicians to operate full-time and five to never operate and see patients in the office.
"This may never happen, but there's a lot of money at stake, and as reimbursements get compressed, doctors are going to think of creative ways to improve financial performance," he says. He says a structure that involves physicians moving back and forth between operating and office work loses money through operational inefficiencies and medical malpractice insurance.
5. Money may lie in co-management arrangements. Dr. Cherf predicts more physician groups — and particularly orthopedic physician groups — will work with hospitals to manage service lines. "The way things are going right now, hospitals are going to enter their own period of negative reimbursement pressure. Hospitals want orthopedic surgery, and they may compete for physician loyalty in the form of co-management arrangements," he says. Physicians could be paid to co-manage a service line through a typical medical directorship. However, this requires management skills that not all physicians have. While Dr. Cherf predicts an overall migration toward co-management of service lines, he says physician practices should be wary of appointing leaders who are more suited to clinical duties.
Read more advice from Dr. John Cherf:
-Reducing the Cost of Orthopedic Devices and Related Products: Q&A With Dr. John Cherf, President of OrthoIndex
-10 Best Practices From 10 ASC Physicians
-5 Ways to Reduce Supply Costs at Your Orthopedics-Driven ASC
1. Solo practices will continue to decline. According to Dr. Cherf, many small practices currently function as "mom and pop shops" — a model that may no longer be sustainable in the next few years. He says the number of physicians moving from solo practice to some kind of consolidation has increased significantly in recent years. This movement can vary depending on the local market. "For example, some consolidation means being employed by hospitals, some might be joining a multi-specialty group or another [single-specialty] group and some might be creating an ACO," he says. "It depends on local market dynamics."
2. Patients will take greater ownership of back-office tasks. In 2011, Dr. Cherf believes practices will continue to feel the burden of more staff requirements, particularly concerning information technology. "There's a lot of demand for practices collecting data and monitoring themselves in terms of quality," he says, suggesting additional staff may be needed to keep up with regulatory requirements and benchmarking. However, payrolls may be eased slightly if patients can take some responsibility for back-office tasks, such as scheduling, data input and making payments.
"Traditionally, you'd call a patient up and talk to them on the phone, and much of this has been pushed off to the consumer," he says. The implementation of IT could help patients schedule their own appointments and communicate with physicians through an online portal.
3. Virtual office models could become more prevalent. According to Dr. Cherf, rent is a huge overhead for practices, particularly in urban areas. "There's a model for a virtual office, not necessarily owning bricks and mortar," he says. Fractional leasing is also an option. Physicians then only pay rent when needed. Many back-office tasks can also be outsourced to create a "virtual office" of staff members that work from different locations. Frequently this decreases your overhead, says Dr. Cherf.
4. Practices could redistribute physicians to save money on medical malpractice. "Without meaningful tort reform, there may be enormous pressure on our system such that it doesn't make sense for surgeons to be operating half the week and in the office half the week," Dr. Cherf says. He says a better model for a 10-physician practice might be to assign five physicians to operate full-time and five to never operate and see patients in the office.
"This may never happen, but there's a lot of money at stake, and as reimbursements get compressed, doctors are going to think of creative ways to improve financial performance," he says. He says a structure that involves physicians moving back and forth between operating and office work loses money through operational inefficiencies and medical malpractice insurance.
5. Money may lie in co-management arrangements. Dr. Cherf predicts more physician groups — and particularly orthopedic physician groups — will work with hospitals to manage service lines. "The way things are going right now, hospitals are going to enter their own period of negative reimbursement pressure. Hospitals want orthopedic surgery, and they may compete for physician loyalty in the form of co-management arrangements," he says. Physicians could be paid to co-manage a service line through a typical medical directorship. However, this requires management skills that not all physicians have. While Dr. Cherf predicts an overall migration toward co-management of service lines, he says physician practices should be wary of appointing leaders who are more suited to clinical duties.
Read more advice from Dr. John Cherf:
-Reducing the Cost of Orthopedic Devices and Related Products: Q&A With Dr. John Cherf, President of OrthoIndex
-10 Best Practices From 10 ASC Physicians
-5 Ways to Reduce Supply Costs at Your Orthopedics-Driven ASC