The Health Insurance Paradigm Shift

Posted on December 17, 2007 by Dr. David Edward Marcinko MBA

Medical Industry Changes to Wholesale Mentality

Staff Writers  

Until a decade ago, most doctors were probably more concerned with acquiring, maintaining or improving their medical acumen than worrying about practice management or personal financial planning.

And this was a good strategy, until recently. 

Introduction 

Variably, since 1990-2000 or so, medical professionals have not only worked harder to earn a living, but that living has not been as lucrative as it once was. Doctors today are working longer hours, diagnosing and treating patients faster; and augmenting their fear of malpractice with the fear of compliance audits like HIPAA, and literally risk their lives as they treat an increasing number of patients infected with HIV, herpes and hepatitis C; etc.  

What do they get for all their trouble? Slowly, a lifestyle that is sinking lower than many of the middle class patients they treat.

The Dramatic Shift

This is a dramatic change from the way things used to be in medicine. Some pundits even use the expression “health insurance payment paradigm shift” because the way doctors practice medicine – and the manner in which they get paid – has drastically changed.

This change has been from an individual retail mentality – to a wholesale and collective one. 

Other experts argue that this is a better deal for patients, while others document that there are more uninsured or underinsured patients than ever before.  

Nevertheless, a study done a few years ago revealed that almost 45 percent of all physicians are now corporate employees, and that private doctors do 40 percent less pro bono charity work than they did in the fee-for-service reimbursement system.  

Why; because they can no longer afford to work for free. 

Medicine’s Lost Professional Status 

Regardless of philosophy, one thing is certain: medical professionals have lost their financial clout, professional status and social standing; as some hospitals are even paid by the U.S. government not to train certain specialist physicians.  

And, twenty percent of medical schools are affiliated with business schools and practitioners are experiencing profound depression because of the managed care insurance crisis. 

Assessment 

The medical profession and healthcare industry is experiencing a professional crisis of conscience; a personal crisis of economics, and a very real problem that hurts everyone, doctor, payer and patient alike.   

Conclusion 

How and why this shift happened is very complex, but there are three main factors involved: (1) demand and supply side inequalities, (2) healthcare technology cost escalation, and (3) socio-political timing and demographics.  

What are your own causative thoughts, and/or local and national ideas on the shifting debacle?

For more related information: “Risk Management and Insurance for Physicians and Advisors” http://www.jbpub.com/catalog/9780763733421 

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Medical Accounts Receivable and Collections

Posted on December 17, 2007 by Dr. David Edward Marcinko MBA

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Working Hard for the A.R. Money

[By Staff Writers]  

Just as location is a critical element in locating a medical practice, collecting your ARs is an important critical element in maintaining the financial health of your medical practice. Your practice is not a bank and an effective billing system should be complemented by an efficient collection system.  

Policy Setting 

A policy that is too conservative may results in poor collection rates while an aggressive policy may be counterproductive and increase liability.  Have collectors call early and often. Waiting only encourages patients to pay late.

Use the 80/20 rule and concentrate on your biggest accounts first.  Get non-performing receivables off the books. Accounts over about 120 day should be turned over to third party agents. Out-sourcing to collection agencies vary significantly in terms of quality and results.  Most charge from 30 to 50% of what they collect.

Collection Agency Selection Criteria 

According to John Broderick, an executive staffing consultant from New York, the following should be considered when selecting a collection agency or using in-house personnel: 

  • Assertiveness and Analytical Skills: Collectors should be able to break a billing problem into component parts and aggressively pursue each part without being unduly tactless.
  • Creativeness and Curiosity: Collectors should keep abreast of new computer and software technology and pursue innovative philosophies related to the billing process.
  • Empathy and Communicativeness: Collectors should be able to communicate with both patients and doctors, yet still be able to put themselves in others’ shoes to view problems from each perspective.
  • Perspective and Stability:  Collectors should be able to see the patients entire economic picture and maintain an emotionally objective and neutral attitude toward the collection process.
  • Integrity and Tenacity: Collectors should have steadfast attitude and still earn the trust of clients, relative and the doctor employer. Collections should be in immediately since waiting 
  • Salary: An entry level full time office billing collector should be familiar with all States laws regarding the collection process and be paid in the mid 20-Ks per annum.  If not, after some time he or she may take their experience and training to another office for considerably more compensation.

Claims Court 

Remember, small claims court is the last avenue for payment. Often a decision has to be made whether to forgive or “write off” a patient’s balance if indemnity insurance coverage is maintained and this decision is best made on an individual basis.  

Unfortunately, malpractice claims have resulted by pursing past due accounts too aggressively.  This is especially true with surgical patients and it is best to pursue payment diplomatically, gently and often forgivingly.

Assessment

You could be losing money if your practice is still using a traditional checking account for its daily cash activities.

One way to make your cash work more effectively is to open a cash management account with a brokerage firm. This will ensure that your practice’s money is earning a much higher rate of interest. 

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