The Medical Practice Business Plan EXECUTIVE SUMMARY?

WHAT IT IS – HOW IT WORKS

By Dr. David E. Marcinko MBA CMP®

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THE BUSINESS PLAN STANDARD FORMAT

Physician Executive Summary

The Physician Executive Summary is always included at the beginning of a formal business plan and represents a brief synopsis of the medical prarctice entire plan.  Its appearance, grammar and style should be sharp and crisp as it represents an enticement for the reader to maintain interest and contribute intelligent or economic input into the new venture.

It should contain information about the practice, advertising and marketing opportunities, physician management, proposed financing with four Pro Forma financial statements, business operations and exit strategy.  This last point, while unpleasant is often overlooked by naive practitioners.  Business experts however, look favorably upon an escape plan and view it as the mark of mature professional that realizes the possibility of success as well as failure. 

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Ultimately, the plan must explain to potential investors how you will make the practice   profitable and produce the required Return on Investment (ROI) for them.  It must describe medical services, patient acceptance and benefits, provider qualifications and accomplishments, the amount of capital required, market size, potential practice growth rate, and market niche. 

Additional information may include office location, proximity to labor, transportation, license requirements, business entity status, proprietary technology and potential working agreements with various insurance, managed care, ACA and HMO plans.  If all of the above seems bewildering to the uninitiated, you are correct. 

Remember however, that if you do not have, or can’t borrow the funds to begin a private practice, you will just have to become an employed practitioner until you can.  It is therefore imperative to start off on the right foot, with a sound business plan, as you begin your medical career.

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PODCAST: 70% Doctors Owned by Private Equity and Hospitals

THE BUSINESS OF MEDICINE

By Eric Bricker MD

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Empathy – the business of treating people [Video]

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A Cleveland Clinic Initiative

[By staff reporters]

If you haven’t seen this viral video yet, you’re in for tear-jerking treat.

A production of Cleveland Clinic highlighting the need to “understand” people in the medical setting. The direct implication is that such understanding goes beyond the medical setting, and can be transferred to all settings where people interact.

Watch “If We Could See Inside Others’ Hearts” here:

Delacroix[DELACROIX]

Assessment

This short film captures the essence of the “business” of treating people: empathy.

More: www.CertifiedMedicalPlanner.org

Conclusion

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My Favorite Health 2.0 Experience from McDonalds

Meet the Schwieterman’s

By Dr. David Edward Marcinko; MBA, CMP™biz-book

Back in 2005, we published the second edition of our popular textbook: the Business of Medical Practice. And, we are now working on the third edition. At the time however, I was fortunate to have a colleague from the Microsoft Corporation pen our Foreword, now reprinted below for your review.

Link: http://www.springerpub.com/prod.aspx?prod_id=23759

 

What a Family Tradition!

My favorite story came from Dr. Thomas Schwieterman, a fourth-generation physician working in the same medical office his great grandfather established in 1896 in the town of Mariastein, Ohio. From those same historic environs, Schwieterman has used Microsoft Access to create his own physician assistant application.

The Schwieterman Family Physicians practice kept him so busy that he was wondering how he could keep up with his patient caseload. Schwieterman wanted a faster way to handle prescriptions, provide medical information, and record data for his patient records. He walked into a McDonald’s restaurant one day and had an idea.

The Epiphany

“I ordered a cheeseburger and fries and watched the person at the counter touch the screen of the cash register a few times, and realized the order was getting transferred back to the food preparation area, and that by the time I paid, my order was ready,” he said. “I thought to myself: ‘That’s what I need!’” He searched for commercially available solutions, but when he couldn’t find an exact match for his needs, and when he found prices steep for a small private practice, he decided to create his own – using Access. He also called upon a friend with a Master’s Degree in electrical engineering to help on the coding. His creation boosted his income by 20 percent – “Which was important because we pay more than $60,000 a year for malpractice insurance even though our clinic has never been sued since it was founded 107 years ago.”

Assessment

What my friends at Microsoft especially like about this story is that when Dr. Schwieterman’s colleagues tried his program, liked it, and suggested he try to sell it, he put together a PowerPoint presentation – and landed a partnership agreement with a major healthcare supply and services corporation to market his ChartScribe solution.

Conclusion

So, the pressures facing physicians are great, but so are their resources. Information technology is one resource, this book is another, but the greatest of all is the innate curiosity and drive to discover and create that seems to be so much a part of those who are drawn to this noble profession.

Ahmad Hashem; MD, PhD

Global Healthcare Productivity Manager

Microsoft’s Healthcare Industry Solutions Group

Microsoft Corporation

Redmond, Washington 

Conclusion

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Concierge Medicine and the “Zombie” Medical Practices

Continued Growth of Boutique Medical Practices Today

[By Dr. David Edward Marcinko; MBA CMP™]dem2

The boutique, or direct reimbursement, or cash based medicine, or concierge medical practice business model requires an annual fee for personalized treatment that includes amenities far beyond those offered in the typical practice, or suggested by physician medical unions. Patients pay annual out-of-pocket fees for top tier service, but also use traditional health insurance to cover allowable expenses, such as inpatient hospital stays, outpatient diagnostics and care, and basic tests and physician exams. Typical annual fees can range from $1,500 to $ 5,000 per patient, to family fees that top $25,000 a year, or more. The concept, initially developed for busy corporate executives, has now made its way to others desiring such service.

A Higher Level of Care

Medical providers get to provide a much higher level of care and get to know their patients as they enjoy the incentive to spend appropriate time with them, and over time, get to know them within their unique social/cultural context as well (hence the house calls become important). Patients enjoy the access, the attentiveness, and are willing to spend cash to have the type of unhurried, contemplative time with physicians that is required to develop a trusted relationship and deliver high quality care. The financial remuneration potential is compelling as well.

Now, let us compare and contrast various parameters of traditional medical practice [third party reimbursement] with the same parameters of  so-called “new-wave” concierge medicine. Then, let the next-generation of doctors decide.

Current Traditional Model

  • patients seen at 15-20 min increments
  • 2,000 – 3,000 patients
  • Paperwork, administrative burdens, frustrations, and lack coordinated care
  • Impersonal experience (long waits, un-intelligible interactions with health care system)
  • Average Salary = $150,000-250,000

Concierge Practice Model Potential

  • direct relationship with patients
  • 300-500 patients
  • $1,500 – $3,000 access/retainer fee
  • Reduced overhead, positive interactions, care coordination and increased quality
  • Personalized experience (reduced headaches and paperwork with transparent pricing)
  • 24/7 access, same day appointments with multiple other amenities
  • Average Salary = $100,000 – $500,000

Enter the Franchisors

Concierge medical practices can be developed organically, or use a franchise business model [personal communication, Suzanne R. Dewey, Forté Partners, LLC, Williamstown, MA]. Examples of franchisors include:

Opponents and Pessimists

There have been plenty of opponents, within medicine and outside, to the idea of concierge practices almost from the first day.  For example,

The state of Washington’s insurance commissioner attacked the concept of practices offering all the primary care patients needed for a prepaid fee or retainer, arguing that such practices amounted to the business of underwriting health insurance. He said that the practices would have to meet all the regulatory requirements for such an insurance business, including establishing capital reserves and maintaining loss reserves for the payment of claims. It didn’t work, and besides, few concierge practices offer free traditional medical care once retainers are paid–most concierge physician’s bill insurance plans for all the services covered under their patients’ coverage.  The Medicare folks chimed in and managed to drive one physician out of business, arguing that he had tried to charge Medicare patients an extra $600 a year for services already covered by Medicare, hence he was guilty of illegal “balance billing.” Rather than fight Medicare over the issue, the doctor gave up and closed his practice. [C. Davis, “Big Problems for Medicare and Concierge Medicine,” Sierra Sacramento Valley Medicine, 55:3, May/June, 2004 (www.ssvms.org)]” 

Attacking ME?

Objections to concierge medicine focus on both its causes and its effects, and some critics have even attack me, personally. For example, just look what “they” said in the online journal: “Health Care Strategic Management.”

Many critics argue that concierge medicine merely reflects physician greed and unconcern over the needs of the community. Indeed, a recent book by David Marcinko, Business of Medical Practice [Advanced Profit Maximization Techniques for Savvy Doctors], includes a chapter on “The Case for Concierge Medicine” (Ch. 24) as one of the ways ‘savvy’ physicians can maximize their profit, as if that is what medicine is all about. While the image of physicians may retain some Marcus Welby elements of their rushing to the hospital or a patient’s home in the middle of the night, most physicians would rather stay home and leave the job to someone else, it is argued”.

Nicht Schadenfreude

Just think! My mother always feared I’d be a no-body. Good publicity – bad publicity – just spell the name correctly. Schadenfreude may be defined as a “largely unanticipated delight in the suffering of another which is cognized as trivial “ and I take no delight in the slow collapse of traditional medical practice models; or the economic, professional or personal pain of colleagues. But, I also often tell my critics – and clients – that although it’s awfully nice to be altruistic; I am always mindful of the competitive business adage: “no margin-no mission.” And, in as much as this attack was written in July 2005, I can only wonder if I was prescient, or just lucky? With all due respect, I believe it was the former, rather than the later. Why so? Well, just consider how fast www.ChoiceMed.com is growing. This stuff is not rocket-science.

www.MedicalBusinessAdvisors.combiz-book1

About Concierge Choice Physicians

Concierge Choice Physicians: http://choice.md  is a national organization offering a hybrid business model. Physicians divide their practice between a traditional practice and a retainer practice. The retainer practice is limited to approximately 150 patients. A typical concierge practitioner may have 300-500 patients, while the norm for a traditionalist is about 2,000-3,000 patients.

Assessment – Whither the “Zombies”

I, also ruefully wonder how many “zombie” medical practices [practitioners] are out there? You know the kind – a medical practice with neither a good/bad balance sheet. One with only subsistence level operating performance; a practice that is not growing organically or thru merger activity. It is just barely existing as the doctor-in-charge slowly, agonizingly, milks it to death; or retires, whichever comes first.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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