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Articles

A look at what may be ahead in the new year.

2025 health care predictions part 1

Your weekly dose of wisdom from the Physicians Practice experts. 

Practice tip of the week: Don’t make these strategic planning mistakes

Neil Baum, MD, a Professor of Clinical Urology at Tulane University in New Orleans, LA. Dr. Baum is the author of several books, including the best-selling book, 

Marketing Your Medical Practice-Ethically, Effectively, and Economically,

 which has sold over 225,000 copies and has been translated into Spanish. He contributes a weekly video for 

 on practical ideas to enhance productivity and efficiency in medical practices.  His 5–7-minute videos and short articles provide practical ideas that can be easily implemented and incorporated into any medical practice. Dr. Baum can be reached at 

We need to think outside the box and identify more than one solution to find the best solution to problems in the practice.

Using the laws of physics to enhance your practice

Brandon Daniell is president and co-founder of 

. He has more than 18 years of business and program development experience in healthcare, having worked with leading employers, physicians, payors and hospital systems. With three private practice physicians in his family, Brandon understands the challenges many practices face concerning patient engagement.

For practices, care gaps translate to lost volume and revenue as well as the potential for their patients to experience preventable diseases and worsening health.

How practices are closing gaps in care with text messaging

Physicians Practice offers practical, proven solutions to the real-world concerns physicians and medical practices face every day.

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Director of Population Health and Client Analytics at Quest Diagnostics

Physicians, and employers, need to start taking financial toxicity seriously. 

Is medical debt making patients sicker?  

Doctors and medical practices are mired in administrative tasks.

One of every five dollars of U.S. gross domestic product, or $4 trillion, is 

 And a quarter of that is spent on administration, with half of the $1 trillion devoted to complex billing processes.

It’s not only back-office workers who are sucked into the whirlwind of medical administration. Doctors spend up to 20 hours a week on 

, often taking as much time to document patient visits as they do actually caring for patients.

The burden of health care administration has put doctors and small medical groups at a disadvantage compared with larger players and insurance companies. The situation is so bad that doctors are 

, and otherwise healthy small practices are deciding they have no choice but to be swallowed up by larger medical groups or to shut down.

But there are solutions. This is what doctors and other health care professionals need to know:

Detailed prices are finally starting to become publicly available. Although you almost need to be a data scientist to figure them out, providers can now use some benchmarks to negotiate with payers on prices.

 It may be hard to believe, but many don’t know those prices. It’s hard to run a practice without this information.

 That’s so fixes can be made at the front end of the payment process to avoid denials and thereby reduce administrative work.

Process automation, including the use of 

, increases efficiencies and performs tasks at a small fraction of time and costs now devoted to them.

Transitioning to value-based care can save time and lead to better care.

For health care providers, the headache tends to involve three interlocking problems. The first is what I like to call a “wild west” approach to pricing baked into America’s fee-for-service payment model. That’s where the cost of a procedure can vary widely.

When a regulation recently took effect mandating that hospitals disclose their standard charges, the variations were stunning, and the presence of big government payers like Medicare only makes the situation more unstable. There are, for example, hundreds of procedures where commercial payers’ prices are 

Pricing remains so opaque and complex that most providers are forced to offer the bulk of their services without knowing in advance what they will be paid, contrary to traditional business models. And this leaves aside the penalty that smaller providers face because of their limited ability to bargain with large payers.

The second problem for providers is just making sure they get paid. Four years ago, about 9% of reimbursement requests by providers were 

. Today that number is closer to 12%, resulting in a hit of more than $100,000 to a practice with $1 million in billings.

But that tells only part of the story, because the 12% of billings ultimately written off by providers is less than half the initial rate of such denials, meaning untold hours spent trying to limit losses.

Third, growth in process automation may be leading to an even greater power imbalance in the administrative relationship between payers and providers. Well-resourced payers have begun to use artificial intelligence to find ways to deny bills submitted by providers.

While process automation can help providers keep up with payers, what they often really need is better data about their own operations. Many find it difficult to understand the cost of the care they are providing.

For example, knowing what it really costs to provide a hip replacement is crucial for numerous reasons. For one thing, it makes productive rate negotiations with payers possible. How can a doctor agree to perform hip replacements if the reimbursement being offered by a payer is below the cost of providing the service?

Conversely, if a practice discovers it is efficient at performing hip replacements, it may choose to focus on performing more of them and negotiating higher prices for them than other similar procedures. Meanwhile, efficiently capturing all the different contractual rates in place with payers into a common dataset can make tools such as accounts receivable reports more meaningful.

Over time, the American health care system may move from fee-for-service toward 

, in which providers are paid fixed rates to care for patients. Doctors would have the freedom to use that money for care as they see fit.

But while such an evolution might help with our trillion-dollar admin bills, it could also force providers to shoulder even more risk, further pushing smaller practices to seek refuge in larger, more bureaucratic groups. That’s because doctors would have to pay for cost overruns.

The best-case scenario would be if providers addressed the admin problem now rather than taking on a much bigger task that would further add stress. This can be done with automation, which also helps better position providers for transitioning to value-based care.

Addressing the problem requires a multi-pronged approach

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Reining in administrative burden

2024 Payer Scorecard Results

The relationship between medical practices and the insurance companies they work with is one of the most fraught in the entirety of the health care industry.

, Physicians Practice has developed the Payer Scorecard which asked respondents to rate 

 they deal with on criteria including practice communication and  customer service.

The verdict is in for how practice's feel about their payers, and it isn't good.

2024 Payer Scorecard: How payers are failing practices and patients

It's hard to overstate the importance of some decisions.  In the life of a physician, the choice of where to practice would certainly fall among them.

“Location can impact your daily practice, as well as your career trajectory and quality of life outside of work,” says 

, a PCP at Spring-Ford Family Practice in Royersford, PA and ACE Medical Director for Tandigm Health. “Choosing the right type of practice – large or small, independent or system-owned, single- or multi-specialty – can also go a long way toward overall job satisfaction.”

The best time for making this choice varies. Sometime during the residency seems to be the best option for most, with earlier starts allowing more time for exploration. But waiting until the third year is also acceptable if the delay is not too long, according to 

, executive vice president of Merritt Hawkins/AMN Leadership Solutions. “Given the dampening effect of Covid on the job market, it’s better to job hunt earlier in the year and not wait until you are a few months out,” he says.

Regardless of timing, selecting where to practice merits careful investigation. In making your decision, consider these tips.

Regardless of timing, selecting where to practice merits careful investigation.

Maren S. Fragala, PhD

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