The Future’s So Bright – If You Plan for It

From early childhood we’re taught to plan ahead, think of what we want to be when we grow up, and save for a rainy day. As human beings we’re hard-wired to think about our future.

Physicians who own their practices are no different. They just don’t always have the time and resources to map things out for next year or five or ten. Not when there’s a waiting room full of patients to see and another staff member leaving for another job.

So, how do you plan ahead if you’re an independent physician?

We have these conversations all the time at Alo and Avance Care. Our job is to help practice owners get a sense of their needs and desires and help them peer around corners to see what’s coming next, and then take the best path toward ensuring a sustainable future.

When we’re talking to doctors all across North Carolina, we get a lot of questions and comments about topics such as whether to sell, what steps to take to remain independent, how to reduce staff turnover, and when to retire.

But there is one question that consistently rises to the top: “I know I need to make some changes, but I’m too overwhelmed with administrative burdens to know where to start. What can I do?”

We hear you! While every practice has its own unique set of circumstances, the following ways of thinking about the future should help physicians who want to shape it. We’ve had these conversations with practice owners, and they’ve told us it’s helpful. And perhaps best of all, contemplating these steps is something that can be done as you have time away from your busy day-to-day work environment.

Look at your current financials and operations

Physician practices, especially in primary care, are getting squeezed, so it makes sense to start your journey to a better future by taking a hard look at your numbers. You might conclude that things don’t seem to be getting any better. For example, many physician groups are already calling for revisions to the proposed rule for 2025 recently put out by the Centers for Medicare and Medicaid Services, showing a 2.8% cut in the Medicare conversion factor.

You probably have an accountant. It’s worth asking your accountant to review revenue and profits (or losses) with you for given periods of time.

But there are many indicators to look at beyond your quarterly and annual income statements. Our CEO, Matt Eirich, provided a great breakdown in this blog post.

And there are some numbers you might not have thought of. For example, your office footprint. Do you have any square footage being used by non-revenue-producing team members that could be converted to a patient exam room?

Consider what you want to change

Once you’ve gotten a handle on your current financial and operational standing, it’s time to think about what can be improved or modified.

One of the first places practices turn is to look for a partner or vendor that can take on administrative functions like IT and revenue cycle management (RCM). There are many flavors of administrative support available to independent practices. Since this is an area of expertise for Alo, we often provide guidance to practices looking for outsourced help.

Another area of consideration for practices is in staffing. It’s natural for a busy lead physician to want to bring on more staff such as physician’s assistants and advanced practice providers. Before posting job descriptions, be sure the total compensation (including benefits) of any additional staff can be more than offset by an increase in patient volume.

Determine how long you want to keep doing this

Ah, the big question. For years we’ve seen more independent physicians sell to big health systems, merge with other practices, or simply retire.

Our advice in speaking with practice owners is to take time to plan what you want, rather than be forced into a decision such as selling or retiring because of revenue shortfalls or other circumstances.

Keep in mind it’s more than possible to remain independent these days. Helping physicians remain independent is another core function of Alo. Many practices we speak with consider joining the Alo Clinically Integrated Network because it offers continued autonomy along with strength in numbers and more resources.

Going through this exercise of thinking about the future probably won’t answer every question. But it will put you in the right mindset for pursuing big decisions, including whether it’s time to seek out further advice or a potential partner who can help chart your future.

Ted Cole is associate vice president of business development at Alo and Avance Care.