Top 10 Reasons Physicians Struggle To Remain Independent – And What To Do About It

Profitability

1. Financial/Profitability Challenges

The entire ecosystem of insurance-based health services today is designed to drive you out – or at least discourage you enough to make you sell to or join a larger organization. How many examples do I need to give you? You live with the imbalance every day.

Negotiation for reimbursement for insurance-based practices is a process that is clearly stacked against independent practices.

If you aren’t part of a larger organization with negotiating leverage (like an ACO, health system or strong IPA), your chances of negotiating rates that are fair to you are almost nil.

This disadvantage also applies to purchasing, recruitment of quality providers and support staff, health insurance for employees and continuously more complicated and time-consuming reporting requirements associated with value-based care imperatives.

The federal government and some state governments want to save boatloads of money and bend the health care cost curve on the backs of physicians and patients. Unfortunately, that is unlikely to change for the better regardless of changes to current and future political administrations.

What to Do About It:

  • You need a strong CFO to help you figure this out.

Hint: If you don’t have a CFO, you can “rent” one on a part-time basis for specific projects like this. There are fractional CFO service agencies emerging. Perhaps your CPA firm can handle this, but make sure that your CPA firm has a qualified healthcare team that offers CFO services. There are CPA firms with healthcare specialists that offer cost effective CFO and practice management advisory services that are having a positive impact on the industry.

  • You need a detailed analysis from your CFO of:
    • your insurance contracts (including Medicare rates and Medicaid if you accept it)
    • profitability of the top 80% of your billed services/procedures/products
    • your all-in operating costs of providing each major service/procedure/product
    • average collection percentage for patient out-of-pocket contribution
    • outstanding A/R lag time (insurance payments and patient payments)
    • cost of acquisition for new patients (sorted by initial services/procedures/products provided)
  • Once you have your detailed financial analysis, you have decisions to make regarding your desired and preferred service/procedure/product mix.
  • Some of these decisions may not be based or ranked on the basis of profitability (particularly for CMS services), but if you don’t have a business mix plan based to at least a significant degree on profitability, you will struggle to retain your independence.
  • This analysis will also help you with insurance rate negotiations, pricing for non-insured services and other operating cost considerations and budgets.

2. Overwhelm

Overwhelm

Overwhelm is common in healthcare today – for providers and for patients – and independent practices (providers and support staff) are no exception.

Overwhelm is exhausting and energy-sapping. It’s also paralyzing, dizzying and discouraging. You are always behind and don’t know how to catch up. Soon, you stop even trying and accept the constant “fog.”

What to Do About It:

  • Stop setting yourself up for failure.
    • Examine and address/improve patient flow inefficiencies.
    • Maximize but avoid overbooking provider-patient encounter times.
    • Resist the temptation to understaff. (There is a difference between underutilized and/or inefficient use of staff and understaffing.)
    • Organize and prioritize tasks. (Not everything is a crisis-level priority even if it feels like it.)
    • Make time for planning – even if you don’t feel you have time. Positive change doesn’t happen magically. It must be planned and skillfully executed.

3. Confusion

Confusion

Confusion and overwhelm are similar but not the same.

Overwhelm happens when we have too much information that makes it difficult or seemingly impossible to make good decisions.

Confusion occurs when you have the information you need but it’s not organized in a useful sequence.

What to Do About It:

  • Use a decision tree or grading scale to help you organize your information in a useful sequence to resolve confusion.

Example: Physician Independence Self-Assessment Grading Scale

4. No time to think (or breathe)

No Time

You find yourself as the hamster on the wheel of your own making. You are always running behind. You want to change your situation for the better but you can’t make the time to even think about how to do it, much less find the time to put in the work necessary to achieve positive change.

You are exhausted.

What to Do About It:

  • Reconsider your scheduling strategy. Being super busy does not translate into greater In fact, it makes you inefficient and ineffective.
  • You will only find time to think and plan if you force yourself to make time. If you are already too busy to think or breathe, you can’t add more time. But you can modify how and where you prioritize your time.

Steven Covey wrote about this in his best-selling “Seven Habits of Highly Effective People” and in his book on time management, “First Things First.”

Here is the essence of Covey’s matrix regarding how we consciously or unconsciously prioritize our time.

When you feel like you don’t have time to think or breathe, it’s because you are spending the vast majority of your time on Urgent/Important and Urgent/Unimportant activities. When everything is “urgent,” you become exhausted and numb and function on autopilot until you collapse.

Yet the biggest gains come from spending time on Important/Not Urgent activities. But when you spend all of your time in urgent mode, you can’t make time for the important but not “urgent” thinking and planning that gets you what you want.

Covey’s premise is that you buy time for Important/Not Urgent activities by minimizing Urgent/Unimportant activities. Urgent/Unimportant still feels urgent.

But spending too much time on Urgent/Unimportant activities is typically a result of failure to delegate, lack of confidence in delegating to your team or just convincing yourself that you can take care of it faster by just doing it yourself instead of teaching someone you can trust to take over these tasks.

5. Self-Fulfilling Victim Mentality

Victim Mentality

The quickest path to giving up all of your power to shape your own destiny is to see yourself as a victim of circumstances beyond your control. Yet, it’s a very common feeling among many healthcare providers.

If you have bought into this belief, you are already well on your way to making that mindset your reality. If you can’t change your victim belief system, your chances of success in independent practice are slim to none.

What to Do About It:

  • Create or recreate a business plan and strategy for your success in independent practice. (If you don’t know how, get help and advice from someone who does.)
  • Make an unwavering commitment to acting on and following your plan.
  • Avoid or remove all negative influencers from your practice (and your life). They will drag you down.
  • Close down your pity party and take back your power.

6. Unhealthy Fear of Failure

Fear of Failure

Everyone who is honest with him- or herself admits to at least some fear of failure. If you have zero fear of failure, you’re probably living in the land of denial or self-delusion.

That said, there is an important distinction to understand between a healthy and unhealthy fear of failure.

A health fear of failure can actually motivate you and increase your commitment to succeed. An unhealthy fear of failure immobilizes you and, in the process, virtually assures that your fear is realized.

What to Do About It:

  • Understand the difference between healthy and unhealthy fear of failure.
  • Accept (even embrace) healthy fear. It’s a motivator.
  • Recognize and reject unhealthy fear by having a plan to succeed.
  • Focus on what is under your control, not what isn’t.
  • Visualize your success. (What does it look like? How does it feel?)

7. Insufficient Commitment to “Failure is NOT an Option” Mindset

Failure not an Option

This issue is obviously closely related to the previous topic. In fact, a healthy fear of failure can drive you to commit to a failure-is-not-an-option mindset.

Whether you are in an insurance-based model, a cash practice or a combination of both, it’s increasingly difficult to succeed in independent private practice healthcare. You have to REALLY want it for the hurdles to not get the best of you.

Everyone knows the saying “Failure is not an option” but very few actually live that mantra in their business. No one wants to fail to achieve their goals but many do fail – and struggle mightily all the way down.

You are the only one who can define “success” or “failure” in your life and career.

You can have a profitable practice and still fail to achieve your goals and desire for greater profitability and long-term sustainability with less stress, chaos, overwhelm and frustration.

If you intend to become or remain independent, you must be willing to do whatever it takes, no matter how daunting and difficult. In successful independent practice, failure cannot be an option or you are doomed to disappointment.

What to Do About It:

  • Similar to what to do about overcoming victim mentality, the key to avoiding failure (or even disappointment) is found in creating a business success plan and following it unwaveringly.

Keys to “Failure is Not an Option” success in your independent practice

  • Set clear, measurable goals
  • Identify obstacles to goal achievement
  • Eliminate (or at least minimize) obstacles
  • Set timelines for reaching milestones (deadlines are even better)
  • Monitor results on at least a monthly basis
  • Make ongoing adjustments to your plan based on results trends
  • Have a “Plan B” ready before it may be needed

8. No actionable plan to achieve goals

Goal Plan

You can see how these issues overlap. Actionable planning has already been addressed several times in this article but it deserves its own place on this list because it’s such a common pitfall.

You’ve probably heard the well-known quote that “a goal without a plan is just a wish” and that “if you fail to plan, plan to fail.”

Both are absolutely true, but for so many physicians in independent practice today, they can’t even visualize a goal beyond getting through the day, much less a plan to achieve their goals.

Plans in any business are essential to goal achievement. In an independent healthcare practice, you need a revenue plan, an operations plan, a personnel plan, a financial plan and an implementation process for each plan.

Why practices so often have no actionable plan for goal achievement

  • Don’t know how to create the plan (or even where to start)
  • No time to plan
  • Constant changes create uncertainty and confusion about future plans
  • It’s someone else’s job and they are not getting it done
  • Disagreement regarding goals (common with partnership practices)

What to Do About It:

  • Solicit objective, expert, third-party input, observations, advice and direction
  • Research best practices of successful healthcare practices in your category
  • Make advance planning a high priority on an ongoing basis
  • Build your plan around measurable goals and timelines
  • Find an unbiased facilitator to help resolve disagreements among partners (if applicable)

9. Analysis paralysis

Analysis Paralysis

Doctors and other healthcare providers are particularly susceptible to paralysis by analysis. After all, you learn your clinical skills through a process of study, training and experience.

As a result, thorough (endless?) analysis and overthinking can feel like preparation and action, but it’s a trick your mind plays on you. Analysis can actually be comforting. Tough and timely decision-making is never comfortable.

What to Do About It:

  • Be clear about your objectives.
  • Give yourself an immovable deadline to make your decision and stick to it.
  • Make a list of your options and eliminate the bad options. (If they are all bad options, you have bigger problems than just analysis paralysis.)
  • Be aware of and resist your tendency toward overthinking. (Thinking is important; overthinking is stalling.)
  • Remember that perfection is the enemy of the good (and the done).
  • Accept that there is a chance that your decision will prove to be a mistake.

10. Burnout/Depression

Burnout

It’s hard to stay positive when everything seems stacked against you and you are constantly chasing your own tail. When you are constantly exhausted, frustrated and even disillusioned, burnout or depression (or both) are common and even predictable outcomes.

Burnout and depression are closely related and increasingly common among healthcare providers. Coping mechanisms deteriorate under constant stress over an extended period of time with no end in sight.

What to Do About It:

  • Recognize and acknowledge the problem
  • Don’t resist seeking professional help
  • Delegate non-essential tasks that are contributing to burnout and depression
  • Change things up
  • Rediscover your passion or discover a new passion related to your work
  • Take more breaks
  • Get more sleep
  • Spend more time with the people in your life that you care about most
  • Limit your contact with negative people

About the Author

Lonnie Hirsch has worked with thousands of physicians and other healthcare providers to help them succeed in independent practice in all areas of the U.S. over his 30-year career.

Lonnie has written hundreds of articles on the business of healthcare and has spoken at hundreds of healthcare conferences and seminars. He currently works with healthcare practice owners who are committed to becoming or remaining independent and need objective, expert advice, direction and guidance to achieve their goals.

Previously, Lonnie co-founded and co-owned a full-service healthcare marketing agency based in Southern California and serving a national clientele of independent practices.

About Lonnie Hirsch

Lonnie Hirsch, Founder and CEO of Hirsch Healthcare Consulting is one of the premier consultants and strategists for helping medical practices and hospitals across the U.S. and in other countries achieve profitable top line and bottom line growth.

Over a career spanning thirty years, Lonnie has worked with thousands of medical practices as well as hospitals, health systems, medical device companies, medical software companies and other healthcare businesses.

Lonnie has spoken at hundreds of healthcare conferences and has authored numerous articles in healthcare business publications. He has also interviewed many distinguished thought leaders in the field of medicine.

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By |2018-08-10T14:04:10+00:00December 12th, 2017|Healthcare|0 Comments

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