Physician Revenue Declines

As you know, all things physician have been my passion for ages. I follow all their trials and tribulations. Here is documentation about how these economic times have been making an impact in the physician space....

A Jobless Recovery Will Prolong Physician Financial Woes

by Elyas Bakhtiari, for HealthLeaders Media, October 8, 2009

If your revenue increased or even stayed the same during the beginning of the recession, then you're doing better than many physicians. The median total revenue in medical practices declined—for the first time in years—by 1.9% in 2008, according to MGMA's latest cost survey.

And revenue wasn't all that dropped. The median number of patients visiting medical groups fell by nearly 10%, and the overall number of procedures declined 11.6% between 2006 and 2008. During that same period, bad debt from fee-for-service charges jumped roughly 13%.

This new information offers some statistical validation for trends that many in the healthcare field have already witnessed firsthand. Patients are cutting back on elective procedures in hard times. In some cases, they're forgoing necessary medical care because they are newly uninsured after a job loss. Or they're struggling to pay their bills after a visit, leading to that increase in bad debt.

The publicly-funded safety net is becoming increasingly strained, as well. In many states, Medicaid rolls are higher than they've ever been—Medicaid covered about 42.6 million people in 2008, up 7.6% from 39.6 million in 2007—and governments are starting to cut reimbursements to physicians in order to ease the pressure on budgets.

Physicians seem to be surviving the way most businesses keep going when revenues disappear—they're cutting operating costs. According to MGMA data, practices reduced overhead expenses in 2008 by about 1.5%, and much of that came from support staff, which dropped in the survey for the first time in a while.

Overall, staffing levels stayed about the same in aggregate, which may indicate that some groups hired while others laid off workers, and it has evened out in the wash. It's also likely that healthcare workers, like employees in almost every sector, are forgoing raises or even taking pay cuts for the time being.

Keep in mind, this data is from 2008. Fresher data from 2009 will likely show an even drearier financial situation for medical groups, as many of the indicators have gotten worse this year.

When the healthcare economy will turnaround is tough to predict. There are already a few green shoots that suggest the U.S. economy has at least bottomed out—the stock market has been on a tear since March and the latest GDP estimates have been better than initially predicted.

But an improving economy doesn't mean physician financial woes will end soon. The underlying factors that have hurt medical groups are unemployment and strains on safety net programs, and those may actually get worse as the rest of the economy improves. Economists are predicting a jobless recovery initially; unemployment may climb past 10% while the rest of the economy rebounds. That means more patients losing their insurance or migrating to already bloated Medicaid rolls, and possibly further reimbursement cuts. And it means more revenue struggles for medical groups.
The old conventional wisdom that said healthcare is recession proof has been soundly dispelled by the current downturn. The new conventional wisdom is that healthcare is one of the last sectors to be affected by a recession, but also one of the last to recover.

It's still too early to tell if there's any wisdom in that.

I'm thinking the article gives us all pause.

Happy and healthy hiring. Success by design - one career and new hire at a time.

Lynden

Success by design. One great candidate and client at a time.

Happy and Healthy Hiring.

Lynden
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AZ - ENT

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Success by design. One talented physician and client at a time.

Happy and healthy hiring.

Lynden
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Great recruitment package may include:
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If you want more info - contact me today! :)

Success by design. One great candidate and client at a time.

Happy and healthy hiring.

Lynden
http://www.NextIteration.net
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Smart and Sassy Can’t Say Practical

I don't usually talk about my candidates. As a matter of fact, I make it a point to NOT talk about them to preserve and protect their confidentiality. However, I have to break my rule this once.

As you may know, I work with physicians usually. They come in all shapes and sizes. They are super smart and uber smart. There is a shortage of them in the US. Some work with recruiters to help them find jobs. Some have a hard time working with anyone. By that I mean, we have done such an awesome job of teaching physicians to rely on their own judgment, to trust their instincts and to reluctantly rely on others (beside a physician colleague) that they have a hard time delegating any part of their job search to someone else.

Now, just for a second, to intensify the pitch of my whine that makes them tough cookies to work with as a recruiter. Docs don't listen to your advice and they go off wandering alone – much like my seven year old. The real issue is that the recruiter is an asset to the physician. Recruiters have experience in that in which docs don't – finding jobs.

So, here is my rant. I've been working with a doc who has an offer in hand. He is interested in joining this great practice with people he is confident will be good to work with for a long time. He is and has been seeking attorney review of his offer. I applaud his desire to have attorney review. I believe that is a step every physician candidate should take. However, please know that it always: 1) adds time to the negotiation process; 2) adds expense; and 3) I've yet to see anyone go to an attorney and say, "I want you to find only the things that are right about this so we can move forward quickly." By definition, adding an attorney adds a layer of complexity to the process. Attorney's (I am one by training so I can say this with an insider's navel-lint-picking-perspective) HAVE to find something to correct. You'd be mad if you paid someone $500 or so dollars to have them come back and say, "everything is fine."

So, I've got this candidate with a job offer and the first attorney, one he selected, takes FOREVER to get back to him. Doc starts calling attorney and attorney has excuses about why he hasn't had a chance to review the offer letter agreement. Eventually, attorney stops returning calls. Doc is desperate. Super Recruiter (me) steps in and says, "lookie here are the names of well respected firms that I know 1) do this work on a regular basis, 2) guarantee that they will produce an answer promptly." Viola, a win-win for everyone. Doc even sends Super Recruiter a note saying thanks for the suggestions.

Next, what do I learn? Well, Doc has hired a new attorney. Yeah. However, it isn't one of the ones recommended by me, it is some other guy….so we are still waiting on the results of "attorney" review. Just for the record…it has been over a month. I'm sure that Doc will come back with feedback about the offer for my client soon. I'm sure eventually we will get to an acceptable arrangement between the two. I'm also sure that like my seven year old, I'll forgive him for this interminable delay and send him happily on his way to his new job. But, just for the record, if he had listened to me, sought my advice and allowed me to be a true partner to his process the offer negotiations would have been over at least two weeks ago and he would be working with the relocation specialist by now rather than still being up in the air.

Ok. I'm done. I just think that sometimes we "do what we think we need to do" without thinking about the consequences. In this case his prospective employer is learning something about this Doc and what it is like to work with him. Not all these impressions are good. Wish it was different, but in this instance the Doc choose to do his own thing and I will support him to the finish – cleaning up behind. Food for thought.

Happy and healthy hiring and job searching.

Success by design. One candidate, good advice and retention tips at a time.

Lynden Kidd
http://www.nextteration.net and www.nihealthjobs.comhttp://www.linkedin.com/in/lyndenkidd