Urologist vs Professional Tennis Player: Revisted

Someone on the way up and someone on the way down

Congratulations to the victor!

Once again, the US Open comes to NY and I love it. I go every year, both to the qualifiers and to the main draw. It is my favorite time to be in NY.

Personally, I think the qualifiers is better than the main draw, at least the first week of the main draw. Aside for the lack of crowds, you get very excellent tennis matches with lots of drama. You see players on the way up, and some on the way down. Most are never-wills. You also get to sit and talk to coaches and parents and player entourages in a way that is simply impossible during the main draw. You can learn some things and see that life is tough all over!

Players in the qualifiers must win 3 matches to make the main draw. Winning only once or twice during this week results in a big fat zero payout. If theplayers win all 3 matches, they make the main draw. Just being in the main draw, even with a first round loss, is worth a couple grand. Most, if not all qualifiers will lose in the first round. So 16 players will work for a solid week--and work very hard--and make only 3 or so grand. Factoring the cost of travel, lodging, coaching, food, clothing, rackets, stringing,etc. . .they don't do so well. The remaining 112 players, those that lost during the Q week, do even worse. They make nothing.

The 2 players in the picture up top are Victor Estrella and Xavier Malisse. Victor, the player on the left, was the victor. He is a young Brazilian on the way up. Xavier, the other player, was a former top 50 player who was considered a real contender at one time. He was a media darling as well, in his younger days, and had long hair and a flamboyant persona. Unfortunately, his career did not turn out as he, and others, had hoped it would, and he has been struggling. I guess his short hair is a symbol of his new-found-focus. Perhaps it is to little to late. I wish him well.

I did peruse the draw and roster of competitors from this years tournament and I did not recognize any players from this year that played last year. Maybe that is good sign and means that all of last years players made the main draw this year.

I doubt it.

I did recognize one name in the Q-tournament draw, Nicholas Massu. He is a former Olympic Tennis Gold Medal winner in 2004 and top men's player. I wonder what happened to him.

In urology, most of my own colleagues are still practicing and most urologists in my area can report higher incomes than last year because of a stregic merger of competing groups. I don't know of a single urologist that has left practice in Long Island due to the competition or external factors such as rising costs of living.

Recently Medicare has not been paying in a timely fashion. I know of one urologist that sees 95% Medicare patients. He has only received $1700 in reimbursements in 2008. For the rest of us urologists who see a mix of patients from a mix of payers, 3 days of work brings in considerably more money than the majority of qualifiers earn in a similar work week.

During Q-week, I watched the qualifiers struggle. I witnesses intense happiness with victory and devastation upon defeat. I saw several players at the end of their careers; no doubt faced with the question that I faced several years ago; "what next."

For me, as I watched the qualifiers compete, I felt comfort in my own situation. I am my own boss and my outlook is positive. I call my own shots. My wins are mine alone, as are my losses.

I think I am better off as urologist than a professional tennis player, aside for the fact that I really not very good at tennis. As a pragmatist, I know my earning potential, even with the current reimbursement landscape, is better than for 99.999% of tennis players.

So for now, I practice urology by day and play tennis by night.

And go to The US Open every August. . .the best show in NY.

What do you do with all those radiology CD-ROMs?

In the past, doctors, especially surgeons, would request radiologic images on films and would review them on light boxes in their offices. However, in the past 5-7 years, actual films have become somewhat of a rarity. Instead, CT scans and other images can be viewed either over a secure internet connection or via a CD-ROM that contains the images and the software necessary to view them. Personally I have found this changed approach to the viewing of radiological studies as a huge plus, with one exception.

What are we supposed to do with all the CD-ROMs that patients hand to us?

When I had paper charts, I used to simply staple the jacket that contained the disk to the patient's file. This worked ok. But now I have electronc charts. So now what?

Here's how I do it now.

1. Place the disk in the drive
2. Go to My Computer and open it up
   
3. Right click on the icon for the image viewer in the DVD-CD reader
4. Click Explore to open the files on the CD-ROM
5. Select ALL, then Copy
6. Create and label a new folder in the pertinent patient's folder
7. Paste the files into the new folder

And now you have the images saved and you can shred the CD-ROM.

Alternatively, you can ignore the CD-ROMs since you are under no obligation to save them in your files. The radiologist is the one responsible for ensuring that the images remain available for the time period specified by state laws.

However, I find that when comparing old studies it is nice to have images saved in a location that allows for rapid and effortless recall.

The "Green" Consent: Consent Foms On-Demand

I have developed a simple method to get written informed consent from patients in way that completely eliminates paper waste and ink usage while simultaneously maximizing efficiency and the "wow" factor.

Here's how it works.
I composed 5 or 6 consent forms for the various procedures that I do in my office. These procedures include cystoscopy, prostate biopsy, testicular biopsies, and penile duplex scans. I developed the consent forms myself and worded them in English rather than legal-ese. Since I am neither crazy nor stupid, I did have them approved by an attorney.

I keep the consent forms in a directory called "CONSENTS." The documents are MS Word 2007 files. Word 2007 has a great feature: it enables documents to have multiple signature lines. In my consent forms, the documents have 2 signature lines. One line is for the patient to sign and the other line is for me to sign.

After the patient and I have our informed consent discussion, I copy and paste the consent form from the "CONSENTS" directory into the patient's folder. I then type in the patient's name and date and then here comes the cool part. I swivel the tablet PC so that I can use it like it's a piece of paper and I slide it across the desk to the patient. He/she then reads the document right on the Tablet PC and if he/she agrees and understands it, they sign it. Then I take the tablet back and sign it as well.
After my signature is completed, the document locks so that no further changes to it are possible.
Done.
5 goals have been thus accomplished:

1. A necessary legal consent form has been obtained.
2. The consent has been placed in the chart forever.
3. The process was done efficiently, inexpensively, and with considerable "cool" factor.
4. It was accomplished with off-the-shelf software.
5. Not a shred of paper was used!
   

I like it. How about you?

Want to negotiate with insurers? You better have these characteristics.

I had a conversation the other day with an expert on negotiating insurance contracts on behalf of doctors, groups, and hospitals. Here is what she told me:

"I am going to be brutally honest doc, because I don't want to just take your money, but you don't have a chance in hell."

Essentially, what anyone needs to successfully negotiate is leverage,which is what doctors in NY-metro just don't have. There are simply too many of us in every specialty. In fact, this woman told me that the panels are over filled already and that she spends most of her time just getting new doctors accepted into the plans under any terms. While it is not impossible to get a better-than-average contract, it is difficult. Essentially, you need to be special to do so. Here are some of the key elements as I interpreted them based on my conversation with the negotiator.

1. Unique: If you are the only one of your specialty in a 20 or so mile radius, you may have some leverage.
   
2. Efficient: If you can save the insurer money by operating at a lower cost to them, such as by doing in-office procedures, or with less errors due to an EMR, you may be able to make a case for the insurer to cut you a piece of the action in return.
3. Desirable: If you are one of few doctors who does something that people want or need and will pay more to the insurance company for it in the form of premiums or plan selection--then the insurer may cut you into the action as well.

Notice that large size is not on the list. Size can work for you if your group becomes so large that it controls the market place. In a larger market place, such as NY, reaching this critical size can be difficult if not impossible. In addition for most large groups, lets say a 50 person group or larger, operating expenses become so high that they can become unable to sacrifice a contract worth 20% of their revenue. They simply could not survive the acute loss of revenue. Well managed groups, ones that know their numbers inside and out, may be able to determine if they can play hardball with an insurer and survive for the year or so that is needed to recoup the lost patients that will follow the lost contract. So know your numbers!

Finally, if you do successfully negotiate, don't brag about it: that could cost you the contract. . .and more. Most plans make their "special" docs sign strict confidentiality agreements with draconian penalties for non-compliance. So the next time you hear a doctor in the lounge bragging about his great negotiating skills know that he is either crazy or full of crap.

Therefore, don't feel like you are the only schmuck on the block that takes whatever contract is offered you. If you live and practice in an over saturated market and don't have one of the big 3 characteristics in my list, you simply must sign on the line and work like a dog.

Good luck.

The IU.

Can't get affordable insurance? Start your own company.

Four years ago, an emergency medicine physician in south Florida was asked to pay liability premiums that represented greater than 1/3rd of his entire revenue and he could simply no longer afford it. Rather than flee the state, grin and bear it, or bitch and moan, this physician studied the issue and came up with a solution. He started his own insurance company. Fours years later EMPAC, the company founded by that physician, has become a very successful and profitable liability insurance company-RRG that underwrites emergency medicine physicians only.

2 years ago, a urologist, Ernie, in Nevada became fed up with double digit increases in his premiums that made it difficult for him to simply remain in business. Rather than flee the state for a more hospitable environment, he drove himself to the offices of the Nevada Department of Insurance and "ranted and raved." He wanted answers. He wanted solutions. A persistent individual, Ernie was not about to give up until he had a solution. Ultimately, an official in Nevada's insurance office gave him a name of someone in Florida who started an RRG for emergency physicians.

Ernie called him. And he called him again. And again. And again.

Over an 8 month period Ernie would not go away and he would not take no for an answer. After 8 months, Ernie had convinced this person in Florida to help him start a new company with him. The new company was to be called SCRUBS. Ernie's Florida contact was the founder of EMPAC; the man who started that company out of his own necessity.

Ernie and the EMPAC founder along with his EMPAC founding partner, personally risked $500,000 to fund the cash reserve requirement needed to obtain an insurance operating liscence in Nevada. They hired outside consultants to administer the plan and they flew around the country to meet with urologists and urology administrators and to promote the new product. In order to operate as an insurance company, SCRUBS would need at least one policy holder. Ernie risked once again and dropped his traditional policy to become SCRUBS first and only policy holder. The entire company, all 3 or them, prayed that Ernie would not get sued.

Both Ernie and SCRUBS survived that first year and looked to grow the company in 2008. The 3 managers of SCRUBS knew that New York's urologists were ripe for the taking and they concentrated promotional efforts on this group. SCRUBS' management obtained a list of practicing urologists in New York and elsewhere and sent a flier.

While the 3 SCRUBS managers worked on their problems, I had problems of my own and was facing the double digit increases in insurance premiums that most of my urology colleagues faced. At these 15% rates of increase--compounding of course--our premiums were to double every 3 years and would have crossed the $100,000 threshold by 2010. At the current rate, many of us had to work without a paycheck for 3 to 4 months just save enough for July's premium, its increase, and any additional surcharges that often accompanied them. By 2010, I'd be done without intervention from Albany or elswhere.

In February and March and I attended medical staff meetings and joined grassroots efforts to effect change at the capitol. I became an activist, I pleaded with Albany and begged "them", to not let us doctors go under.

But there is no "they", and what "they" there is does not care about "you"; well certainly not about me.

In mid-April 2008, I recieved a flier from a company called SCRUBS, an RRG that only underwites urologists. Fed up with "them" and "they" and and a future that in the absence of course-change, would lead to certain demise 4 to 5 years hence, I responded to the letter and sent in an application. Several weeks later my life changed, or at least my outlook changed. SCRUBS had answered me. SCRUBS had agreed to underwrite me at considerable savings now, stable premiums into the future, and the possibility of premium reductions as the company grew.

In July 2008, I joined Ernie and became SCRUBS second policy holder, and the first in New York. As of today, I am one of 45 urologists across the nation who decided to take a chance and change course; to take control of our destinies. Our future is still uncertain, only now it is hopeful.

Wish us look and good fortune.

The IU.

Referral Pads or a Plate Full of Feces?

The following story is true.
It is in no way exaggerated.

I had some referral pads made up recently. I personally like referral pads. I use them in my own office and a good one can influence where I send my patients for referrals, tests, and studies. For me, a good pad fits easily on a corner of my desk, has just the tests that I want in check box format, room for the patients name and my name, and how I want the results reported. Several of the labs and imaging centers that I use have referral pads that fit these criteria and I admit that I send more than a fair share of patients to these centers, rather than other ones, because of the pad. Of course, these centers do quality work as well.

Because of my own use for referral pads, I had some made for Richard A Schoor MD PC. The pads met all my criteria and were professionally designed and printed. They costs me ~$1000, total. My plan was, and still is, to distribute them to referring docs and potential referring docs via a practice rep, ie Janet.

Yesterday, I had some slow time and I learned of a new doctor that recently started practicing in an office next door to mine. She is an OB and joined a doctor that I have excellent relations with and view as a friend. So I stopped by myself to see them both. Now I no longer typically do this because one, I'm too busy,and two, I don't like being mistaken for a Pharma rep. But on this day, why the hell not!

I went to the reception desk, said hello I'm Dr Schoor, is the new doc here, or something to that effect. The staff was very friendly and replied that the new doc was not there but that she would be in the next day.

So I left my calling card and then asked the receptionist if she had any use for a referral pad, as I slowly extended my arm with pad in hand.

The receptionist immediately recoiled. In one motion she rolled her chair back 2-3 inches, put both hands behind her back, turned her face to the left, and said "no we don't use those."

It was like I had handed her a plate of feces. Incredible really.

I had to look back at the pad to make sure nothing was on them, like urine, blood, etc. Of course, the pad was pristine, all white and blue.

I wonder what I did wrong here. . .

Wine as gifts for doctors

I like this piece.

Doc vs World: How to Survive Long Term

The cost of running a medical practice has skyrocketed over the years. In this same time period, the reimbursement for our services has declined tremendously. While many of us may generate the same or more gross revenue than we did years ago, we have done so only by increasing our through-put; ie the number of patient encounters that we see per year. Clearly, this compensatory mechanism is limited, unsustainable and ultimately very costly to us doctors both personally and professionally. In addition, our patients pay a high price as well in terms of their declining satisfaction, decreasing access, and an increase in adverse outcomes. Like being on an desert island with a limited water supply, if you want live for many years to come, you better get off the island. If you are a doctor and want to be around and happy in years to come, get off the island while you still can.

My name is Richard A Schoor MD FACS and I am The Independent Urologist and a solo practice survivalist. I have been in some tough jams over the past few years and have come out stronger and more resilient than ever. Recently, I and many other doctors, survived a 10.6% Medicare pay cut. Of course the actual income loss, factoring in decreased reimbersements from private insurers that were sure to follow Medicare's lead, would have been closer to 20%. For many of us, that would have been death. What does this mean?

It means that the future is clear. It means that you best start building your raft and planning your escape.

How do you do escape? You plan.

You know what the future will bring if you stay the course, so that is not an option. But you probably know others who seem to have your "dream practice" and these doctors' practices can serve as templates for you to emulate. Simply call them and ask them "how'd you do it." More likely than not, they'll tell you, especially if you are not among their direct competitors. Ask them how they built their practice, which marketing vehicles were beneficial and which stunk, if they negotiated with payers or just took the cash-only plunge, how they dealt with referral sources; anything you can think to ask them. In my experience, these people are proud of their accomplishments, as they should be, and are glad to talk to about themselves. If you have a blog, offer them a guest post. If they don't have time to write, you offer to write about them and to provide their website with inbound links and a favorable web-plug.

When you have done your homework, then you must develop your own plan. And you must commit your plan to pen and paper. Once your plan is written down, it will take on a life of its own and become a reality. If nothing else, at least you'll feel like your fighting and not just being swept along, for whatever that is worth.

January 2010: a storm is coming. Will it kill you or will you be prepared?

Make the plan. Be prepared. Live. Thrive.

Thanks.

The IU.

Reunited with an old friend

I was recently reunited with an old friend, a very good old friend in-fact, that I had lost touch with several years ago. I'll call him The Kid, and he was my college roommate. He stood at my wedding and I at his and we shared many terrific memories over many years. He was always a loyal friend and I know we both regret that we lost touch 5 years ago. In any case, water under the bridge.

I think that many people would say that I was good role model for the kid. I think that Kid's parents felt that way. Maybe I was. But I saw things differently. It was kid that was my role model.

Kid was our fraternity's social chairman, and he was the best one we had ever had. he approach the job with passion and zeal and a business plan. Yes that is correct: a business plan.

After graduation he went to work for his dad and then his dad sold the company and the kid found himself without a job. He moved home and into the bedroom of his youth, complete with twin bed and "Marc" on the door. Not a very glorified life for a college grad. But the kid was not phased. He got a separate phone line and he promptly started a business. It was called Marc Photo and Marc was the only employee. Kid would answer the phone that was next to his twin bed "studio." It was hysterical. When I drove with him in his car, he'd be playing audiobooks on business topics. While other friends of ours thought it was pathetic and would joke that Kid couldn't read, I thought it was terrific. I saw Kid as hungry, clever. He'd be on the road so much promoting his business, that he used the time as productively as possible, hence the audiobooks. It was brilliant,really. I never doubted that he'd be a success in business. Within 5 years Kid had transformed his bedroom company into a multimillion dollar commercial photography and design business.
Though far from Kid's multimillion dollar company, I have my own successful urology practice now and I've become very busy in my office and life. On top of work and an old house, I have 3 kids, i.e. children, of my own, and I have very little time or energy to read, whether it is for pleasure or business. What have a done? I have taken The Kid's lead and have turned to the audiobook. Phenomenal! I can download the books from the internet and listen to them on my desktop at work, on a iPod as I lay in bed with Emma and wait for her to fall asleep, and on CD while in my car. It has really been nice and in the past few weeks I have "read" 5 or 6 books and have learned some new things. Sure my wife makes fun of me because I'm not really reading, but I assure you I know how to read just fine.

Kiddo, it was great seeing this weekend and thanks for re-entering my life. I can learn a lot from a guy like you. You've been a huge success in business and many of the things I've done that have worked, I learned them from you.

Let's keep in touch buddy-boy.

Waiting with baited breath.

How will they vote?

Waiting for our leaders to lead. . .we will remember in November!

Doc vs World Episode 4: Risk Avoidance

If you don't parachute, your risk of dying in a sky diving accident is zero.
If you don't let your children swim unattended in a pool, you can minimize the risk of a drowning incident.
If you stay in your home between 11PM and 5AM, your risk of injury from an alcohol related incident can be significantly reduced.
If you perform surgeries that are well within your skill set, you can minimize your risk of an adverse event and resulting legal issues.

My name is Richard A Schoor MD FACS and I am urologist in solo practice in Long Island. As urologist and physician I am well versed in risk and each day that I awake, I face plenty O'it. But I don't take unnessesary risks.

While risk is unavoidable, unnecessary risk is avoidable.

If you are a urologist, for example, you can get into trouble during a surgical misadventure, an informed consent issue, missed diagnosis, or a failure to act on an abnormal lab. If you are a urologist, these problems are not completely avoidable, but they can be minimized. For example, many a urologist has had problems arising from failing to act on a positive lab test, such as a PSA or cytology, namely because they never saw the test. This type of error happens for several reasons:

• the patient fails to go for test
• the test result is never sent to the doctor
• the test result is sent to the doctor and filed without the doctor's knowledge
• the doctor sees the test and chooses to not act upon it for some reason, though never documents the rationale for that action
• the doctor and patient have a discussion about the lab test, and that discussion is not documented

In a significant portion of the above instances, it is the patients themselves that fail to go for the test. The easiest way to eliminate this risk is simply to do the test in your office or to obtain the specimen in your office. If you want the patient to have a PSA, draw it yourself.

Risk minimized.

In today's environment of zero tolerance for medical errors and high liability rates for doctors, it is simply imperative that doctors avoid taking on any extra-risks. You can examine your own processes and identify areas in which you are assuming extra-risk that is simply unnecessary.

Get rid of it.

The IU.

A butcher without an advantage

My son is turning 1 and my wife and I are having party. Not anything fancy, mind you, just a barbecue by the pool with family. This weekend while driving on 25A in St James we noticed a new butcher that had opened next to our favorite pizza place. Looking for something unique for the party, we decided to stop in see what the butcher had.

He had what every local supermarket had to offer, hamburgers, hot dogs, steaks, chicken breast, ribs. Nothing different. Nothing unique.

How is this place supposed to survive?

What is his competitive advantage?

Perhaps if he had very high end cuts of meat that I could not get at the Stop & Shop. But he didn't.

Perhaps if he had unusual meats, like impala or a TurDucken, but he did not.

Perhaps if he specialized in free range, organic, or local only animals. But he does not.

How does he plan to compete? Beats me.

Maybe he should get a competitive edge.

Location, Location, Location

A perfect night for fireworks.

A terrific view.

Blocked by the 59th Street Bridge. When it comes to real-estate, BPH, and now fireworks. . .it is all about location.

The Medicare Cuts

Now everyone calm down. The sky is not falling in and the world is not ending. What has happened is that the Republicans, led by our fearless leader, has screwed us. But all is not bad. You know why?

Because if you can survive without Medicare then maybe you can become independent of Medicare. And then just maybe you can drop them on your own terms.

Just maybe this whole thing is a blessing in desguise.

Think about it. Plan for the next time. Transition your practice to be independent. You may not be able to fix the system, but perhaps you can fix your own lot.

Just thoughts.

Even a solo guy can take some time off

A tail gate party and salza dancing at Sunken Meadow Park, Kings Park NY.

Fisnhing on the pier, Sunken Meadow Park

BobBob and The Beeshee boy. . .my little boy. It is good to get out, see the community, and gain some persective.

Doc vs World: Episode 3

My name is Richard A Schoor MD FACS, and I am a urologist in solo practice in Long Island. In this day and age, the solo practictioner is the medical equivalent of the eco-survival specialist: without the proper skills, knowledge, and a bit of luck, you can die out here. Like my true survival specialist-alter-ego, Bear Grylls, I have amassed quite a bit of experience in survival, only in the harsh medical landscape rather than the jungle, the desert, or the tundra. While I have not had to eat bugs, snakes, or carrion to survive, I have had to eat a lot a crap!

Today, I will be trying to survive the double digit increases in malpractice insurance liabilty premiums that are facing New York's physicians. Of course New York is not the only state in crisis. Just ask any doctor in Florida, New Jersey, Massachusets, or Pennsylvania and they can tell you that thriving is no longer the goal. Economic survival is the name of the game.

Here's how to survive dramatic rises in liabilty rates.

One, you must budget, budget budget. And not just your office finances, but your personal ones too. You may need to float your business with a personal loan in the case of cash flow disruptions in the office and vice versa. In the office this means being an absolute miser. Negotiate for rock bottom fees with vendors, turn off your lights, disallow overtime, hire part-time employees, hold on to bills as long as long as possible; essentially do more with less. Put off that vacation untill things get better.

Two, you must plan for the future. The rates will go up this July. They will go up more next July, and still more the following one. When it comes to liablity insurance rates in NY, the direction is and has always been one way--up. Knowing this, one can plan an escape. In the time frame of a year, any physician can relocate to another state, join a practice, and start again. You may take a loss on your house, but ultimately you'll come out ahead. Even in states with long lines for licenses, the whole process can be completed in 18 months, tops. You should know financially if your practice can survive this July's increase and even next July's, so realistically you have 24 months to get out of Dodge. When faced with certain demise 3, 4, or 5 years hence, or survival with a calculated risk, take the risk.

Three, look for alternative insurance vehicles. In the last few years, deus-ex-machina has come in the form of RRGs. RRG's, or risk retention groups, are insurance mechanisms that cover businesses of similar risk characteristics when tradional insurance has become too expensive. Congress passed the federal law that allows for these RRGs inthe 1980s and since then many have formed in a variety of industries, including medicine. Anesthesiologists have had successful RRGs for many years and while the rates for anesthesiologist with traditional insurance companies have risen , anesthesiolgy rates have actually dropped for those covered with the RRG. There is an RRG for emergency physicians and even one for orthopedics. A new one, called SCRUBBS, is being formed for urologists. RRGs are under ferderal jurisdiction, rather than state control. As a result, insureds can move about the nation and retain their policies. On the downside, since RRGs are not under state insurance rules, insureds have no protection--zero--when these companies go bankrupt. In other words, switching to an RRG is risky, but survival and calculated risk go hand in hand.

Lastly, do not ask for devine intervention, providence, or the good will of others to protect you. In the wild, it is survival of the fittest. Same thing here. Many people I know have said the following: "they can't let doctors in NY go bankrupt." I say bull. This type of logic has led many people, cultures, even civilzations to their downfalls.

Eight years ago I stood among a bunch of obstetricians before grandrounds and listened to them gripe about their malpractice premiums. At the time, they were asked to pay $90,000. "How could it get any worse?" said one. "Albany will intervene" said another. Now these same docs are paying over 200K per year and Albany has done squat.

Albany can let doctors go bankrupt and they will. No help is coming. You're on your own.

But you have the tools to survive. Stay calm and use them.

Good luck.

The IU.

Why is a manager worth their incomes?

I recently posed that question to a bunch of practice managers on a listserve and got some great feedback. A good practice manager is worth their weight in gold, as long as they exhibit excellence in the followings areas:

• Human resource management
• Billing and coding
• Payroll
• Business development and strategy
• Information technology management
• Risk management
• Financial management
• Contract negotiation and insurance company management

I could not agree more. A good practice manager is truly worth their weight in gold and can help you generate income, run a business, and be a doctor.

Thanks.

How can an established medical practice go under? It is easy.

The used to be a saying that went something like this: there are no starving doctors. When I decided to become a physician, in 1987, that was certainly true. Now, established practices that have served communities for 40 or more years are going bankrupt. The question is how can this be happening?

It is actually quite easy. Here's how:

1. Take a practice full of established patients that are older and sicker.
2. Combine that with rock bottom reimbursements especially for that exact patient demographic
3. Add to this brew soaring medical liability premiums and rising payroll costs

. . .and you have a ship on the verge of foundering.

Then throw onto the already struggling business disruptions in cash flow, the inability to get additional financing, ie loans, and rising energy costs and voila, the ship goes down like a rock.
Very easy indeed and it can all happen in the span of 3-4 months.

Here's how to defend your practice from this demise.

1. Have 3 months of operating expenses for the business, minus your salary.
2. Have at least 3 months of savings to cover your personal costs.
3. Develop a 5 year plan for your practice and strive to achieve it.
4. Know your numbers amd metrics inside-out, backwards and forwards.
5. Be lucky!

Good luck.

Doc vs World: Episode 2

Imagine this:

• You're an orthopedic surgeon and part of a group. You have 3 partners, 2 of whom have been in the practice for 15 or more years. You are a partner, but not a managing one. What that means is that you come to work, do your thing, and get "partner's pay." One day, the managing partners call a meeting. In the meeting, they ask that all employees go 2 weeks without a paycheck because the practice is out of money. The partners, they say, will go without pay "until further notice." What do you do?

You don't believe this scenario? Believe it. This exact thing is happening in an orthopedic group with which I am familiar. So, again what do you do?

Well first, as a partner you must make it your business to know about the financial health of your business. You are a partner and it is your right. In this case, however, your options will depend on your answers to several questions.

1. Do you have savings?
2. Do you have another source of income?
3. Do have good credit and can you get a loan?
   
4. Are you willing to relocate?
5. Have you planned for this contingency?

If you have savings or a source of income that can last 1 year, you can go off on your own. Otherwise, I don't believe that this is a viable option, unless you have an established practice, a loyal patient and referral base, and an unenforced no-compete clause. In that instance, you may be able to become cash positive in 2-4 months. Here's how to start.

1. Get phone.
2. Get a box.
3. Get an address, even if it is a PO Box.
   
4. Get all your provider ID information and credentialing information gathered and organized.
5. Put all of the above information into the box.
   
6. Set-up a new PC or LLC.
7. Get a biller, even if you need to out-source it.
   
8. Change your provider IDs to your new location and your NPI to your new address.
9. Find office space or sublease on a per diem basis if need be.
10. Collect all copays.
11. Do not submit ANY claims until all provider IDs and your NPIs have been confirmed as switched, unless of course you want your old employer to get all the money.
12. Answer your phone 24/7.
13. Tell your kids they ain't going to camp.

Good luck. But there is a lesson here. Whether you are a partner or not, as a doctor you are a small business man. You must know the details of your business and you must have an exit plan. This disaster plan must be in place even during the good times. When the bad times come, they'll come plenty fast and your plan could save you. This plan should include savings, alternative income sources, your own insurance policies, knowledge of the competitive landscape and possible employment opportunities and even a license to practice in another state.

I hope this never happens to you, but if you're reading this intently, I suspect it did. Contact me if you'd like.

Again, good luck.

Doc vs World

Imagine being safe in group practice then walking into work one day only to find yourself out of a job. Happens everyday. This is the economic equivalent to being in a shipwreck and stranded on a desert island. What would you do?

Your first priority is to not panic. Panic will prevent you from calling up all your survival skills learned in school, training, and life. Time is of the essence since cash reserves will quickly dwindle away and if you don't start generating cash flow, you'll die. Panic just gets in the way and prevents you from developing a survival strategy.

Your first step is to make a business plan, set-up shelter, ie an office, and start foraging for food, that is customers. All this must happen simultaneously and in a timely manner. The survivor's business plan is a simple and rough one. You can revise it later. Just jot down your long term goals, your short term goals and needs and strategies to achieve them; should take about an hour. Your office can be virtual rather than physical and foraging for food really means to do what it takes to get customers. On a desert island, make a fishing pole or net. In start-up, get on the web and start answering your phones. I can't tell you how to make fishing gear out of bamboo, but I can tell you how to set up an effective and inexpensive web presence in under 1 hour.

I was inspired last night when watching Man vs Wild, on the Discovery
Channel. Aside from having to eat carrion, opening up on you own has
many elements of pure survival. I hope you enjoyed the first
installment of my new series, Doc vs World: Surviving Your Start-up.

Good luck.


The IU.

A hidden cost of an EMR

EMRs are energy suckers. If you have and manage your own server, the energy requirements can be enormous. I have 5 work stations, all networked, and they all remain on 24/7. I can turn them off, but I often need to access them remotely. I don't have a server and am thankful for that. Servers require large amounts of energy to run, cool, and maintain.

If you use windows based workstations, you may wish to adjust the power schemes to save money.
Here's how:

1. Start
2. Control Panel
   
3. Power Options
4. Power Schemes
5. Select the one you want

I tend to put the lesser used computers into hibernation mode after 20 minutes of idleness. Hibernation allows the computer to stay on, but at lower power-usage. The computer does not need to be re-booted and it will save projects between hibernation cycles.

In this era of rapidly increasing energy expense, little things will go a long way.

The IU.

SIZE. IT DOES MATTER.

When it comes time to pick an office, size matters. An office that is too large can be problematic for obvious reasons, namely that you will be paying for square footage and utilities that you don't need. Conversely, when the office is too small, the working environment can become cramped and unpleasant, and, even worse, you may not be able to maximize revenue producing business because you simply lack the room. However, all things considered, when it comes to office space I feel that smaller is better.

Here are some advantages that small offices have over large ones.

• No need for expensive intercom systems
• No need for dumb-waiters or tube transport systems
• Easier inventory control
  
• Lower rent
  
• Lower maintenance costs
• Lower utility bills

Let me explain some more. I can overhear every conversation in the office when my office door is open. This comes in handy when situations arise between staff and staff and staff and patients. If I need something from my MA, I can intercom her, but I typically revert to a more vocal paging method.
During a patient encounter in an exam room, everything that I could possibly need is within my arm's reach. Last year, my electric costs were ~$50 per month. Now, thanks to our current energy predicament, I pay $150 per month. If I had a 3000 square foot office, I'd probably pay double or triple. I don't have storage room for much, so I order supplies "on-demand." Whether that saves money or not, who knows. But it works for DELL. My office can be cleaned by my staff in 20-30 minutes. This is important for 2 reasons: costs me less and makes my office more secure.

See, small is better, at least for office space and now automobiles. Prerequisite: EMR.

Good luck.

The IU.

Doctors have it better than fisherman. . .for now.

I went fishing this weekend in Montauk--Long Island's eastern-most tip. I went on a charter full of amateurs and pleasure seekers. The boat was staffed by pros; fisherman that had done everything from "swording" on the grand banks to crabbing off the Aleutians. I am a terrible fisherman and have not ever caught a fish, but I love talking to people and learning about what they do and how they earn a living.

The man in the picture is a professional fisherman. He has fished on commercial boats all over the Atlantic. From talking to him, I learned that I have it pretty good as a doctor, even when I was a resident. Fishing boats are generally under corporate ownership yet the crews that staff them are independent contractors; that is they are 1099-ers. Like independent contractors anywhere else in the US, fisherman must fund 100% of their health insurance benefits, retirement accounts, and business expenses, yet have very little in the way of the tax advantages afforded to other corporate structures. On top of that, in a quirk unique to maritime law, the owners of the fishing outfit do not risk the financial losses that can occur in the event of a poor fishing season. The crew takes that risk.

For example, as I was told, if the ship brings only $15,000 worth of fish, but the expenses for the expedition were $20,000 , the crew owes the company $5000. The employers don't lose the money, the employees do. In the case of a good haul, the owners can keep up to 60% of the profits, and the crew splits the remaining 40%.

The employees risk not just life, but money, on every outing. The employers risk nothing.

Contrast that to my life. I have 3 employees and I'm the employer-owner. My overhead is in the $16,000 range per month, often up to $20,000. On good months, when I exceed the overhead, I take it all the money. On months that I fall short, I eat it all of the loss. My employees get paid regardless of the profits or losses in any given period. When times are great, perhaps they are envious of me. When times are bad, they make more than I do. With the exceptions of maritime law and CEO pay, this type of arrangement is true for all businesses in the USA.

So what I took away from the fishing trip--other than some fluke--was that doctor-employees typically have it better than doctor owners at present. Fisherman employees have it far worse than doctors or boat owners. Doctor-owners and fisherman face similar challenges; namely an environment that is largely outside their own control and one that is only getting less bountiful.

Again, just my observation.

The IU.

A great use of technology

Congrats to the Axiom Law Firm for using technology to lower costs and expand reach. They don''t have an expensive, high rent corporate office. Instead their attorneys' offices are virtual; in their laptop computers. All computers are networked to a central server and attorneys can meet with clients anywhere.

A great model.

Can it work in medicine? Already does. I know generalists that don't have an office and do all work while on the road or by electronic forms of communication. Aside from the insurance implications of this type of practice, from a logistical perspective, the virtual physician office can work quite well.

Can it work for a urologist? I have thought about this long and hard and have yet to come up with a good solution. I simply need an office to do my work. I don't need a big office, thanks to computer technology, but I need an office. While an attorney can talk with a client at a coffee shop with some degree of privacy, I simply have not figured out how to do a prostate exam at Starbucks.

Still, the standard operating procedures for physicians are changing. Large offices and large staffs have now become liabilities. Physicians can share offices, yet have completely separate practices; practice management, EMR, and phone systems, all at low cost, can be set up easily so that they are not shared amongst the doctors. I can see a situation where a urologist has the office Mondays, Tuesdays, and Saturdays, and an ENT takes it the other days. The 2 doctors share physical space only. Staff can be shared, or can be individual. With VOIP and internet telephony, even phones can be completely separate. The urologist can have his EMR/PM software housed on an external server and access it from anywhere; same with the ENT. If the urologist needs to see a patient on one of the off days, he can do so either virtually, in the ER, or by house-call. Financial arrangements can be made in these unique circumstances with enough foresight and planning. Using this technology, the urologist can still be operational and productive when out of the office.

I think this is an exciting time to be young, in start-up, and ignorant of "how thing are done." This way, you may just develop a system that works well in the 21st century.

Again, congrats to the success of the Axiom Firm.

The IU.

25A: The Route of Broken Dreams

I drive home along Long Island's route 25A, a historic road that meanders along the fabled North Shore of Long Island. On my 7.6 mile drive home I pass nice homes, busy restaurants and bars, and thriving businesses. I also pass failing businesses. Route 25A has served as a good reminder of how lucky I am just to be in business 2 years after opening my doors. Here's the list of failures of my kindred spirit businesses: those that started around the time I did but have since closed.

• A bagel place closed after 3 months.

• A seafood restaurant has closed, after having been open for only 8 weeks.

• A Mexican restaurant across from my sushi place closed after several weeks.

• A "Hooka Lounge" bar just opened, though I've never seen a single car in the lot and I think it'll no doubt close soon enough.

• A coffee shop in Kings Park went under after 6 months.
  

• A cellphone storefront lasted 1 month before going under.
• A printer cartridge retail store in Smithtown lasted 1 year.
• A law office closed and an alarm store took its place. The alarm store closed 2 months later and has been replaced by a real estate agent, all in under 1 year.

That makes 9 failed start-ups in less than 8 miles. . .in an affluent area. Yes the economy is not well and in these times having a job or a business that is simply surviving might have to suffice.

Depressing, yet true.

Good luck out there.

The IU.

EMail and Money

There are 3 undeniable facts regarding email:

• Insurers and Medicare do not pay for email communication.

• Patients want email communication.

• If possible, doing what customers want is good for business.

EMail is a great way to communicate. Unfortunately, very few doctors have embraced it. I think that email can be used in a medical practice safely and in compliance with HIPAA, and doing so can help the bottom-line as well.

EMail is unobtrusive and permanent. These 2 features make it ideal for the medical doctor. Patients can ask their questions when it is convenient for them to ask and the doctor can reply when they have time to answer. Since email is so considerate of one's time, a doctor that uses it can answer patients without feeling rushed. They can compose their thoughts and answer questions clearly and completely; all from the comfort of their own beds or during a dull 3 year old birthday party. In addition, the records can be saved in the patient chart for all to see, thus
there can never be a "he said-she said" type argument in case of any future adverse events.

Email communication makes sense monetarily as well. First, young and busy patients want it and need it. For them, email is a way of life and for many of these people, time is more valuable than money. These are the kinds of people you want in your practice. These patients also have mouths and talk and will help build your practice with patients like themselves.

Secondly, having people come to your office to discuss something that can be handled quickly by email is, in my view, penny-wise and pound foolish. If the patient's question can be handled satisfactorily by email, doing so will free up a slot for a better paying new patient or procedure. Why spend 15 minutes explaining something for $30, when you can spend 15 minutes doing something for $200? The patient will appreciate that you value their time as well. In my experience, patients are glad to come in and spend their time and money if we tried first to deliver their care by email. Third, new patients often make first contact with me by email and ultimately they often become paying customers of mine. So from an indirect perspective, email can make financial sense.

From a more direct perspective, an entrepreneurial type physician or manager can come-up with a solution so that patients will pay for the privilege of communicating by email. While I don't do any of the following, some practices may charge per email while others will charge a monthly fee, yet others might offer the service as a "premium" type offering. The details of these types of arrangements will vary depending upon payer mix and contractual obligations, but often enterprising, smart people can find a way to make it happen in a way that is both acceptable to patient and insurance company alike.

While email is not perfect, nothing is better either. With email, contrary to commonplace fears, a physician's time will be made more valuable, rather than less.

Let me know how it goes.

The IU.

Finally spring!

Poor Babies!

I feel bad for them. Why not just raise the cost of the gas?

Exxon: You Have Been Targeted For Termination

I sent this letter to 1000 of my patients. Please pass it along to everyone you know.

Dear friends,

Gas prices are at an all time high and only going higher. The high gas prices affect everything that we do and buy and are making economic survival difficult for millions of Americans. The current administration and the oil companies are to blame, period. We can beat them. Here’s how.

I call for the week of June 1^st to be “Pick on Exxon Week”. Our goal is simple: cripple Exxon and send a message to other oil companies. Why Exxon? Why not Exxon. Shell Oil, you’re next.

Please pass this email to others in your contact list and let’s make a difference together.

Richard A Schoor MD FACS

Smithtown NY

http://www.drschoor.com/

Car trouble, eh?

Car trouble is popular excuse for tardiness. I've noticed, for many
employees that I've had the experience of working with over the years, car trouble happens with surprising frequency. I drive a car with 106,000 miles on it, twice that of any of my employee's cars, yet it gets me there just fine. My medical assistant was an ~hour late this morning. She told my office manager that she had car trouble. What am I to say, she does drive an old car, and who knows?

The funny thing about car trouble is that it seems to only happen on the way to work. Never once, in the 8 years since I have been in practice, or in the 18 years that I have been in the work force, has any employee ever had car trouble after work. Never once has an employee of mine been stuck in the parking lot after work. Nope; after work their cars seem to start right up, no matter the temperature, barometric pressure, humidity or aridness. When the whistle bell rings, the ignition works just fine. When the alarm clock goes off, well, that is another story.

Is there is something peculiar about cars in that they only break down unidirectionally; that is on the way to work?

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So you we think we have it bad.

The following was sent to me from a colleague. I find it disturbing and puts suffering into perspective. I've included the entire email:

Thought I would share with you all.

This is an Email from my cousin to his mom back in NYC.

He is a peds resident at Columbia U. He was on a medical mission trip in Uganda.

Pardon
some of the profanities, but I believe it adds to the overall feel of
the Email and what he is trying to express. I am sure he would die if
he knew I was forwarding this on, but it shocked me back awake today
and I thought I should pass it along.

Amberly

Subject: thoughts on lilian

hi pretty girl. its 5pm
here - sitting at the computer lab in the mulago hospital library.
feedback was good on the first update, so i added some more people to
the shout out list.

feeling pretty broken down...

yesterday
on rounds, we met lilian, a 10 year old girl whose dad brought her in
the day before w/ severe belly pain, fever and an inability to pass
urine. at that time, a short discussion was had about renal failure,
blood pressure control and how she needed dialysis but wouldn't get it.
her father helped her to the floor and placed her over a plastic tub. i
heard a whimper and a small splash - dad turns to us and reveals what
looks like milk inside. i realize that she is peeing frank pus and ask
whats being done to control her infection. after a bit about the
utility of urine studies, i was reassured that she was receiving the
proper antibiotic therapy.

as
per routine, the attending dictates her 'findings' and 'impression' to
the resident, and we move on. the 'plan' is also transcribed but
remains nebulous "continue antihypertensives, monitor urine output". i
remain stunned and fall behind in rounds.

this
morning she looked awful. her face was swollen such that her eyes were
2 black creases. she was foaming at the mouth; unresponsive. apparently
her potassium was in the 6's and the serum urea was through the roof.
Dad was instructed to go to the pharmacy and buy lactulose (to induce
diarrhea so she stools out some of the potassium she is unable to
excrete by urinating). Dad says in a soft voice that he is afraid he
will get lost. He is reassured that he will not, and rounds continue on.

i'm
figiting with my camera when i notice the nurse pushing a clear liquid
through a syringe into the IV in lilian's hand. i ask what it is and
she replies 'adrenaline'. i grab lilian's wrist and feel for a
pulse...none. i grab the medical student who had been examining lilian
- "what the hell is going on?" He looks at me wide-eyed and stutters:
"we were listening to her chest and she just stopped breathing. I asked
for help and they brought this adrenaline."

The
group, which had moved on to the next patient, was slowly and without
any hesitancy making its way back to lilian's bed. i raise and place my
hands on lilian's chest (as in "news flash people i think we need to DO
SOMETHING" here) but before i even apply pressure, i realize that i'm
the only one moving. the attending reassures me, "there's no point in
resuscitating her. even if we did, we have no ventilator". she then
chastised the resident for ordering the adrenaline and moved on with
rounds.

i
believe doctors care for patients to the best of their ability given
the availablity of resources. but i'm like "F you lady, you could have
at least tried!"

i
know i don't know jack about their world. i'm a american white guy,
raised in the suburbs who has no concept of the reality of life for
doctors and patients in uganda. and who am i supposed to hate for the fact that they have no ventillator?

lilian's
father never left for the pharmacy and saw the whole thing go down. i
tried putting my hand over his shoulder and muttering "i'm so sorry",
but i never saw one break in his face. the man just lost his daughter
and he was completely flat. not shocked, just flat. he told me in a
quiet voice that he was going out to make a call. two sisters
(nurse-nun types) dressed all in white came and wrapped lilian up in
her bed sheet. i remember them tying a piece of gauze around her head
and chin to keep her mouth closed. they folded the mattress and carried
her out of the ward, the other parents following with their gazes.

life
is so different for different people. you can never, ever judge or even
claim to really understand. the only truth i consistently come back to
is this: life is fucked up sometimes. it is not our fault - situations
may be made worse by generations of damage and corruption, but to
expend energy on assigning blame is wasteful and non-constructive. and
it is most certainly not God's will, for the sun shines on both the
righteous and the wicked.

but
i have faith in the perseverance of the human spirit. we should strive
for a world where basic needs are met and where people can share their
thoughts and feelings freely. i'm probably just on some africa shit right now, but i believe that we can achieve this goal in our lifetime.

its
weird but even though the context has changed, it hurts the same way -
i feel awful for lilian's father. no parent should ever have to bury
their child. not in new york city, not in uganda.

if
you've made it this far, thanks for sticking with. i miss you tons and
will be in touch. as emily would put it, expect more politicking. hit
me back w/ thoughts (like dude you talk to much..!)

-clem

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A Guiding Vision

I'd never heard it described quite like that, but guiding vision perfectly describes the concept that I have been trying to convey in several The Independent Urologist posts of recent and past.

A guiding vision.

I like the sound of it. I like its imagery.

A guiding vision, as described to me today by a remarkable coach, Philippa Kennealy MD, represents your long range vision or ultimate goal. This vision guides you and helps you make decisions in the face of uncertainty. It can help you decide where to spend valuable resources or when to join a group or when to leave one.

I have understood the concept for the past 2 years--and it has served me well.
But the words, Guiding Vision; tremendous.

Thanks, Philippa.

The IU.

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The 5 A's of error free medical practice

Errors cost money. Errors result in bad outcomes, unhappy people, and stress. Many errors, if not all, are preventable. Here are 5 things that you can start doing today to become an error free medical practice.

• Automate: Any process that can be parred down and automated ought to be.
  
• Assure: Quality assurance plans will help you nip problems in the bud and to avoid them altogether.
  
• Audit: Inspect your work randomly before someone else does it for you.
• Ask: Ask your patients open ended questions and let them answer in their own words.
• Aspire: Aspire to become better at what you do, and how you do it.

You'll find that you perform better, more effortlessly and efficiently, and with less cost.

Good Luck,

The IU

The 10 immutable laws of start-up medical practice

1. Formulate a vision statement
2. Compose a mission statement
3. Write a business plan
4. Secure financing
5. Start small, but not too small
   
6. Determine your core strengths & weaknesses
   
7. Know the marketplace
8. Develop a competitive strategy
9. Market, market, market
   
10. Answer your phone

Only 10 laws critical to your success. Sure, easier said than done, but not too hard either.
Good luck,
The IU

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Going solo? Develop a QA plan.

Quality assurance--QA--represents everything that you do, or do not do, that makes your practice run better: less mistakes, less re-do's, less call-backs, less adverse outcomes, less mistakes, and ultimately less cost.

Quality assurance is process, rather than a one time event. I actually have a written plan that I purchased, then I customized it for my own usage. Here's how the QA plan works:

1. Divide the year into 12 months
2. Each month = a QA activity
3. Document the activities and corrective actions in a book or e-book
4. Follow-up on corrective actions

Here is an example of a QA plan that you may wish to implement:

• January: Chart audit for appropriateness of coding levels
  
• February: Chart audit for labs and studies filed, signed off, and acted upon
• March: Assure that employee documentation is in order
• April: Make sure that all insurances are in-force and up to date
• May: Financial audit
• June: Repeat chart audit for appropriateness of coding levels
• July: Repeat chart audit for labs and studies filed, signed off, and acted upon
• August: Review marketing plan and ROI; adjust accordingly
• September: Check in-office lab reagents for expiration dates
• October: Perform and document equipment maintenance and calibration
• November: Financial audit
• December: Chart audit for labs and studies filed, signed off, and acted upon

When you have this QA plan and document the activity, you'll find that "things" just seem to go better and more smoothly. You'll be doing work once, correctly, rather than re-doing over and over again. You'll also find that your operating costs will decrease and your profits will increase. Finally, you'll just be a better doctor.

Let me know how it goes,

Dr S

A reader question: How long to positive cash flow in start-up?

One of my readers (not my mom) asked me a question that deserves an answer. Hopefully, she will read this post.
The question was:

When does the
cash-flow usually come in after starting a practice?


Answer: Depends

Medical practice is a business and start-up is start-up. Most start-ups will fail in the first year for one simple reason; they run out of money before cash flow can cover expenses. When these businesses will run out of money depends on a variety of factors. The most important factors are access to capital, type of business, competition, and payer mix. Business that start-out with less than $5000 cash will usually fail in the first year, while those that have access to $100,000 or greater, will most likely live beyond their one year anniversary. If you want to survive, I recommend raising money, and lot's-o-it.

The type of practice you have makes a difference as well. Some practice's have inherently high start-up costs while others can be started with significantly less money. For example, I started my urology practice with $40,000 down and access to $150,000 in case the unowhat hit the fan. An internist may be able to start-up for even less, while an OB-Gyn in NY will need in excess of $200,000 to start-up. But the start-up costs only tell part of the story. A urologist may have high costs compared to an internist, but we also have higher revenue potential. A plastic surgeon or dermatologist in start-up can have very low up-front costs yet have a high earning potential and could thus become cash positive in a very short time. Contrast that to a primary care physician: they'll have relatively low initial costs but very little real income generation potential in today's climate. Plus, as they get busier, their costs escalate much faster than their revenue.

The third factor is competition. If you are the only urologist in town, you'll do well. If you are like me, one of 100s, you'll have to struggle a bit more to make money. A plastic surgeon in start-up on Long Island may have lower costs than, say, I did, but he/she has much fiercer competition than I faced. As for primary care; out here they are dime-a-dozen.

The fourth factor is payer mix. If your patients are insured, and you have enough of them, you'll start to make money. If you practice in a very well-off area and can go "out of network" you'll make the same money with less work and in less time. If you deal with predominantly Medicaid, you'll probably have to move because you'll never get there.

As for me, my cash flow turned positive after 9 months of hemorrhage.

I started in April 06 with a $40,000 initial investment and was prepared to pour another $150,000 of my own money into the practice to "float it" in a worse case scenario. Initially I estimated a loss of $30-50K in year one and a break even point by end of year 2. I felt that by end of year three I'd start to make in excess of $100K per year. In actuality, I broke even by end of year one and made a modest, yet respectable, profit by end of year 2. This year I have been doing quite well. While I had to dip into my savings, I repaid those loans quickly.

Caveat:

While I have already recovered my initial investment and have been making some money, I am still greater than $200,000 in the hole if you factor in loss of income during my first 2+ years of start-up compared to what I'd have earned had I stayed an employee. So be forewarned: the freedom to be your own boss comes at great cost.

So good luck Rose and please feel free to contact me.

The IU.

Where NY State chooses to spend its money

I just finished having a nice conversation with a friend. His son is a criminal attorney fresh in private practice. His clients typically pay cash. What I found interesting was the following:

While this attorney is not a public defender, NY State will send him clients that need defense and pay him $200 per hour.

$200 per hour!

Now let's see how that compares to NY State's Medicaid reimbursement for physicians. I just treated a man with suspected Fournier's Gangrene, a life-threatening infection that requires many hours of intervention by multiple highly skilled and trained medical personnel. I spent 4 hours yesterday—in-total—working on this patient. I will be lucky if I get $100 in reimbursement from Medicaid.

So that is where NY State's priorities are.

The IU

Now they've gone too far!

Insurance companies control much of what we do in medical practice; where we send patients for labs; pre-certs for radiology tests; referrals for visits. Crazy. But this takes the cake.

One major carrier just sent me a letter that dictates how my semen analysis patients can procure their specimens.

• PPO patients can use DVDs
• POS patients can only get magazines
• HMO patients get National Geographic
• Out-of-network patients can use an escort

This has just gone too far. We must make a stand!!
Have a nice April 1st.
The IU.

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The Value of a Slow Day

While busy is great, an occasional slow is ok too; as long as it is only every so often. Here's what to do on a slow day so that you can stay productive and proactive.

1: Do your bills—always important

2: Refine your processes—take the slow day to think about your inefficiencies, mistakes, and successes over the past few weeks and then refine your processes for the better. For example, you may find that patient flow improves simply by eliminating one form or another or use the time to record some new macros or templates

3: Pick-up a book—not Tom Clancy (who I love), but a business school book and use it to learn about marketing, business development, business strategy etc

4: Do some CME—perfect way to turn 2-3 slow hours into CME credits

5: Check your back-ups—use the time to make sure your back-ups are running as planned

6: Perform QA—run a random chart audit, check to may sure your insurance policies are in-force, make sure your reagents aren't expired, etc

7: Review your P&L statement—use the time to find areas in which to cut costs

8: Call your post-ops—where good doctoring and good business intersect

9: Market—an on-going process

10: Blog—of course

Thanks,

The IU

Now I've seen it all!

A hair salon for dolls. This is at the American Girl Doll Store in NYC. Upstairs, on the 3rd floor is "the hospital" where broken dolls can be fixed. And no, they don't take inurance.

How to compete with the big boys

Just because you are new to the community does not mean you can't survive, even thrive. As a new entrant into the market place, you may have several advantages over the established practices.

1: Flexibility—you can be flexible, adaptive, and change-ready. These are important characteristics to possess in the face of shifting reimbursements schemes, regulations, and managed care rules on top of major advances in communications and health information technologies.

2: Cream-skimming—also known as cherry picking, this allows you to actively pursue more profitable diagnoses and treatments since you are not bogged down with a sicker, more labor-intensive, and—unfairly—less profitable patient base.

3: Tech-saavy—you'll have access to low cost, yet powerful technology that is designed for smaller operations. This technology will enable you to be efficient, more cheaply.

4: Alternative delivery methods—you'll be able to find new, creative ways to see patients and deliver care and also develop alternatives ways to get new patients. Just ask Jay Parkinson MD. IM, Video Chat, text messaging, e-mail, web-site; all this will allow you to capture a sizable segment of the patient base that other established groups are not reaching.

5: Patient preference—as a solo person or a small group, you'll find that patients will be choosing you preferentially over the faceless, big name group. Who'd you chose?: Suffolk Urology, North Suffolk Urology, Central Suffolk Urology, Western Suffolk Urology, or Richard A Schoor MD PC-Urologist.

6: Regulatory changes—No question that in this regard, the advantage tends to go to the new entrant. Inertia that is always present in established practices will make operational change slow in the face of mandates such as P4P-PQRI, HIPAA, etc. In addition, large groups will respond more slowly to changes in payer mix and ironically, can be less adept and handling cash paying patients.

On the balance, as a new entrant, immature, and upstart practice, you're not as disadvantaged as you may feel you are.

Thanks,

The IU.

Customer Service, Customer Service, Customer Service

I don't care what type of business you have, if you deal with people then customer service is important. This is what I like to see in a variety of businesses:

--Pizza place: have reading material for me, since I often eat lunch alone.

--Doctor's office: see me reasonably on time, be reachable & competent

--Contractors (all types): be honest, come in on budget, complete the job satisfactorily, and clean up after yourself

--Accountants: give me honest advice, be reachable

--Lawyer: see accountant

See, I don't expect much.

So much for NY Tort Reform

Our advocate has done what? See link.

Barriers to entry? Few.

Though the costs associated with starting and operating a medical practice have escalated rapidly over the years, in many ways the times and present environment have actually made it easier to start-up on your own. Why is this? The answer is that there are now fewer barriers to entrance into the market place.

Any industry has businesses that have been first to market, even Google within the search engine industry. Remember Netscape? In any marketplace, the established businesses will resist the newer ones from entering and competing. Medicine is no different. Since there is no longer a frontier, the possibility of being first in a community is essentially zero. Fortunately, in today's market, this is no longer as important as it once was. While far from being easy, a solo urologist or ENT or PMD can open a new office in an established, mature community and still survive and even thrive.

Patients come to doctors today by 4 ways: referrals from other providers, word of mouth referrals, insurance rosters, and external marketing efforts, such as advertising, yellowbook, etc. In the past, professional referrals were critical to a specialist's survival. Referring doctors had all the power and could make or break a new doctor. This is no longer the case. Insurance companies, whether intentionally or not, have made this happen.

Here is how it works today. Many patients may feel, for example, that if they need to see an ENT specialist, and they can turn to their insurance company list first. Even those who do turn to their primary initially will then turn to the insurance list. It is the rare patient that will go with a professional recommendation without first verifying that the specialist is "in-network." In addition, patients feel that the insurance company has done the ground work in verifying the doctor's credentials and that if he is "on the list" he must be OK. And for the most part this is true.

What this means is that essentially, a new entrant into the marketplace can have the same standing in the eyes of patients as an established doctor or group simply by being on the same insurance panel. The implications of this for the medical market place are nothing short of incredible—in both the good and bad sense of the word.

To a new doctor in a community, it means they can make a living--not a great one but a good one—simply by contracting with insurance plans.

To an established doctor or group, it means that there is little they can do to prevent competition and an erosion of their own advantages.

To an insurance company, this means that few doctors can ever become so powerful that they can increase their fees unilaterally.

Perhaps this is another paradigm shift in the business of medicine.

Again, just my observation.

The IU.

QA,QC,TQM,6-sigma,IU

They say that a chain is only as strong as the weakest link. Medical practice is no different. The best surgical care can be undermined by an overlooked laboratory value and perfect outcome ruined by a mis-filed lab. I’ve learned over the years quality assurance and total quality management are every bit as important as is history taking and the physical exam. Here are some of the things I do routinely in the realm of QA:

--Outbound test and study tracking
--Re-call lists
--No-show lists
--Equipment maintenance and mainetenance logs
--Random chart audits
--e-prescribing
--fax-tracking
--electronic medical records
--A written QA plan

My patients do well. I sleep well at night. Everybody wins.

The novice. . .the expert. . .the master.

The most incredible advances in medicine have not come out of cancer research or robotics or nanotechnology. No, instead, the greatest advances in modern medicine have been the creativeness in the stories told by drug seekers. There are 3 categories of drug seekers:

The novice: allergic to IV contrast, can't take toradol. Very easy to defeat these days due to non-contrast CT scans. Just send them to the ER or for a CT.

The expert: was in pain "while in Vegas", went to hospital, has no insurance, can't afford CT scan. More difficult here, but the trick is to pin the patient down on the exact name of the medical center, the dates of service, and demand a faxed report from the ER or treating physician. If they are unable or unwilling to provide you with that information, they are most likely drug seekers.

The master: Actually has a stone—even better if they have blood in the urine as well—but the stone is not obstructing and not causing their pain. These cases of tough ones and many-a-physician has been tricked into treating, even to the point of surgery, these patients. The key test here is to get either an IVP or a lasix renal scan to prove that there is no obstruction and then refer them to "the experts" at the university. Typically, these folks will get you for a couple narcotic scripts before you figure them out. They are THE MASTERS!!