Posted: April 22, 2014
Improving our nation’s health care system
Profitability comes when we do the right thingErin Gibbs
Once in a while, we hear a deprecatory remark about running a “medical business” – as if the very idea were inappropriate somehow. It’s time to let go of the prejudice of profitability in health care and instead, embrace a new paradigm of entrepreneurialism and profitability in providing a superior service that people choose – it’s a concept as simple as supply and demand.
To improve our nation’s health care system, we must move to a patient-centered model, and allow for genuine entrepreneurship in medicine. That is the tradition of excellence in this country’s history: Allow the marketplace to determine and develop the best services and products.
No joke – it’s tough to talk to patients about money. It’s even more difficult to collect it. But at our medical practice, we never refuse someone’s care. We often negotiate payment terms if complete payment is not possible, and we have even had some staff personally cover the cost of a patient’s care in extenuating circumstances.
With insurance companies, the patient is sometimes responsible for a portion of care and copays at the time of appointments. We believe that financial care is a component of comprehensive health care, and a financial plan is as important as a health plan for healing. We have overcome the “fear” of the financial conversation, and with great transparency, provide a written estimate of the total cost of the procedures – highlighting both the individual’s responsibility and coverage by insurance.
This conversation is never between the physician and patient. We are absolute in protecting the patient/provider relationship so that our caregivers can design the best treatment plan for the individual without worrying about payment. That part is left to our business officer, who navigates insurance and finances together with the patient.
By embracing entrepreneurial medicine, we developed our own brand of care. We are called to serve our patients – while at the same time, we are responsible to run a stable and profitable business. We sell a service and ours happens to be fixing vein disease.
People with vein disease (venous reflux disease) are an underserved population. According to the American College of Phlebology, more than one-third of Americans live with this easily treated condition. While not life-threatening, it is life-altering and gets progressively worse with time. For example, there are only 15 board certified vein specialists (phlebologists) for the 5.188 million people in the state of Colorado – four of them work at American Vein & Vascular Institute (AVVI) and two more of our doctors will earn board certification this year.
We rally to better the industry, challenge competitors and leave a legacy of great care with a business twist. We have salaries to pay, overhead to meet, supplies to purchase and a service to provide. But health care is an art and a science riddled with ethical questions concerning the human condition, in addition to the complexities of business ethics and smart financial decision-making. The path we selected is a challenge of both heart and mind, as well as a balance sheet.
Modern medicine is not selling widgets. It is interwoven with quick-paced decisions (competition for patients is fierce), and unlike other capacity-driven businesses (think hotels, restaurants, airplanes – anywhere with seats to fill) – we are highly regulated by a trifecta of competing interests with government, insurance companies and pharmaceuticals/manufacturers.
Hotels, restaurants and even hair salons routinely take a credit card to hold an appointment, and you are charged if you don’t show up. Although we have not adopted this policy, some physician offices have, because the cost of no-shows or late-shows adds up to big dollars and lost productivity.
A 2013 Medical Group Management Association (MGMA) survey revealed the biggest daily professional challenges to medical practices include the struggles to adapt to rapid changes, legislative pressures and fiscal uncertainty. The top five intense challenges of running a practice include:
1. Dealing with rising operating costs.
2. Preparing for reimbursement models that place a greater share of financial risk on the practice.
3. Managing finances with the uncertainty of Medicare reimbursement rates.
4. Collecting from self-pay, high deductible, and/or health savings account patients.
5. Understanding the total cost of an episode of care.
These challenges are fraught with the tug-of-war between providing a humanistic service (medical care) and earning a profit. For a medical office to earn recognition from business awards, financial disclosure of profits is required. That type of information can be met with disdain, but the prejudice against “profitable medical businesses” must end if we are to attract and develop top talent, build exceptional facilities and use the latest technology.
The debate of whether health care should be a for-profit industry is layered with complex ethical questions – enough for many columns. If someone cannot afford the high cost of necessary-for-life treatment, do they deserve access to it anyway? Who should shoulder that expense – is that service rate set and mandated? If so, by whom? There are college courses, centers for bioethics, centers for business ethics and endless pages of Google searches on this topic.
In my world, profitability comes when we do the right thing. We stick to what we learned long ago as young trainees at Mayo Clinic: “The needs of the patient come first and foremost.”
Erin Reilly Gibbs has played central roles in the development of innovative services and educational content in the healthcare industry. Before founding RMVI Services in 2010, she helped MayoClinic.com launch its first edition website and produced the first online video health library as well as online text and interactive health content. She co-founded American Vein & Vascular Institute (AVVI – previously Rocky Mountain Vein Institute) in 2009 and Trinity Vein Institute in 2012, now all housed under the AVVI moniker. AVVI now has more than 50 employees, operating in Pueblo, Parker, Canon City, Vail Valley and Colorado Springs in Colorado and in Arlington, Texas. Recently, AVVI was selected for ColoradoBiz Magazine’s Top 100 Women-Owned Companies and a 2014 winner for Colorado Companies to Watch. She can be reached at email@example.com or 719.242.8650.