Julio Garcia, a plastic surgeon in Las Vegas, has taken his practice to a new level. He is no longer just making his patients beautiful on the outside — he has also established an anti-aging clinic to help them improve memory, reduce stress, and manage the symptoms of menopause.

Garcia is among a growing number of physicians who have expanded their traditional practices to include additional services, from alternative medicine to MRIs to executive physicals. While the primary motive for some physicians is to produce more revenue to compensate for dropping reimbursement rates, others see their expanded service lines as a natural extension of their practices, an opportunity to provide one-stop shopping as well as to give their incomes a shot in the arm.

"Adding services helps physicians increase productivity," says Mike Fleischman, a consultant with Gates, Moore & Co. in Atlanta, a firm that provides practice management, tax, and accounting services to physicians. "There are only so many hours in the day; so if you can do a procedure next door to your office, you can improve efficiency."

"Physicians can't make money practicing medicine like they used to, so they have become more entrepreneurial and bigger risk-takers," says Marshall Baker, of Physician Advisory Services in Boise, Idaho. He notes that physicians are turning to wellness product lines, ambulatory surgical suites, women's centers, and diagnostic tests to boost their bottom lines, and estimates that some practices may earn as much as 15 percent of their income from added services.

Growing incomes

Garcia's anti-aging clinic, started in 1998, definitely fills a niche considering that the average age of his patients is mid-40s, and most of them visit him at least three times a year. He offers nutritional counseling, hormone replacement therapy, blood and saliva testing to check for vitamin and hormone levels, "smart drugs" to prevent memory loss, bone density screenings, body fat measurements, lung capacity evaluations, and a relaxation capsule heated to 104 degrees.

For a fee of $600, Garcia meets with patients for 20 minutes before the diagnostic tests and an hour afterwards, and provides a 25-page assessment with recommendations. Garcia attributes 20 percent of his revenue to the anti-aging clinic, and expects that it will climb to 50 percent in the next two years.

Deborah Harding, MD, splits her time between her own internal medicine practice in Orlando, Fla., and Rippe Health Assessment (RHA), founded in 1998 by cardiologist James Rippe. RHA offers a comprehensive medical, diagnostic, fitness, nutrition, and lifestyle evaluation geared specifically toward executives. Its client base in 2001 numbered 600, a growth rate of 67 percent since RHA's inception.

RHA offers four assessment levels, ranging in price from $1,400 to $3,400, each incorporating increasingly lengthy and specialized evaluations and personalized services. Patients also may request full body scans for $1,000 and lung and heart scans for $600 each. The exams and assessments are not covered by insurance but are often paid for by executives' employers.

"Our primary goal is to prevent disease before it happens, and if a problem already exists, we can pick it up more quickly," Harding says. "It is important to look at the whole person, but when you have to see more and more patients to compensate for lower reimbursement, that becomes difficult. I am fed up with insurance telling me how to practice medicine."

Ancillaries add value

When patients visit their OB/GYNs at Louisiana Women's Healthcare Associates (LWHA), an 18-physician practice in Baton Rouge, they can also take advantage of onsite lab tests, such as bone marrow density screenings, mammograms, hormone analyses, DNA testing, hepatitis and HIV screenings, and lipid profiles. When the lab expanded its test offerings in 2000, there was an 80 percent increase in production over its first year, 1998.

"The full-service lab brings tests closer and results more quickly to patients," says Thomas Schmidt, the practice's CEO.

LWHA also has an ambulatory surgical suite and a separate suite for performing ultrasounds. While Schmidt says the motivation to offer additional services is not revenue-driven, the surgical suite and sonography, mammography, and osteoporosis screenings account for 22 percent of all revenue.

Sandy Eckard, vice president of operations for KDV Orthopedics and Rehabilitation in York, Pa., calls that practice's ancillary services, which include MRIs, physical therapy, and physical medicine and rehabilitation, "a natural extension of orthopedic surgery. We wanted to offer a broader continuum of care — diagnostic and therapeutic procedures — to help our six surgeons decide what treatment to choose," she says.