Solutions for the Trials and Tribulations of Today’s Small Practices

August 14, 2015

By: Steph Weber Expansive regulatory changes and demanding expectations have taken a toll on small medical practices. Here's how to succeed despite the obstacles.

The healthcare industry has weathered its fair share of changes in recent years. While nearly all physicians have struggled to properly adapt, small-practice physicians have encountered significantly more hardship than their larger counterparts. In fact, today's small independent practices continue to face a sizable number of troubling concerns.

Growing governmental mandates
One of the biggest issues they must overcome is how to successfully navigate a growing list of governmental mandates.

Linda Girgis, an advisory board member of SERMO, the largest social network exclusive to physicians, and a family physician co-practicing with her husband in South River, N.J., feels the burden has become too great.

"We now have new requirements to implement EHRs and to certify that we are using them meaningfully," she said. "Plus, we have to comply with a whole alphabet soup of other requirements including PQRS, HIPAA encrypting rules, ICD-10, and MOC."

Limited resources and infrastructure
Due to limited internal staff, as well as resources, it's becoming increasingly difficult for small practices to maintain the necessary infrastructure to meet these mandates. John M. Kirsner, a healthcare advisory attorney and partner at the global law firm Jones Day, agreed.

"Most small groups cannot afford the cost of the latest and greatest EHR systems," he said.

"Meanwhile, their larger competitors have access to capital and resources, allowing them to make these tech buys [more easily]. It's a difficult balancing act, to be sure."

Unfortunately, this means small practices are having to do more with far less money, which leads to another issue. "Most small, independent practice owners have no idea what it costs them to deliver a service. Until now, most physicians could ignore it and manage to make a living," said Pam Thompson, a private-practice management consultant at Los Angeles-based Thompson & Associates. "ICD-10 implementation alone is slated to reduce income by 5 percent permanently, and generate a 30 percent cash-flow loss for three months to six months."

Increased patient panels


And to further complicate matters, stagnant insurance reimbursement rates coupled with rising overhead costs have led physicians to increase patient loads.

"Compared to 20 years ago, primary-care physicians are seeing about twice as many patients today. But after inflation, they are still earning the same income," said Stephen C. Schimpff, an internal medicine physician and author of "Fixing the Primary Care Crisis."

Schimpff points out the non-sustainability of this type of business model; at some point, physicians reach maximum capacity and can't keep adding more patients. He believes that capacity has been exceeded for quite some time already.

Are there any viable solutions?
So what are small practice physicians to do? Luckily, there are several ways to navigate these issues.

"Some physicians are dropping certain insurance plans, like Medicare and/or Medicaid," said Girgis. However, at her practice and likely many others, that's not a feasible option.

Instead, Girgis encourages physicians to identify the regulatory requirements early on and utilize any and all resources at their disposal. State medical societies usually track regulatory information closely and are willing to assist physicians with the process too.

Networking with colleagues can garner additional insights. "All too often we are isolated, but being in communication with other doctors can help us get educated on these new rules and learn what has or hasn't worked for others," said Girgis.

Physicians also need to know what it costs to provide each patient service. As payments "inevitably decrease markedly over the next few years," Thompson advises physicians to alter work flow processes and modify the types of services offered to, "ensure physicians do not lose their own paycheck due to cost overruns."

For others, clinical integration, where independent practices "link up clinically" but not fiscally, may be a viable solution for those with limited resources. Initially, a hospital system may be involved to provide support and funding. "But, in exchange, physicians can obtain access to EHR, compliance tools, shared savings, and P4P contracting," said Kirsner.

And lastly, direct primary care, or DPC, models are becoming another popular, multipurpose solution for small-practice physicians. With insurance companies removed from the equation, overhead costs are drastically diminished. And patient panel sizes typically decrease from 3,000 to a much more manageable 500 patients to 800 patients, while physician income remains the same. Schimpff said the smaller panel allows physicians to spend more time on preventative measures, which in turn, increases patient outcomes and satisfaction. With nearly half of physicians reporting severe stress levels, according to the Physician Stress and Burnout Report, DCP models can be beneficial in decreasing those numbers too. Despite the monumental challenges facing small-practice physicians, Girgis chooses to remain positive.

"At the end of the day, no matter how many new struggles we face, we are there for our patients," she said. "No one else can cure their diseases or make as significant of an impact on their well-being as we can. Sometimes, this reminder is all it takes for me to continue the fight to stay independent."

Steph Weberis a freelance writer hailing from the Midwest. She writes about healthcare, finance, and small business, but finds her passion for the medical field growing in sync with the ever-changing healthcare laws. She can be contacted at editor@physicianspractice.com.