By: Steph Weber Finding worthwhile financial partners for your medical practice is an ongoing, but necessary, challenge. Here's how to evaluate current relationships.
By: Steph Weber
Besides nurturing relationships with patients, physicians also need to develop a number of strategic business relationships. These financial partners, ranging from banks to vendors to payers, are critical to the success of day-to-day operations as well as long-term endeavors.
Here are some ways to evaluate your current partnerships, and whether or not it's time to move on.
Schedule regular check-ins
First, physicians need to determine where their current partnerships stand. This is best done by scheduling periodic check-ins with each one.
According to James Edwards, managing director for the nationwide offices of SunTrust Private Wealth Management Medical Society Group, the ongoing meetings are critical. "Many practices have had their top line revenue compressed, so managing every dollar of expense is very important," he said. "[Specifically regarding] their banking partner, physicians should meet with them at least once or twice a year for a formal review of the relationship and to discuss future plans."
But this frequency isn't set in stone, as it's largely dependent on the needs of the practice and the type of vendor in question. For example, with the looming ICD-10 transition, weekly or biweekly meetings with software vendors may be necessary to make sure implementation is progressing as it should. With the landscape of healthcare changing so rapidly, physicians will want to ensure their vendors assume a proactive stance too.
Look past cost
There are costs associated with any financial partner, whether those are fee- or commission-based. And while lower fees and expenses may seem tempting, physicians should try to look past this specific criteria.
"The lowest-cost vendor may not be the most cost-effective when you consider all the services for your practice," Edwards said. Instead, vendors should be measured on the quality of their services. "Working with a partner that can manage the many needs of your practice may create pricing efficiencies that the low-cost provider may not be able to deliver," said Edwards.
Regardless, flexibility and quality customer service are fantastic measures of a worthwhile vendor relationship. Jim Holtzman, a certified financial planner and wealth advisor with Pittsburgh-based Legend Financial Advisors, Inc., has found that "smaller banks and credit unions tend to have more flexibility and they get to know both the practice and the risk better."
He believes any vendor, particularly a bank, should invest in relationship-building so that they can offer creative solutions that closely fit the needs of the practice.
Don't overlook malpractice and retirement
Services like malpractice insurance and retirement planning can include often-overlooked financial partners. Edwards recommends that malpractice policies are reviewed regularly to "ensure the coverage and rates are competitive with the market."
Retirement planning is sometimes neglected as well. "Make sure you get a good third-party vendor who can think outside the box," said Holtzman. That may mean crafting a defined benefit pension plan or one of many other hybrid retirement plans.
"Lucrative retirement plans can be a big part of the equation in keeping employees happy," said Holtzman. "And when or if the practice is sold, it's going to look much more attractive with that kind of set-up."
When it's time to switch
If you've tried to salvage the relationship, but you're unsatisfied with the outcome, it may be time to pursue other options. But what should you look for in your next partner?
"Trusted advice and great service are the basis of a good relationship with a financial partner," said Edwards. Margaret Hutchison, an Austin-based audiologist and CEO of Practice Appeal, a medical marketing and consulting company for private practitioners, reminds physicians to consider all angles before terminating a relationship. "There should be due process in place to evaluate the relative strength of any financial arrangement, both in terms of the legal implications of any contractual arrangements, and the possible penalties of the arrangement's dissolution," she said.
Before seeking out a new bank, vendor, or even payer relationship, you need to review the prior partnership. "Part of the problem is that physicians have limited time," said Holtzman. But they must determine what they didn't like about the last partner and what they want. Holtzman suggests physicians gather referrals from colleagues and seek insight from various business groups before making the leap.
The compilation of patient demographic information can be helpful, especially when it comes to negotiating with new, or even existing, payers. "As quality measures come more into play, you have to prove to payers that your practice is up to speed," said Holtzman.
Financial partners can have a tremendous positive impact on a medical practice, both in terms of patient and physician satisfaction as well as efficient operations. So investing the time to find mutually-beneficial partners who understand your practice's unique needs can pay dividends.
Steph Weber is 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.