Thursday, February 29, 2024

Assessing competition in your medical practice market

For physician practices, a competitive analysis is a means to assess who your competitors are, what value they provide, understanding their (and your) strengths and weaknesses, and where your practice fits in. A good competitive analysis is a scouting report of the actual market terrain that your practice must navigate in order to be successful. While analyzing the competition is an essential component of your strategy, most medical practices don't conduct this type of analysis systematically enough. However, a thorough competitive analysis is indispensable.

  1. Begin by compiling a list of your practice's competitors. Most of the time, such a list is comprised of who your practice considers to be its chief competitors. However, there may be other healthcare organizations that indirectly compete with yours, perhaps ones outside of your catchment area that offer services such as telemedicine or niche treatment modalities that are aiming for the same patients. You will also want to include information on healthcare entities that may be entering your market in the coming year. Once you have compiled the list, you can highlight those practices that will be the greatest challenge.
  2. Analyze the competition's services in terms of features, value, and target patients. How do they market them? How do patients see your competition? How do referring physicians view your competition? Take an honest look at their offerings. Is your quality commensurate? Do you have similar offerings? What is the unique value you provide that competitors don't or can't? Emphasize these benefits in your marketing.
  3. Compile a list of competitor strengths and weaknesses and remember to be objective. You'll do your practice no good if you allow bias toward your own physicians, staff, and services to cloud your judgment. Try to see the competition's practice as though you were them. What makes their practice so great? If they are growing rapidly, what is it about their practice that's promoting that growth?
  4. Observe how your competitors market themselves through advertising, collateral material, and perhaps the use of physician liaisons. You will have to go to many different sources to get a complete picture. It takes practice and a little shrewdness on your part to piece together a complete picture of strategies and objectives, so the use of a qualified consultant may be to your benefit. Focus on the facts, be persistent, and trust your intuition to help you.
  5. What are the market demographics for your practice like now? Is it growing? If so, then there are likely quite a few patients left to go around. If on the other hand the market is flat, then the competition for patients is likely to be fierce. Your practice will find itself scrambling to win market share. The outlook portion of your analysis may seem like forecasting, but it's really a measure of trends. By the time you've done most of your research, you'll have enough information to determine what the outlook really is.

By evaluating yourself against your competition, you'll likely find new ideas for your practice. While compiling a competitive analysis is an interesting piece of work, it can indeed be challenging. Consequently, you may want to seek the help of a healthcare consultant to guide you through this process. You'll learn a lot about your market and in the process become a more valuable resource for your patients and referring physicians.


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Wednesday, February 28, 2024

Reining in administrative burden

Doctors and medical practices are mired in administrative tasks.

One of every five dollars of U.S. gross domestic product, or $4 trillion, is spent on the health care industry. And a quarter of that is spent on administration, with half of the $1 trillion devoted to complex billing processes.

It’s not only back-office workers who are sucked into the whirlwind of medical administration. Doctors spend up to 20 hours a week on paperwork, often taking as much time to document patient visits as they do actually caring for patients.

The burden of health care administration has put doctors and small medical groups at a disadvantage compared with larger players and insurance companies. The situation is so bad that doctors are leaving the profession, and otherwise healthy small practices are deciding they have no choice but to be swallowed up by larger medical groups or to shut down.

But there are solutions. This is what doctors and other health care professionals need to know:
  1. Detailed prices are finally starting to become publicly available. Although you almost need to be a data scientist to figure them out, providers can now use some benchmarks to negotiate with payers on prices.
  2. The floor price of procedures. It may be hard to believe, but many don’t know those prices. It’s hard to run a practice without this information.
  3. The reasons for payment denials. That’s so fixes can be made at the front end of the payment process to avoid denials and thereby reduce administrative work.
  4. Process automation, including the use of artificial intelligence, increases efficiencies and performs tasks at a small fraction of time and costs now devoted to them.
  5. Transitioning to value-based care can save time and lead to better care.

For health care providers, the headache tends to involve three interlocking problems. The first is what I like to call a “wild west” approach to pricing baked into America’s fee-for-service payment model. That’s where the cost of a procedure can vary widely.

When a regulation recently took effect mandating that hospitals disclose their standard charges, the variations were stunning, and the presence of big government payers like Medicare only makes the situation more unstable. There are, for example, hundreds of procedures where commercial payers’ prices are tens or even hundreds of times more than what Medicare reimburses.

Pricing remains so opaque and complex that most providers are forced to offer the bulk of their services without knowing in advance what they will be paid, contrary to traditional business models. And this leaves aside the penalty that smaller providers face because of their limited ability to bargain with large payers.

The second problem for providers is just making sure they get paid. Four years ago, about 9% of reimbursement requests by providers were denied by payers. Today that number is closer to 12%, resulting in a hit of more than $100,000 to a practice with $1 million in billings.

But that tells only part of the story, because the 12% of billings ultimately written off by providers is less than half the initial rate of such denials, meaning untold hours spent trying to limit losses.

Third, growth in process automation may be leading to an even greater power imbalance in the administrative relationship between payers and providers. Well-resourced payers have begun to use artificial intelligence to find ways to deny bills submitted by providers.

While process automation can help providers keep up with payers, what they often really need is better data about their own operations. Many find it difficult to understand the cost of the care they are providing.

For example, knowing what it really costs to provide a hip replacement is crucial for numerous reasons. For one thing, it makes productive rate negotiations with payers possible. How can a doctor agree to perform hip replacements if the reimbursement being offered by a payer is below the cost of providing the service?

Conversely, if a practice discovers it is efficient at performing hip replacements, it may choose to focus on performing more of them and negotiating higher prices for them than other similar procedures. Meanwhile, efficiently capturing all the different contractual rates in place with payers into a common dataset can make tools such as accounts receivable reports more meaningful.

Over time, the American health care system may move from fee-for-service toward value-based care, in which providers are paid fixed rates to care for patients. Doctors would have the freedom to use that money for care as they see fit.

But while such an evolution might help with our trillion-dollar admin bills, it could also force providers to shoulder even more risk, further pushing smaller practices to seek refuge in larger, more bureaucratic groups. That’s because doctors would have to pay for cost overruns.

The best-case scenario would be if providers addressed the admin problem now rather than taking on a much bigger task that would further add stress. This can be done with automation, which also helps better position providers for transitioning to value-based care.


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Tuesday, February 27, 2024

Taylor Swift, healthcare, and the 2024 election

Taylor Swift is considered unarguably the most famous woman in the world. She is a billionaire; her concerts are sold out to thousands of Swifties often paying more than $1000\ticket; she has increased the female viewership of American football; and presidents and prime ministers are requesting that she perform a concert in their countries because of the potential economic impact of her concerts. So, how does Taylor Swift phenomenon apply to healthcare?

The power of over-delivering


It has been said that it is best to under-promise and over-deliver in business and medicine. A Taylor Swift performance consistently over-delivers. Taylor Swift doesn't stand on the stage and sing one song after the other in the same vocal range, in the same outfit, with the same lighting and stage sets. She wears multiple outfits, has a perfectly choreographed dance routine, and displays a unique background representing the era. Taylor brings 100% of her energy to every sold-out arena for three hours as though each song was the finale. From the opening momentto the final scene Taylor Swift over-delivers.

Now, consider your medical practice. Look at the patients, the staff, colleagues, and the community for whom you are performing. How are you over-delivering? What are the expectations of your patients, staff, and referring physicians? What would it look like at the zenith of what you do? What would it look like to outperform and overdeliver, to the point that any patient would tell ten people about their interaction with you and your practice?

Over-delivering will force you to be creative and think differently than your competition. It will increase patient retention and foster viral word-of-mouth marketing, as in the case of Taylor Swift's concert. Give people more than they expect, and you can build nearly anything.

Examples of over-delivering include answering the phone in three rings; the caller speaks to a human and does not have to navigate a phone tree; all calls and e-mails are returned within twenty-four hours. The patient has all their questions answered at the end of the doctor-patient encounter. A final example of over-delivering might occur when the patient receives a follow-up call from the doctor or the nurse to check on patients recently discharged from the hospital on their condition, their medications, and that they have scheduled follow-up appointments.


The power of persistence


Taylor had a heated dispute with artist Kanye West during the Grammy Awards. Taylor was vilified by him and the press.

Instead of wallowing in her disappointments, she focused on what she could control. Between 2019 and 2022, she produced four albums and won a Grammy for Album of the Year. She then celebrated by launching the most successful tour in music history, grossing $1.4 billion in one year.

Her persistence is a reminder that greatness does not come from one smash hit, but from taking one small next step toward her goal.

Persistence in medicine and healthcare requires steadfast dedication and continuous effort to achieve positive outcomes for patients, overcome challenges, and advance medical knowledge. Remember that becoming a doctor requires twelve to fifteen years of education, and persistence is a necessary ingredient in the development of a healthcare professional. Doctors, nurses, and other medical staff require persistence in their daily work.

Integrating technology into healthcare, such as electronic health records (EHRs), telemedicine, and, recently, artificial intelligence (AI) requires persistence in overcoming technical challenges, ensuring data security, and adapting workflows to new systems.

These examples highlight the importance of persistence in overcoming obstacles, improving patient outcomes, and advancing medicine and healthcare.


Taylor actively listens to her audiences


Taylor Swift is known for her interactions with fans and for being attentive to their feedback. She interacts with her fans directly, responding to their comments, sharing their fan art, and expressing gratitude for their support.

Taylor hosts fan events and meet-and-greets during her tours. This allows fans to meet her in person, ask questions, and share their experiences. These events showcase her commitment to listening and engaging her fan base.

Taylor draws inspiration from the experiences of her fans when writing songs. Some of her songs are speculated to be inspired by specific fan interactions or stories, showcasing her ability to connect with her audience on a personal level.

Healthcare professionals must also listen to their patients, staff, and colleagues. A practical method of listening is to survey your patients. This can be accomplished by giving patients a survey card when they check in and asking them to complete the six-question survey (A sample survey from my practice is shown in Figure 1) during every doctor-patient encounter. All positive and negative comments should be acknowledged to demonstrate you're listening to your patients.

Now how does Taylor Swift impact an election? Imagine this scenario: There are four battle-ground states (PA, WI, MI, AZ)that will likely determine the results of the election. Imagine Taylor supporting one of the candidates for presidency. She agrees to a free concert in those battle ground states, and the only requirement is that the Swiftie must register to vote to receive a ticket. I can imagine that those votes from 18–36-year-olds will swing the election. Your thoughts?

Bottom Line: Taylor Swift's makes it easy to be awestruck. But while she is an incredibly gifted artist and creator, her marketing principles are admired. She had to start at square one, like every healthcare provider. Just imagine how using some of her strategies could enhance your practice and pick the next president of the United States!


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