After 26 years, this doctor has had it
Posted by Sean Keating on August 29th, 2007. Filed under: family practice, family practice, reimbursement.
The Albany Times Union has a sad story about the plight of one rural family doctor, Joseph Lalka, and his painful decision to take in his shingle.
When he first became a doctor, Lalka’s goal was to earn $100,000 a year, and he did in 1982. But his income from the 1,200-patient practice began falling in the 1990s and worsened in the past few years. He earned $65,000 in a recent year and brought in $35,000 in a particularly bad year.
A bitter pill for family doctor [Via Albany Times Union]
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© 2007
Dr. Lalka is doing better than I. It’s now a fool’s game.
One works as a slave to Blue Cross etc. They are the bosses and the winners in all regards. It’s legalized economic rape.
Dr. Lalka is not alone. I manage a family practice in Dublin, OH and we are days away from shutting our doors. The doctor filed for personal bankruptcy as we struggle to plow through the complex healthcare reimbursement matrix. Our AR is $174,000, about $115,000 after contractual discounts. The majority of these claims generated since October 2007 are still outstanding. We’re lucky to see 20k of the 40k-50k a month we’re owed, after reduction. It’s not just lack of reimbursement, but improper reimbursement. For example the Meningitis vaccine costs $85 from the manufacturer; $115 from other suppliers, NOT including our cost for administration, as the Dr. and I are currently the only employees working for free. Tricare is our highest payer for the vaccine so far at $46, or 40-54% of our cost. Insurance companies expect us to pay for our patients’ healthcare. We don’t have time to address appeals on all of our improperly adjudicated claims, we’re so buried in the changing rules. This month we’re forced to cease scheduling all government healthcare recipients, and anyone who can’t pay upfront, pending reimbursement. Tricare, United Healthcare, and Aetna help with real-time, online adjudication and direct deposit, but it may be too little too late. Like Shel Silverstein’s The Giving Tree, we have nothing left to give.
This trend will make it much more attractive for physicians to get out of the third party payer system. We’re seeing that the current system of reimbursement is detrimental to the health of medical practices. Could a free market “cash on the barrel” approach to reimbursement work better? It works for lawyers, accountants, plumbers, etc. Doesn’t it?
I sympathize with Dr. Lalka over the financial troubles of rural family medicine. It is frustrating to get poor reimbursement from government and private insurances alike. But contrary to these postings, family medicine can work and even be very profitable.
I started my own private family practice clinic in 1991 at Delta, Utah, a rural area of about 8,000 people, located about 50 miles from any other hospital and 100 miles from anything with specialists. It’s been very profitable over the years, in fact my W-2 for 2007 was over $300,000 for a 4 day work week. Really!!! It can be done and still give excellent care. I even have 15-20% Medicare and 15% Medicaid.
It sounds like these practices need some education in business. You may be great physicians, but from the outside it looks like you are extremely lacking in business sense. A couple of suggestions. You need to see more than 15-20 people a day, maybe 35-40; you need to maximize your E&M coding, take a course or two; you need to be aware of your exact expenses and know your reimbursement. For example, one of the physicians above talked about the poor reimbursement of Menactra, losing money on each vaccine that is given. I’m sorry to be so bold, but if you’re losing $40 on each shot that is given, and still giving the vaccine, maybe you deserve to close your private practice and go be an employee for the local hospital or something, where you just put in your hours and pick up your check. Instead, send the patient to the local health department. The same goes for Rocephin shots, if you’re not getting reimbursed for your cost, then don’t do it. Send them to the hospital.
Family Medicine can be profitable and rewarding, but sometimes we need to get away from being the cry-baby and go to work. Again, is it possible to make $300,000 + in family medicine? Yes, yes, a resounding yes, but you have to work for it, both as a quality physician and also as a quality businessperson.
We, in medicine, sometimes think we should be able to just show up and be given $200,000 just because we have an MD or DO behind our name. Maybe in the past, but not anymore. In the current climate of poor reimbursement and payer controlled fees, you have to work smarter.
Good luck .
Alan R. Smith, MD, FAAFP
asmith@deltafamilymedicine.com