From: Larry Lindeman <llindeman@mac

From: Larry Lindeman <llindeman@mac.com>
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Date: Wed, 13 Sep 2006 13:04:13 -0500
Subject: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

Recently I have had money on my mind. After 2 years in my new
practice I an finally close to making $150,000 which is still less
than I made at my old job. However I am finding it difficult to
figure out how to make anymore than that since I don't think that I
can see any more patients in a day. The median income of FP's is over
$160.000/yr. How many of you are making more than the median FP
income and what are you doing to make that much. If the micropractice
model is not capable of producing enough income to provide at least
the median income it is probably not going to be a viable model.
Larry Lindeman MD

From: "David Brock DO" <drbrock@rrohio.com>
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Date: Wed, 13 Sep 2006 14:23:00 -0400
Subject: RE: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

The problem is that the average of $160,000 includes docs that do the full gamut of FP & usually high volumes. The typical FP still likely does AM inpatient work, sees 30+ office patients, sees nursing home patients, works 60 hrs per week. It is hard to expect an IMP low volume practice to match that because I personally am not working nearly that hard! I do not do inpatient, nursing homes, & only work ~ 36 – 40 hrs per week (averaging 12 – 15 pts/day), so of course I am not going to make $160,000, but that is a lifestyle tradeoff have chosen. At least that is the way I have rationalized not making “average” income in my mind.

David

From: Kevin Egly <kevin_egly@yahoo.com>
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Date: Wed, 13 Sep 2006 13:52:34 -0700 (PDT)
Subject: Re: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

Hi Larry:

Let me assume some numbers for now as follows

2000 patients

300,000 collections

150,000 overhead

150,000 salary

Collections per patient then 300,000/2000 or $150/year per patient or a little over $12/ month per patient.

My practice has fewer patients but last year we collected $200/patient but still less than 20$ per month per patient.

I still feel the way we make primary care affordable is by asking patients/insurers/ and employers to pay $1/day.

The only other way to increase revenue and salary is to provide quick care. A friend who provided urgeant carewould see 30-40 patients per day in quick care working 3-4 days per week. He was seeing 4-6 patients per hour. Most 99313's one problem one prescription $50-70 per visit or 200/hour $1600/day. 2000 hours per year 400,000 overhead 200,000 salary.

In our low overhead clinic with just medicare, if we could see enough patients with higher level visits for 99214 at two an hour we would collect $158/ hour. For 2000 hours $316,000 in overhead. As it is we are at 35-40 patient per week most are 99214 with in house lab we collect about $92 per patient visit. Overhead is $60,000 to increase to $80,000 next year. At 2000 visits per year we will collect about 180,000. pay $100,000. We feel we will be able to increase daily visits but keep hours the same and hope to evetually provide salary and benefits of $150,000 per year.

Note your income is a combination of salary, benefits, CME, professional liscences, health insurance, disability insurance. $20,000 of our overhead covers these expenses. So our real income and benefits is actually $100,000 this year for seeing less than a patient an hour. But is I needed $150,000 in salary alone, I do not see that as possible unser the IMP model or any primary care model for that matter.

Kevin

From: Nancy Guinn <NGuinn555@comcast.net>
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Date: Wed, 13 Sep 2006 20:42:34 -0600
Subject: Re: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

$91.00 per patient visit is about what I average also - about 2000 visits/year.

FPs in this town have never averaged $160,000 year.

Nancy

From: "brenthrabik" <bhrabik@cableone.net>
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Date: Thu, 14 Sep 2006 02:55:54 -0000
Subject: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

I order to make the income you have to be able to provide some
ancillary services, lab, ekg, pfts, audiograms, xray etc to provide
very complete care. Use Ma or lpns. You still have to do some
volume w an employee once you have opportunity to get a little
busier. The employee can help you keep generating revenue by keeping
you off the phone, seeing appointments and doing what you do. They
can also answer phone when you are not there and plug in an appt for
later that day. They can keep you out of the reach of detail
people.

Why do lab? Our local hospital charge 126 for a tsh. I can buy for
a minor percentage of that from a commmercial lab and charge half of
local hospital and still make more than for the whole office visit
some of the times.

All the little things add up and provide for a complete care model.
Immunizations are becoming a much bigger part of my practice, the
problem is margins are so small , many times hard to break even. Will
still do for now.
Brent

From: "David Brock DO" <drbrock@rrohio.com>
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Date: Thu, 14 Sep 2006 09:46:51 -0400
Subject: RE: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

I must be missing something. If you are truly averaging $91 for every pt that walks in the door then: two/hr = $180/hr. If you work 8 hrs/day x 4.5 days/wk x 48 wks/yr that comes out to $311,000/yr before overhead. Even with a traditional 50% overhead you would still be bringing in over $150,000/yr. Now, if you have chosen to work less than these hours I quoted then that is different (personal choice). I could not average $91 per patient without upcoding illegally or not taking any self-pays or Medicaid. Sure, some visits pay more than that but the large majority pay between $50 & $80.

David

From: Kevin Egly <kevin_egly@yahoo.com>
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Date: Thu, 14 Sep 2006 13:10:24 -0700 (PDT)
Subject: RE: [Practiceimprovement1] money/disease management.
Reply-To: Practiceimprovement1@yahoogroups.com

David,

Your numbers are right on, but I never said I am able to see a 99214 each hour. I simply do the math collections divided by visits and it come up $91. Now we have many different types of payers. BCBS will pay $180-250 for a complete physical with screeing labs and a pap. Medicare will pay us $79 for a 99214 and $18.72 for a lipid profile, $2-4 for fasting glucose in a Diabetic and hypertensive atient with hyperlipidemia. Thats about $100 with the test cost of $8.80.

Now as an internist, I do not have any pediatric patients so my population is skewed slightly, but at last count I had 25% medicare patients most with 3+ chronic medical conditions who account for 40% of our visits but only 34% of revenue. The other patients are less than 65 with between 5-8% medicaid, which pays only .25 cents on the dollar charged. As of today we have seen 1185 patient visits and collected $105,000 for 88.60 revenue per visit. My business plan calls for $135/hour so we should be able to see a patient every 40 minutes when demand reaches that level.

Hope this helps perspective on your population as well.

Our next challenge is disease management. We have 450 patient with a combination of hypertension, diabetes, and hyperlipidemia. Seeing each patient just once every three months would generate 1800 followup visits. We are starting to think about using the callender year to phase appropriate interventions so that time is not wasted wondering what needs to be done at a visit. A quick check of last visit if a visit was in the 1st quarter, results should be ready or completed. It is now the second quater so liver functions and fasting glucose or lipid profile is due. Next quarter flu shot. I would realy like other to discuss the possibility of setting up a system like this.

The concept is interval based health care for chronic disease, with certain guidlines checked each quarter. Once every 5 years could be push for saigmoidoscopy.

What doi others think.

Kevin

P.S. Once developed one could easily make analysis of costs and revenue.

From: Nancy Guinn <NGuinn555@comcast.net>
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Date: Thu, 14 Sep 2006 09:06:55 -0600
Subject: Re: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

Patient contact hours is the key - not number of hours in a working day. Also, patient seen for physicals are seen for an hour. New patients are an hour. So I have about 26 patient contact hours per week, averaging 10.5 patients/ day in my busier months. If I see more patients, I suspect that my average per patient would start to go down, as I wouldn't be able to make the effort needed to charge correctly for my services (i.e. 99213 vs 99214). I'm providing this information for people in this group who are starting out and curious about finances. It depends a lot on the reimbursement available in a region. I noted once when we discussing reimbursement that HMOs in southern California, for example, pay badly. I take Medicare and Medicaid as well as self pays. The majority of my practice is HMO though, as that's what rules in this town.

Nancy

From: "umehta00" <umehta00@msn.com>
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Date: Thu, 14 Sep 2006 21:51:33 -0000
Subject: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

I am agonizing about opening an IMP.

At present I make 130,000. Working 14 days per month usually light
work. I too was very disappointed that my income was in the bottom
third of Family Medicine doctors.

The benefits of an IMP are that I can work for more years. It
appears less stressful and a more satisfying lifestyle. (Anyone
disagree with this?).

The disadvantages of an IMP for me are that I cannot leave my
practice for prolonged periods of time. I am sure there are a lot of
day to day hassles which I am unaware about.

If there is no chance for me to increase my income, I probably will
not open an IMP.

Uday Mehta, MD
Bellevue, WA.

From: "Jessica Ellsworth" <jellsworth92@cox.net>
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Date: Thu, 14 Sep 2006 15:30:19 -0700
Subject: RE: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

Wow, you work 14 days a month, light work and make 130,000? Wow, that would
be hard to beat.

Jessica T. Ellsworth, MD
Scottsdale, Az

From: "David Brock DO" <drbrock@rrohio.com>
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Date: Fri, 15 Sep 2006 08:09:34 -0400
Subject: RE: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

Yes, that $130,000 for 14 “light” days/month needs clarification for us. How do you do that? Also, is that really in the lower 1/3 of FP incomes? There are still a lot of FP’s making a lot less than that. I would think $130,000 is actually close to the middle.

David

From: Larry Lindeman <llindeman@mac.com>
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Date: Fri, 15 Sep 2006 08:31:40 -0500
Subject: Re: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

I was very disappointed when I saw the current FP incomes on the aafp web site. No wonder so few people are going into Family medicine. I seems that quite a few people on the list are making quite a bit lower than this. Even though many people are enjoying medicine more in this model unless the income is higher I don't think that it will be an attractive type of practice for many. My income it seems is at the higher end of this group. I think the reason is that I have not used the solo solo model. When I started 2 years ago I started in solo practice with a medical assistant. 6 months ago I added a 1/2 time doctor and a 10 hour per week receptionist. In July a nearby doctor retired and told all his patients to come to us. With some trepidation we replaced our receptionist with an almost full time LPN. I have always had an outside biller although I review the eob's. The extra staff allows me to see more patients and bring in more income. Our LPN has started to help with care management. I have 100 appointment slots per week but my target is 80. My partner has 40 slots and a 32 visit target. I have been running a little over my target. I am usually at the office 9 hours per day which includes a 30 minute lunch break and 60-90 minutes of paperwork time.

We have debated closing our practice, adding an enrollment fee of $350/yr like Kevin Egly suggested or stopping accepting low paying insurance. I think that we have decided on the last. In small practices like ours that gives great service and are full, it makes sense that people will be willing to pay a little more to get that kind of care. Right now there is a 40% difference between our lowest and highest payor. I am going to try to encourage our patients to sign up with the higher paying insurances or if they can't, to see us on a cash basis.

Have others in this list serve transitioned to a cash practice or started to add an enrollment fee.

Larry LIndeman MD

From: "Timothy Malia, MD" <tmalia@pol.net>
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Date: Fri, 15 Sep 2006 11:41:18 -0400 (EDT)
Subject: RE: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

I think these are all reasonable issues to consider. Certainly money is
something I personally considered as I "made the leap" and chose the
solo-solo model with a twist (adding other services that pay better... I
like to call it the "Robin Hood" model) as I hope it allows me to practice
medicine the way I want, have greater flexibility with life/work and still
make good income (need it for student loans... and in 4 yrs college
tuition!).

At this point I wonder if the salary issue +/- doctor satisfaction is part
of the research Gordon is doing with the IMP group. I think they've
published some info already about the first batches of data, so I wonder
if there is more info about these issues.

Tim

From: "John Brady, MD" <drbrady@thevillagedoctor.hrcoxmail.com>
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Date: Fri, 15 Sep 2006 12:12:51 -0400
Subject: RE: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

David,

I agree with what you are saying, but therein lies the problem. Most of us made the leap to this form of practice to provide higher quality care and have more professional satisfaction, and hoped the money would flow in as well. Insurances pay for quantity and so this has not been entirely the case, and as we add and see more patients, the time spent with each patient declines and at some point (I don’t know where) the doctor-patient relationship begins to falter and the quality begins to drop. At the same time, increasing chaos in the office (from more employees, more phone calls, etc) further destroys quality. So, following this line of thought, the only way to provide high quality medicine is to not accept insurances, which then alienates us from the majority of people who don’t want to pay privately. So, in our lovely society, in order to financially make ends meet we have to lower our standards, increasing our risk of getting sued and increasing our overhead further. So, the insurances have really become the force driving poor quality. Ironically, then the same companies send letters saying that they are enrolling your diabetics in special case manager classes to ensure quality. It really sucks!

Sorry for being disgruntled, but having “climbed the mountain and looked down into the promised land,” I hate that others might not join us in the journey. Maybe something will change somewhere…..

John

Just catching up on this terrific thread. Thanks for kicking it off Larry!
Larry, Kevin Egly and Larry's MD partner & I had dinner in Chicago a week ago. Larry has a sweet little office in a nice part of town. Chicago is an expensive place so his rent is higher than it is for some. Malpractice is rapacious in Illinois (full time FP without OB is 30K, is that right Larry?).

In spite of that, he's bringing home $150k for which he should be justifiably proud. He has two staff and 1.5 providers. Is he an IMP?
I vote Yes.
He has eliminated the delay for appointments and gotten out of the Mother-may-I triage by "urgency" game
He sees people on time
His continuity of care is fabulous

Is the money enough? Not really - Larry lives in a very expensive part of the country and has kids going to college.His second year into IMP he's moving into the developmental stage of raising the bar on chronic care.

We've learned anecdotally on the listserv that different parts of the country have huge variation in the big drivers of finances. Malpractice, reimbursement, rent are the biggest external drivers.

Please remember these basic principles:

Take-home income is that money left over after you pay your expenses.
The IMP model is not solo-solo, but a practice capable of delivering patient centered collaborative care (PCCC) in a sustainable practice.
Low overhead practices are more likely to be sustainable than high overhead practices.
There are some parts of the country where - due to the unfortunate mix of reimbursement and expense - no practice can survive without subsidy.
Our country elects to treat certain citizens as second rate and to create systems of payment and eligibility that give them third-world level care
It is theoretically possible to deliver PCCC in a high flow practice, and we eagerly await the practice that can demonstrate the capability.
We have demonstrated PCCC in very low flow practices AND in moderate flow practices like Larry's
We have to work together to continue to push for fundamental and substantial changes to the way we pay for health care
That payment ought to focus on rewarding the behaviors that lead to PCCC

From the IMP project we now have tools that can quickly tell us how well a practice performs (read this article: Wasson JH, Johnson DJ, Benjamin R, Phillips, J, MacKenzie TA. Patients Report Positive Impacts of Collaborative Care, Journal of Ambulatory Care Management Vol 29, No 3, pp. 201-208).

We're demonstrating so far that IMPs are the best in the nation at delivering patient centered collaborative care (see the FISHBOWL document, please excuse the typo about 2007, should be 2006).

The good news is that we have captured the attention of some very important people and organizations. Our guest speaker at the IMP convocation is Andrew Webber, the CEO of the National Business Coalition on Health. He and his organization are eager partners as we engage the nation in a discussion of solutions to our growing crisis in health care.
Gordon

From: Larry Lindeman <llindeman@mac.com>
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Date: Sun, 17 Sep 2006 09:18:30 -0500
Subject: Re: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

I think that the 3 most important things that are helping me are: 1) Having a good medical assistant to help with the many chores that need to be done in the office allowing me to see 16-18 patients per day. 2) Having a good outside biller who I talk to at least once a week on coding or reimbursement issues. 3) Learning everything I can about coding. Do you know how much you can reimbursed for splint application or using a global fracture code for a broken toe or rib instead of an e&m code?

For many people it is the right choice to start with the solo solo model to minimize start up costs. However after a practice starts to get busy many people might want to expand to having an assistant even though this means a higher overhead. I think that you might find medicine more enjoyable and profitable spending more time with patients and a little less on paper work. Limiting your staff to 1 or 1.5 still keeps the practice small enough that you will still know every patient well.

Another thing that I am just starting this week is comparing the reimbursement of every insurance company. In January we are going to stop participating with the 2 lowest payors

I practice in Chicago, Malpractice is $30,000/yr. I see 75-80 patients/week, I work 5 days per week. I do minimal hosp work and will probably give that up. We draw blood, we bill for labs done at quest if the reimbursement is good enough,do ecgs, I do minor skin surgery in the office. We have 10,500sq ft office for 1.5 docs

Larry Lindeman MD

From: Jean Antonucci <jantonucci@fchn.org>
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Date: Sun, 17 Sep 2006 10:38:09 -0400
Subject: [Practiceimprovement1] money
Reply-To: Practiceimprovement1@yahoogroups.com

Following larry's posts and Gordon's anaylsis with interst

Congrats to larry for doing well.

Two other things I note between many low paid IMPs and larry-

1. Population .It is not just reimbursement per se but larry has a
large population to draw fro he can drop insurances with ease and probably
could do cash only even.

Example In Maine 25% of the population is on medicaid So this porrly
reimbursed section of the populations is the majority of phone calls from p
propsective new patietns. State poverty and lower population-rural- are the
root casues. Rochester for example probably has a lots of people to
draw from and i think there are jobs there. Lou Spikol lives in i think
north eastern PA which is similar to where I live
Gordon nails it that this country is so darned inconsistent and patchy in
who gets health care how and why and when.

2 larry sees patietns 5 dyas a week. many of us work 4. I work so many
hours 4 days a week 5 would give me more incomes but I would feel i think
less wonderful about things. Translate . i get tired.
Larry has a mix of office procedures I think that reiumburse well- ad he
was doing some hopsital work.

Larry would you be willing to tell us your charge for a 99213?

jean

From: Nancy Guinn <NGuinn555@comcast.net>
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Date: Sun, 17 Sep 2006 16:03:37 -0600
Subject: Re: [Practiceimprovement1] Re: money
Reply-To: Practiceimprovement1@yahoogroups.com

I wrote an article a couple of years ago for the NM AAFP journal discussing physician burn out - and asked many doctors at what point in their day they experienced "empathy burn out" That's the point where we no longer care about the stories we're hearing and so we really are no longer capable of productive collaboration. Everyone gave me similar numbers "12-15 a day, after that I just want to get out of the room and go home." For all of us in regular practices, that was just the halfway point in the day. So, yes I can see many more patients per day, but I'm not sure how helpful those interactions really are. And that is the point of this IMP stuff.

Nancy