Private practice

[1217MD]

Im looking for some info on private practice and wondering if there are any attendings here that can help me out. I am an ENT resident and I have always assumed that I would go into general ENT private practice. It dawned on me that I have no idea what it is really like. I would love to spend some time with a private ENT in my community but obviously I dont have the time. So...

I need some help.

What kind of cases are typical of a general ENT? Obviously tubes and tonsils, but what else?

Can one really carve out a niche in private practice? Meaning, can you pick the cases that you want to do and pass others on? Is this difficult to do without burning your referral bridges? How would one go about maximizing those referrals that you desire and minimizing those you dont want?

Im hoping to do a lot of procedures in office to provide patients with good care and help patients minimize their costs. I think that high patient bills can mostly be attributed to the facility/hospital fees. One beautiful thing about ENT is you can provide some procedures in office. what are the best procedures to do in office?

Do most private ENTs that provide rhinology and sinus care do allergy testing? I enjoy sinus, but I think allergy is boring. If I do sinus surgery am I obligated to do allergy?

Thanks for the help

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[resxn]

What kind of cases are typical of a general ENT? Obviously tubes and tonsils, but what else?

That entirely depends on what you want to do as a general ENT. I see everything walk through my door that I saw as a resident with the exception of just really sick kids. But I see every sick adult I ever saw as a resident and more.

Can one really carve out a niche in private practice? Meaning, can you pick the cases that you want to do and pass others on?
Yes, but it is not always easy as discussed below.

Is this difficult to do without burning your referral bridges? How would one go about maximizing those referrals that you desire and minimizing those you dont want?
As a solo person, this isn't simple. The easiest way to do it quickly is to look for a community with a handful of general ENT's who do not typically like to do what your niche is. Problem is, when you move into an area, you're competition, so they're not likely to share that kind of information with you. You'll have better luck finding that out from the hospitals as to what kind of cases they are not tending to do there. The slower but probably utlimately more effective way to do it is start out doing everything you can for anybody who'll send you patients and as you get busy keep more and more patient slots open for those patients you want to see and fewer and fewer for those you don't. This is a delicate balance, though, because PCP's aren't going to like it when you stop seeing their dizzy patients, but will take their lucrative peds and sinus cases. I've seen this happen and heard PCP's complain about it.

When joining a group it's very simple. The group will simply tell you what they want in a new associate. If you're into ears, but the group isn't, you're golden.


Im hoping to do a lot of procedures in office to provide patients with good care and help patients minimize their costs. I think that high patient bills can mostly be attributed to the facility/hospital fees. One beautiful thing about ENT is you can provide some procedures in office. what are the best procedures to do in office?
Best in terms of what? Outcomes? Reimbursement? Efficacy? Largest Margin? Best in terms of money is cash for service cosmetics--fillers, botox, Pillar implants, scar revision, derm care, etc. The best bang for the buck in insurance-covered procedures are excisional biopsies with local flap rotation. There's a heck of a lot of other stuff out there that is covered by insurance that can be done in the clinic--balloon sinuplasty techniques, turbinate reductions, tonsillotomies, LAUP's, FEES, Flex Endoscopic Laryngeal procedures, etc.

Do most private ENTs that provide rhinology and sinus care do allergy testing?
According to the AAOA, 68% of all single-specialty group practices in ENT provide allergy testing. I'm sure it's higher for those who focus on rhinology.

I enjoy sinus, but I think allergy is boring. If I do sinus surgery am I obligated to do allergy?
Depends on your location. If every ENT in your community does allergy, and you don't, then all of the allergists in the community will refer to you because you're not competition. If you don't have a fair number of allergists, then yes, you probably need to do allergy testing and treatment. Also, if you're passing it up, you're over looking a potentially lucrative practice option.

One thing I think most residents don't get (and many ENT's) is that for every square foot of space in your office that is not generating money, it's losing money. For example, if you use paper charts, the amount of space in your office holding charts is losing money--that's space that could be used by audiology, another exam room, allergy, etc. Similarly, every minute you are not in your office, you have dead space not making money. If you provide audiology and allergy services even if you're not seeing patients, you're making money.

I'm not trying to sound like we're in this for cash, but you have no idea yet what a tremendous stress your overhead will be. Maximizing income and minimizing overhead will become a significant issue for anyone in private practice. If you don't do it well, you'll be working for your overhead. I see lots of people doing that.

 

[resxn]

I'd like to add one other point about working for overhead because I think there is a perception out there that doctors are money-grabbers. The whole healthcare debate has been manipulated by insurance, politicians, pharma, etc to shift blame. The weakest voice has been the physician community and thus we took a large chunk of the blame and so I want to address the economics of practice for a second.

No one can survive a career in medicine these days by doing it for the reimbursement. It's such a tremendous headache that there are far better and easier ways to make money than by being a physician. You have to do it because you love it. Otherwise, you'll burn out. It's happening more and more.

Having said that, protecting yourself is a crucial part of practice, particularly private practice. There are many forces at work to lower your income. There's the Pete Starks of the world who openly say that all physicians are crooks and not a one of them should make more than $100k. There are patients that feel that we charge far too much for what we do and actually take home what we charge. There are academic ENT's that are so upset that balloon sinuplasty surgery is reimbursed at the same level as is a standard FESS procedure that they successfully lobbied to have that procedure's reimbursement lowered. Sometimes, we are our own worst enemies.

I know guys whose overhead is greater than 75% and are working 75% of their day just to pay their operating costs. I know guys whose overhead is 50% and therefore only work 50% of the day to cover costs. Who do you want to be? The guy that's working 65hrs/wk to take home as much as the guy working 50hrs/wk because that latter guy is more efficiently controlling his costs and getting reimbursed?

As medical students and residents on this board, I implore you to take the time to learn the economics of medicine. It is only getting more difficult and more complicated. As I type this, we're staring at a >20% cut in reimbursement in Medicare payments if Congress does not act with emergent legislation to fix it in 3 more days. How many of you want to come out of medical school and residency with 30% greater debt than I had only to make 20% less in income. It's going to happen. It's already in process. You will either learn the economics of survival, or like so many physicians in the last year, you will close your doors and look for other opportunities.

Far better questions than the so often repeated, "What book is best as an atlas?" is the "If I join a group of 2 physicians, how many FTE audiologists should our practice have to optimize our cost to income ratio?" But I know, as physicians, we are so concerned about the here and now that we need to focus on the current situation and fail to see the bigger picture. Unfortunately, that's why we're all in the predicament we're in.

This post isn't about how to get rich, it's about how to survive, and that's what physcians need to focus on right now. And don't tell me the old "well we'll always need physicians because people are always going to get sick." Tell that to the PCP whose 7 patients went to the NP in Walgreen's today.

Perhaps I'm preaching to med students, pre-meds, and early residents that just do not yet have the perspective to think of stuff like this yet. It's hard to for someone in college to ask why they should care about how many employees they should have in an ENT practice, when they're focused on how the heck they're even going to get into medical school. I apologize for the rant, but I think we need people in the pipeline who are at least partially focused economically and not solely on how many cranks of the Kreb's cycle it takes to get 120 ATP.

 

[1217MD]

Thanks for the excellent replies. I really appreciate you taking the time to answer my questions. That is definitely great input and would love to talk with you more about this in the future, especially as I near the end of my residency.

As a student I never really thought much about the financial aspects of medicine, but I definitely have become more concerned with them since becoming a resident. More than anything, I am worried about my med school debt and the $$$ needed to start a practice. It almost seems like an insurmountable hurdle the more I think about it. So many residents dont have the slightest idea what is out there. They walk around saying things like- if I do x number of tonsillectomies in this time and bill this much, I will make x per year. They dont have any idea about the overhead, reimbursement, etc. I would really like for that not to be me.

So many of these things are not taught to us in med school and in my experience they are avoided in residency. My impression is that academic MDs have essentially no concern for these things and therefore do little to teach their residents some of the important aspect of practicing medicine today. Whether it is because they are financially secure in their practice, care more about teaching, or dislike the business side of medicine, I think that it makes us ill prepared for the real world. Fortunately, there are people out there as yourself willing to give a little guidance.

I have one other question for you....
Having been in private practice, do you believe it would be more beneficial for a resident to do a fellowship to make them more marketable? I mean complete a fellowship and then practice general ENT with a focus on a specific area rather than only practice your fellowship trained specialty?

Thanks again!

 

[resxn]

Having been in private practice, do you believe it would be more beneficial for a resident to do a fellowship to make them more marketable? I mean complete a fellowship and then practice general ENT with a focus on a specific area rather than only practice your fellowship trained specialty?

Thanks again!

Good question that depends entirely on the market in which you want to practice. If you're going to an area that has a need of ENT's (there's plenty), then if you do a fellowship, it will be hard for you to not also do some general which may not be your desire. It would be quite difficult to be a fellowship-trained guy wanting only sinus cases in an area already underserved by ENT.

On the other hand, if there are several general ENT's in a particular area and it's quite a hike to get to a subspecialist ENT for a particular patient population, your fellowship training is gold. One exception to that. You CANNOT plan on doing general ENT. If you do, you're declaring yourself competition to the very group of people from whom you're trying to get your most desirable referrals. I'm not going to refer my tough sinus patients to a guy who's also trying to get my tubes and tonsils as well. I'm feeding his business the ability to better compete against mine. Not real bright.

One other possibility. There are many people who do fellowships because they felt that their training in that particular field was weaker than they wanted and plan on doing general ENT, but are that much more competent in their subspecialty. I see that often with otology in particular. They market themselves as general, but are very comfortable with complex ear cases. That's totally a fine way to go, but again, those are guys that are not going to get a heck of a lot of referrals from the other general ENT's in town unless it's a very collegial atmosphere. Not too common in this day in age in most of the markets which I've seen.

 

[ExtraAverage]

As medical students and residents on this board, I implore you to take the time to learn the economics of medicine.

I agree with your post and very much appreciate your advice.
It is nice to know that there are private practice doc's out there who are concerned about those of us just starting our training.
I am a current M4 and will be starting my residency in ENT this summer. As you stated in your post, it is important that we put extra effort into learning the business aspects of practice throughout our residency training. Nearly 100% of ENT residents train at large academic institutions where the economics of practice is not nearly as prevalent in day to day operations. How would you recommend we go about learning the business aspects of our career while training at places that minimize it? Is it something that we will be able to do in residency or is it really more of learning and experiencing it once we are out on our own? How did you go about getting your business education? I am interested in hearing your thoughts on this...

 

[Fah-Q]

I agree with your post and very much appreciate your advice.
It is nice to know that there are private practice doc's out there who are concerned about those of us just starting our training.
I am a current M4 and will be starting my residency in ENT this summer. As you stated in your post, it is important that we put extra effort into learning the business aspects of practice throughout our residency training. Nearly 100% of ENT residents train at large academic institutions where the economics of practice is not nearly as prevalent in day to day operations. How would you recommend we go about learning the business aspects of our career while training at places that minimize it? Is it something that we will be able to do in residency or is it really more of learning and experiencing it once we are out on our own? How did you go about getting your business education? I am interested in hearing your thoughts on this...

It will be challenging. You'll probably have 3-4 faculty members that can describe the inner ear of a chinchilla to you in detail but have no idea about ICD, CPT or DRG. Your best opportunity might be if there is a rotation available with a community private practice ENT. Otherwise, pay close attention in clinic and the OR and ask lots of questions. Why did you code a level III? What CPT's are appropriate for this procedure? etc. Your operative log will be based upon CPT's so you should ask the attending after every case which codes to log. Chances are he/she will have no idea. Figure it out on your own...Google is your friend.

 

[resxn]

. How would you recommend we go about learning the business aspects of our career while training at places that minimize it? Is it something that we will be able to do in residency or is it really more of learning and experiencing it once we are out on our own? How did you go about getting your business education? I am interested in hearing your thoughts on this...

I agree with Fah-Q.

You will find that your attendings are not very aware of the economics of medicine, although in academia they are being forced more and more to appreciate these issues. However, their understanding is limited by the budget they are provided by the administration, not entirely or necessarily by their collections.

In your department, your chair will have a good idea of the income and expenses, but you'll find it far more complicated because of NIH and other grants, research funding, etc. More importantly, the department business manager will know the clinical side more thoroughly. I would be fairly frank with your chair and say that you'd like to investigate the economics of medicine. Perhaps that could become a published paper. You could compare the economics of the department with that of a local private practice through which you rotate or who is friendly with the department themselves. Your research will be quite shocking I think and worthy of review.

You won't learn the economics within your department, you need to look outside. Learning coding won't teach economics, but it will provide insight into the mechanics of the economics. In private practice, you'll live and die by your coding. So definitely learn it and why you do it how you do.

Do your best to be open with a private practice guy, preferably one who loves residents or who is into practice where he/she makes daily business decisions. Talk to their office manager. Don't do it for a practice bigger than 3-4 docs.

Ask you dept chair to request a copy of the academy statistics they publish every year on practice management (available on-line to academy members) and also get a copy of the AOA (Association of Otolaryngology Administrators) Benchmarking survey. I think the most recent one was in 2007. Just reading the data from these two sources will put you light years ahead of other residents.

 

[1217MD]

What about collections? I have heard that what you bill is not what you typically collect. Why is this? I am assuming that it is related to insurance declining payment, but I have no idea. What percent do most ENTs collect of their total billing? I am also curious about overhead. What is typical?

Thanks again...this is great info

 

[resxn]

What about collections? I have heard that what you bill is not what you typically collect. Why is this? I am assuming that it is related to insurance declining payment, but I have no idea. What percent do most ENTs collect of their total billing? I am also curious about overhead. What is typical?

Thanks again...this is great info

You'll typically collect about 30-40% of what you bill depending on how high you bill, but that's what you're shooting for. If you're collecting 20%, you're billing too high; if you're collecting 60%, you're billing too low. It also depends on your payer mix. If you have a high Medicare, Medicaid, and Tricare population, your percent collections will be lower than if you have a lower CMS mix.

According to the MGMA, a solo ENT office has an overhead of about 51%. It's a fraction higher for a single-specialty group unless you're at a 3-4 person size which is ideal for overhead by hovering between 48-51%.

 

[1217MD]

Do you accept Medicare? Do you think it is feasible as an ENT to see Medicare patients but not accept medicare payments? I have heard about MDs who see medicare patients but charge them up front and the patient is reimbursed by Medicare. Does this work?

How feasible is it to not accept insurance all together? It seems to me it may actually help our system. I for one would try to charge less if I knew that the pt was paying me and not a 3rd party. I realize most patients may not want to come to you when they pay for insurance and then you are charging them separately, but it sounds like it might improve doctor/patient relations (fewer overall patients means more time and effort per patient) and improve collections. (making it easier to run your practice and stay afloat).

Thanks again for your great input!

 

[resxn]

Do you accept Medicare?

Yes. I do but I limit the number I see. I have slots for one in the morning and one in the afternoon on a full clinic day. My partner has fewer, but has fewer clinics than do I.

Do you think it is feasible as an ENT to see Medicare patients but not accept medicare payments?

Absolutely, but this depends on where you practice and your referral patterns. There are many ENT's who opt out of Medicare and collect up front on those patients, submitting claims to Medicare on their behalf.

I have heard about MDs who see medicare patients but charge them up front and the patient is reimbursed by Medicare. Does this work?

Yes, depending on your location. If there are lots of ENT's in your area that accept Medicare, you won't get those patients. It's less of an headache for them to go elsewhere.

How feasible is it to not accept insurance all together?

Can be done depending on your area. If there are a ton of ENT's in your area, you will not be able to compete. However, if you are one of a few, and even better, others in your area do not accept insurance either, then this is a great practice model.

It seems to me it may actually help our system. I for one would try to charge less if I knew that the pt was paying me and not a 3rd party.

Almost every practice under the sun charges less for cash pay patients--to the tune of about 30% or so because of the decreased overhead to the practice involved.

I realize most patients may not want to come to you when they pay for insurance and then you are charging them separately, but it sounds like it might improve doctor/patient relations (fewer overall patients means more time and effort per patient) and improve collections. (making it easier to run your practice and stay afloat).

You are exactly right and this is becoming a more common practice. Much more common in the PCP world than in the specialty world because often pt's cannot afford the cost of a thyroid or sinus surgery or septoplasty out of pocket. You'll have to have payment plans, but it does work in the right settings.
I have a PCP buddy who quit all insurance. He sent letters to all his patients allowing 1000 patients to continue to see him. If they wanted, they needed to send him $400 and that would cover all the costs of his care for them in the office for a full year. Therefore, he collects $400k out of which he has to cover all of his overhead which he estimated at about $200k for 1000 patients. The result if it works out is that he collects $200k salary. Not bad for a PCP who has a panel of 1000 patients whereas the typical is triple that and won't make close to the same amount. Additionally, because he has fewer patients, he has more time with each. When it works, it works great.

 

[ThePimpDoc]

I'd like to add one other point about working for overhead because I think there is a perception out there that doctors are money-grabbers. The whole healthcare debate has been manipulated by insurance, politicians, pharma, etc to shift blame. The weakest voice has been the physician community and thus we took a large chunk of the blame and so I want to address the economics of practice for a second.

No one can survive a career in medicine these days by doing it for the reimbursement. It's such a tremendous headache that there are far better and easier ways to make money than by being a physician. You have to do it because you love it. Otherwise, you'll burn out. It's happening more and more.

Having said that, protecting yourself is a crucial part of practice, particularly private practice. There are many forces at work to lower your income. There's the Pete Starks of the world who openly say that all physicians are crooks and not a one of them should make more than $100k. There are patients that feel that we charge far too much for what we do and actually take home what we charge. There are academic ENT's that are so upset that balloon sinuplasty surgery is reimbursed at the same level as is a standard FESS procedure that they successfully lobbied to have that procedure's reimbursement lowered. Sometimes, we are our own worst enemies.

I know guys whose overhead is greater than 75% and are working 75% of their day just to pay their operating costs. I know guys whose overhead is 50% and therefore only work 50% of the day to cover costs. Who do you want to be? The guy that's working 65hrs/wk to take home as much as the guy working 50hrs/wk because that latter guy is more efficiently controlling his costs and getting reimbursed?

As medical students and residents on this board, I implore you to take the time to learn the economics of medicine. It is only getting more difficult and more complicated. As I type this, we're staring at a >20% cut in reimbursement in Medicare payments if Congress does not act with emergent legislation to fix it in 3 more days. How many of you want to come out of medical school and residency with 30% greater debt than I had only to make 20% less in income. It's going to happen. It's already in process. You will either learn the economics of survival, or like so many physicians in the last year, you will close your doors and look for other opportunities.

Far better questions than the so often repeated, "What book is best as an atlas?" is the "If I join a group of 2 physicians, how many FTE audiologists should our practice have to optimize our cost to income ratio?" But I know, as physicians, we are so concerned about the here and now that we need to focus on the current situation and fail to see the bigger picture. Unfortunately, that's why we're all in the predicament we're in.

This post isn't about how to get rich, it's about how to survive, and that's what physcians need to focus on right now. And don't tell me the old "well we'll always need physicians because people are always going to get sick." Tell that to the PCP whose 7 patients went to the NP in Walgreen's today.

Perhaps I'm preaching to med students, pre-meds, and early residents that just do not yet have the perspective to think of stuff like this yet. It's hard to for someone in college to ask why they should care about how many employees they should have in an ENT practice, when they're focused on how the heck they're even going to get into medical school. I apologize for the rant, but I think we need people in the pipeline who are at least partially focused economically and not solely on how many cranks of the Kreb's cycle it takes to get 120 ATP.

Perhaps the best economic advice I've read on SDN so far! I believe I love medicine and all it's got to offer, but the economics of it too guide my decision. No need to pretend about medicine being an altruistic calling, I need to pay the darn bills while I enjoy what I do. Lets hope things don't get too bad for us future physicians.
Thanks again resxn!

 

[1217MD]

Another question for you resxn.

Is it possible to accept insurance for certain procedures but not accept it for other procedures? In other words, does accepting insurance payments confine you to that type of payment schedule?

Say for example, I accept insurance for a parotidectomy but I do not for a tonsillectomy? Can I do that??

I ask this because I have heard some practicing doctors complain about the amount of money they are actually paid when doing procedures like tonsils. They say something to the effect of "I get paid 12 cents on the dollar for a tonsil"

My concern is, at what point does it become not feasible to perform a specific procedure because the 3rd party reimbursement makes it not worth the time invested? I for one would like to always be able to offer my patients the care/surgeries they need, but I realize that it can be to your detriment if you continue to spend time performing services that cant help you keep your doors open.

So, can you say to a patient for example, I will bill your insurance for your parotid but I do not accept insurance for your child's tonsil? And then arrange for a fee for service contract

 

[resxn]

Another question for you resxn.

Is it possible to accept insurance for certain procedures but not accept it for other procedures? In other words, does accepting insurance payments confine you to that type of payment schedule?

When you contract with insurance companies they require that you contract for all of the CPT codes in current use. Contracts are always negotiable, but it would be difficult for you to set up a situation like this for several reasons. First, it would take a tremendous amount of leverage on your part for an insurance company to agree. Either you're in a large group or in a very rural area. Second, there is no advantage for them. If that company does that, why would you as a patient choose that insurance? You won't, you are going to choose a policy that doesn't come with so many headaches. Insurance companies are in the business of signing policy holders and then putting the burden of payment on them. That's how you make money: increase revenue, decrease cost. Third, think of the amount of work it would take to do that. You have to go through code-by-code for each procedure, determine what you are willing to accept payment on and what you're not, create the contract, and submit it to the insurance company for approval. Just considering the legal fees for your lawyer to word it and then rebut whatever their underwriters say gives me hives.

Say for example, I accept insurance for a parotidectomy but I do not for a tonsillectomy? Can I do that??

In short, you can try, but it's probably not worth it. Go all in or all out.

I ask this because I have heard some practicing doctors complain about the amount of money they are actually paid when doing procedures like tonsils. They say something to the effect of "I get paid 12 cents on the dollar for a tonsil"

Amen, Brother. But you don't get paid $0.12 on the dollar just for tonsils, it's about every case. Usually, your contract you will find will be pretty evenly suckalicious for each code. Each company will have a contract that is that much more suckalicious than the other.

My concern is, at what point does it become not feasible to perform a specific procedure because the 3rd party reimbursement makes it not worth the time invested?

Far too often. I think on another thread I showed a calculation as to why it's not fiscally advantageous to do lots of H&N surgery in private practice. Look for that somewhere on the board and it's pretty clear why some procedures are not worth the investment (long cases with long global billing periods and high risk/high maintenance conditions kick your fiscal can in private practice).

Hey, just found it. Here's the relevant math from that thread:
Let's say I do a 41155 (Glossectomy; composite procedure with resection floor of mouth, mandibular resection, and radical neck dissection), but not the free flap--I'll leave that for the plastics guy. Let's say the patient already got trached for the sake of argument.

The RVU for that procedure is 73.52 and the medicare allowable is $2600.20 (nice of them to tack on the 20 cents)

Now let's look at 69346 (bilateral tubes). The RVU is 4.27, the medicare allowable is $153.49.

So for the math, let's say the H&N case takes me 6 hours. How many tubes can I get done in 6 hours? Well, I can do 4 an hour fairly easily if I'm running two rooms. So I can theoretically get 24 done. That's a bit of overkill. But for the sake of argument let's look at the numbers--that's $3683.76. Ok, so if we use a more realistic number and say I get 18 cases in that timeframe--that's assuming 3/hr probably fairly low estimate, I still make $2762.82.

Now, some people would say why the heck would I want to do 18 tubes instead of a cool case like the composite resection. Good question. Many wouldn't. I know I have no interest in doing 18 tubes in a day. But let's say I do 4 sets of tubes, 2 tonsils on kids under 12, and a FESS. That would add up as follows 4x153.49 + 2x268.51 + 895.43 = $2046.41.

Well, I'm down $700, but I'm out by noon instead of 3 or 4PM so I have a lucrative afternoon clinic I can still do and make that up and more by 3 or 4PM. I won't have to round on the H&N patient for $0 for the next 7-10 days. I won't have as significant a risk of multiple complications. I won't need to see that patient every month for the next year. And keep in mind that every visit in the first 90 days is free. Well, free isn't a big deal you say because I got a lot for the surgery.

Then think about this. Every minute you spend seeing that patient without making money, you're losing money. Your staff still makes a salary, you still have rent or a mortgage, you have equipment costs, EMR costs, taxes, insurance, IT costs, etc. In addition, every minute you see that guy, you're not seeing someone who will make money. So it's not a net zero for that 15 mins checking up on him at his 1 month appt. It's zero, minus your overhead, minus the money you would have made seeing someone who would have paid.

That's why it's a kick in the arse.

I for one would like to always be able to offer my patients the care/surgeries they need, but I realize that it can be to your detriment if you continue to spend time performing services that cant help you keep your doors open.

So, can you say to a patient for example, I will bill your insurance for your parotid but I do not accept insurance for your child's tonsil? And then arrange for a fee for service contract

If you can, more power to you. I don't think you'll find it'll happen or be worthwhile even if a payer says, "Yeah, send us your thoughts, we'll see if they work for us."

 

[1217MD]

Resxn

I'm wanted to ask you about some specifics re: overhead. Could you outline what is included in overhead to encompass 50% of the typical gross income? What things can you do to decrease this number or is it unavoidable? Also, this may be a very basic business question, but why is it that if your income increases, your costs increase as well? In other words, does your overhead increase linearly with income (strictly as a percentage i.e 50%) or is that not true and its just an oversimplification

Thanks again I appreciate the info.

 

[DoctwoB]

.

 

[resxn]

Resxn

I'm wanted to ask you about some specifics re: overhead. Could you outline what is included in overhead to encompass 50% of the typical gross income? What things can you do to decrease this number or is it unavoidable? Also, this may be a very basic business question, but why is it that if your income increases, your costs increase as well? In other words, does your overhead increase linearly with income (strictly as a percentage i.e 50%) or is that not true and its just an oversimplification

Thanks again I appreciate the info.

Well, lets look at my last month of expenses:
1 - payroll twice
2 - Advert in town magazine
3 - Antigen laboratories
4 - Coblator Turb wands
5 - Karen Zupko course for my biller and office manager
6 - Check verification service
7 - EMR subscription
8 - Paper
9 - Lunch for staff one day
10 - Taxes on offices at two locations
11 - Professional Fees to Lawyer for contract work
12 - Renter's Insurance
13 - Recredentialing fees at 1 hosp
14 - Answering Service monthly bill
15 - Medical Sharps disposal
16 - Pillar Implant Purchase
17 - Misc Office Supplies
18 - Medications (lidocaine, etc)
19 - Postage
20 - Toys for kids treasure chest
21 - T-1 lines at 2 offices
22 - Rent for 2 offices
23 - Texas DPS registration (state version of DEA)
24 - Liability Insurance for office
25 - Malpractice insurance
26 - Telephone bill
27 - IT support bill
28 - Ozarka in office water bottles
29 - Google Adwords
30 - Renewal of AVG antivirus software
31 - GoToMyPC subscription
32 - Fees for Collection Agency
33 - Refund for overpayment by pt on a surgery
34 - Payroll tax
35 - Yearly calibration of audio equipment

Payroll is the biggest expense, so running a tight ship in terms of staffing is the best. There is a balance so you need to provide a good enough salary without killing your staff that good people stay and balance that against killing your income with providing theirs. Payroll is the easiest way to save or lose money.

Be smart with advertising. Social media/internet offers by far and away the biggest bang for the buck as far as payment goes (with word of mouth being truly the biggest bang because it's free).

The American Academy of Otolaryngology Administrators has repetitively shown that overhead is lowest in groups of 3-4 and highest in solo practices. It's also very low in the mega groups--30+ docs.

There is no linear relationship between income and overhead (in terms of percent) at least as a rule. Sometimes the overhead will increase when you try to create an office that is all decked out with fancy woodwork, granite countertops, Kay/Pentax rather than Olympus strobe, ceiling mounted scopes, etc. However, income at least as it stands in Feb 2011 is based on volume and billing. That's it. You can be a great ENT without a fancy office and generate a great income. Times are changing, and quickly, so that may not always be the model.

You may have heard that overhead increases as your income does, but that is more often proportional. As you get busier, you hire more staff, provide more services, etc and this costs more. Nevertheless, it generates more patient visits and thus more income. No one would try to be busy if all it did was disproportionately cause you to lose income.

 

[1217MD]

Thanks so much for the reply.

What is typical for payroll? Nurse? Office manager? What are the basic needs to run an office (with regard to employees) and what do you typical pay each person for their qualifications?

Is it a good idea, particularly if you are a solo guy, to hire a PA/NP to run a separate clinic? (i.e. allergy, or audio, or cerumen clinic). Would this aid in making good use of your office time while you are operating? Do most ENTs do this?

Also, what can I reasonably expect to pay in malpractice premiums?

Thanks again

 

[resxn]

Thanks so much for the reply.
What is typical for payroll? Nurse? Office manager?

I'm glad you're asking these questions, because it means you want to know. But I'm concerned about how generic the questions are. What year resident are you? I hope that you're at least a jr resident because how you're asking them should be quite different if you were a senior.

Typical payroll for a nurse, office manager, etc depends on so many variables--geographic location, experience, workload, educational background, cost of living in your area, and so many more--that I cannot comment to any great degree on that without knowing those specifics. However, you can find pretty good survey info for that on AAOA and occasionally through the Academy.

What are the basic needs to run an office (with regard to employees) and what do you typical pay each person for their qualifications?

Again, it depends on your services, the number of docs, your location, etc. I would basically say for a solo doc just starting, you'll need a receptionist and office manager at min. You may add an MA, surgery scheduler/biller, audiologist, allergy nurse, etc as you grow.

In an office of 3 docs, I have an office manager, biller, surgery scheduler, 2 receptionists, 3 MA's, 2 audiologists, and 2 allergy nurses.

Is it a good idea, particularly if you are a solo guy, to hire a PA/NP to run a separate clinic? (i.e. allergy, or audio, or cerumen clinic).

Very difficult to say because many practices do this. However, in our area it's not a good idea in general unless they are doing the in hospital rounding/discharging for you and only seeing urgent sick visits. They cannot see new consults. I had a PCP tell me exactly why, "I'm an MD," he said, "and the last thing I want to see is a NP/PA telling me how to manage a patient I sent to a specialist for consultation. That person may have more experience than me, but they certainly don't have any more training. It's insulting to ask a midlevel provider how to handle my patients."

You can use NP's/PA's in your office effectively, just be careful how you do so. The problem is that you then have to make sure that they are profitable for you or at the bare minimum, breaking even. It makes zero sense for you to pay a salary to a provider but they cost you more than they make.

Would this aid in making good use of your office time while you are operating?

Yes. Any square foot you're not utilizing in your office to generate money is losing money. Likewise, every minute you're not in your office seeing patients in some fashion (clinic, allergy, audiology, whatever) you're losing money.

Do most ENTs do this?

Depends on the location.

Also, what can I reasonably expect to pay in malpractice premiums?

Thanks again

Totally depends on your location. If you're in a tort reform state, you'll pay significantly less than you will in a non-reform state. For example, the premiums are dramatically lower in TX and CA than they are in PA and FL.

 

[1217MD]

Please excuse the simplicity/generality of my questions. I am a senior resident, and for many of these questions I may know the answer, but it is only a theoretical answer (based on my experiences, observations). It is not based on anything that an attending has explained to me, and therefore I do not know if my observations are correct.

Also, I personally do not feel comfortable asking these types of questions to some of my academically oriented faculty. I feel that it is common knowledge that academic MDs are not concerned with the business side of medicine, and to express interest in this- suggests that you are in some way only interested in money.

Thanks again for your replies. I appreciate the info

 

[resxn]

Please excuse the simplicity/generality of my questions. I am a senior resident, and for many of these questions I may know the answer, but it is only a theoretical answer (based on my experiences, observations). It is not based on anything that an attending has explained to me, and therefore I do not know if my observations are correct.

Also, I personally do not feel comfortable asking these types of questions to some of my academically oriented faculty. I feel that it is common knowledge that academic MDs are not concerned with the business side of medicine, and to express interest in this- suggests that you are in some way only interested in money.

Thanks again for your replies. I appreciate the info

Not at all. And I apologize if I offended. Like I said, I'm glad you asked. I totally understand the apprehension of not asking the academic docs. I, fortunately, did not feel that way with most of mine but found that most had no basis in reality for advising on private practice economics anyway. Hopefully, you have some community docs affiliated with your program that you can ask. As long as you're not looking to be their competitor when you leave, they'll usually be very open to sharing economic insight with you.

 

[HEENT]

I'm sorry if this is a simplistic question but a lot of people say that clinic is more profitable than OR in private practice. Assuming that OR days are actually busy and scheduled well, is there actually truth to this?

It would seem to me that as surgical subspecialties are in general compensated better than non-surgical fields, that surgery would be the factor that makes it more profitable... can only provide insight?

 

[resxn]

I'm sorry if this is a simplistic question but a lot of people say that clinic is more profitable than OR in private practice. Assuming that OR days are actually busy and scheduled well, is there actually truth to this?

It would seem to me that as surgical subspecialties are in general compensated better than non-surgical fields, that surgery would be the factor that makes it more profitable... can only provide insight?

You will hear this repeatedly many times throughout your training and career. The reason is that it used to be a no-brainer that the OR was the place to make money, but that is no longer an hard and fast rule. As insurance reimbursement has put more emphasis on keeping people out of the OR by providing increased payment for non-facility procedures, surgeons have looked at ways to bring cases traditionally done in the OR to the clinic (e.g. sinuplasty). However, it greatly depends on what you do and how you bill.

I will almost always make more money having a busy OR day than a busy clinic day. For example, I did 3 image guided FESS surgeries in one day last week. I billed close to $23,000K for that 6 hours of surgery or so. That's ridiculous. I'll collect about 40% of that by the way--still not bad. Unless you're seeing 35+ people in clinic and all of them have some sort of procedure (i.e. scope) then it would be hard to even come close to that number. Let's make it more realistic. Assume I did 3 T&A's and 4 tubes on my OR day. I will probably make in that OR day the same I would if I saw 24 or so average patients in a clinic. I don't know about you, but I'd far more do 7 fun cases than 24 clinic visits. Change that to a total thyroid on someone with large nodules in pre-existing Hashimoto's or other pain in the butt thyroiditis condition. I definitely will make much more in clinic than I would suffering through that miserable case over the same amount of time.

Now, this is assuming that you're not counting what you're making through your audiologist, allergist, or other ancillary service. If you add those numbers to your clinic dollars, then only the lucrative cases in the OR will routinely beat the clinic. My opinion is that those dollars shouldn't count because you are not generating the money directly and that revenue could be generated whether you were in clinic or not. So apples to apples, OR usually comes out a bit ahead of clinic for me.

Not a dumb question at all.

 

[HEENT]

You will hear this repeatedly many times throughout your training and career. The reason is that it used to be a no-brainer that the OR was the place to make money, but that is no longer an hard and fast rule. As insurance reimbursement has put more emphasis on keeping people out of the OR by providing increased payment for non-facility procedures, surgeons have looked at ways to bring cases traditionally done in the OR to the clinic (e.g. sinuplasty). However, it greatly depends on what you do and how you bill.

I will almost always make more money having a busy OR day than a busy clinic day. For example, I did 3 image guided FESS surgeries in one day last week. I billed close to $23,000K for that 6 hours of surgery or so. That's ridiculous. I'll collect about 40% of that by the way--still not bad. Unless you're seeing 35+ people in clinic and all of them have some sort of procedure (i.e. scope) then it would be hard to even come close to that number. Let's make it more realistic. Assume I did 3 T&A's and 4 tubes on my OR day. I will probably make in that OR day the same I would if I saw 24 or so average patients in a clinic. I don't know about you, but I'd far more do 7 fun cases than 24 clinic visits. Change that to a total thyroid on someone with large nodules in pre-existing Hashimoto's or other pain in the butt thyroiditis condition. I definitely will make much more in clinic than I would suffering through that miserable case over the same amount of time.

Now, this is assuming that you're not counting what you're making through your audiologist, allergist, or other ancillary service. If you add those numbers to your clinic dollars, then only the lucrative cases in the OR will routinely beat the clinic. My opinion is that those dollars shouldn't count because you are not generating the money directly and that revenue could be generated whether you were in clinic or not. So apples to apples, OR usually comes out a bit ahead of clinic for me.

Not a dumb question at all.

Great reply. Thank you! It clarifies things so much to have real numbers.

 

[JieLi]

What's call like in private practice ENT in general?
-How often is it done typically?
-Is it necessary or optional in most cases?
-Is there a good chance of actually getting called to go in?
-When people say that ENT doesn't have that many emergencies, does that mean that when you are on call, you just see those cases early in the morning instead of in the middle of the night?

Would anyone please be able to weight in on any of these things?

 

[DennyCrane MD]

Quick question from an M1 about the sources of revenue from the clinic and the OR at a private practice setting. I originally envisioned patient interview, diagnosis, and prescription as the prominent portion of the clinic ("medicine") and the OR as the source of proactive treatments. Are the procedures done frequently in the office and make up the majority of the revenues classified under "clinic?" Due to getting referrals from PCPs and other ENTs who have already made much diagnosis, do ENTs often find themselves carrying out treatments rather than diagnosing in the real world?