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High unemployment in your locale can put holes in your schedule. Here's how to cope.
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High unemployment in your locale can put holes in your schedule. Here's how to cope.
When the Mattel toy factory shut down in Murray, KY, last year, wiping out approximately 1,000 jobs, FP Robert Hughes felt a domino effect in his practice. Laid-off workers, stripped of health insurance, suddenly were avoiding trips to his office.
"The unemployed tend to skip preventive care visits for Pap smears, PSA tests, and the like, as well as follow-up care for chronic conditions," says Hughes, who belongs to a seven-doctor group. "Or, if they get acutely ill, they put off seeing you until they absolutely have to."
You can hear Hughes' story repeated from coast to coast. The US has lost 2.3 million jobs nationwide since January 2001. Although the economy seems to be improving, recent rough times and rising premium costs have also punished people who've held onto their jobs: Employers are shifting more of their healthcare costs to employeesread higher copays and deductibleswhich is dampening demand for physician services (see "Copays make patients think twice about coming in"). While most physicians don't appear to be hurting for patients, some report that they're scrambling to stay busy.
"In several big cities like Chicago, we're seeing lower patient volume," says Michael D. Brown, president of Health Care Economics, a practice management firm in Indianapolis. "It's down as much as 10 percent in some primary care practices."
Hospitals are feeling the pinch, too. HCA, a chain that owns almost 300 hospitals and surgery centers, blamed a recent drop in earnings partly on lower patient volume, which resulted from higher unemployment in several markets and "general economic softness."
Physicians in California got an early taste of the economic slowdown when the dot-com industry went bust in 2000. Widespread layoffs in Silicon Valley eliminated thousands of capitated patientsand millions of dollars in paymentsfor the San Jose Medical Group. The downturn eventually forced the group to file for Chapter 11 bankruptcy in September 2002, says CEO Ernie Wallerstein. The 71-doctor group is close to emerging from bankruptcy, but only after closing five clinics and jettisoning seven doctors and 120 staffers.
Practices in California continue to be disrupted by high unemployment. "Many patients who find new jobs are working for less pay and lower benefit levels," says solo FP Ruth Hoddinott in Daly City, just south of San Francisco. "Uninsured patients tell us they can't afford routine preventive care. We've referred some to the county health system where they can pay on a sliding scale."
Hoddinott's schedule is still full, but that's not the case for another physician in her practice, who left recently because of the patient drought. Nor is it true for her combination nurse practitioner/physician assistant. "What they used to call dot-com heaven has become a hellish place," says Hoddinott.
Drug samples have become more important than ever. "We constantly get calls for samples from patients who can no longer afford their medications," says FP John McFadden in High Point, NC. Adds FP Robert Hughes: "The freebies are a huge social safety net."
Hughes and other physicians are also seeing an increase in accounts receivable and bad debt. "Fortunately, we've been able to reduce our overhead with the addition of an electronic medical record," says Hughes. "Otherwise, we'd have seen our income drop."
Fortunately, there are things physicians can do to help patients continue to receive needed careand keep their appointment books full in the process. Since patients facing tough times may be reluctant to keep or make appointments, be sure to remind them with a letter or phone call about scheduled preventive care or follow-up visits. "Most practice-management and EMR systems will help you keep track of these patients," says David Scroggins, a consultant with Clayton L. Scroggins Associates in Cincinnati.
But how will you collect for those visits from these financially strapped patients? One option is simply to write them off, providing free care. But there's a limit to how much you can give away and still remain profitable.
Another option is letting patients make installment payments over three or four months. If you're reluctant to assume the role of creditor, ask patients to pay by credit card. You get all your money up front, and the patient can slowly whittle down his credit card balance.
Some physicians are discounting their fees for self-pay patients.
Ruth Hoddinott knocks down her charges by as much as 30 percent. This summer, the Austin [TX] Regional Clinic began offering uninsured patients a discount card from an Addison, TX, company called Strategic Healthcare Initiatives. The card, which costs $19.95 per month, entitles cash-paying patients to a 25 percent reduction of their bill, says FP Norman Chenven, the clinic's founder and executive vice president. "Texas has the highest percent of uninsured patients in the country," he notes.
Discounting is fine, say consultants, but do it cautiously. "If there's a layoff in town, don't give automatic discounts to every patient who got a pink slip," says Scroggins. "Handle each case individually. After all, some unemployed people have the ability to pay their bills. Maybe they've extended their insurance coverage through COBRA or maybe they've gotten a healthy severance package."
The major problem with discounting is that it's possiblealthough unlikelyto run afoul of Medicare and private insurers. Medicare will kick you out of the program if you're billing it for substantially more than your usual charges. However, the Feds say you needn't worry about this violation unless you're discounting fees for close to half of your patients outside of Medicare and Medicaid. So discounts for a limited number of hardship patients shouldn't get you in trouble. To play it safe, though, don't reduce your fees for a particular service below the Medicare allowable, says Scroggins.
Likewise, contracts with private payers may require that you give them your "best fee," says Scroggins. If you advertise an automatic discount for self-pay patients, insurers may want such reductions for themselves. Again, apply discounts selectively and discreetly.
How about prescriptions? Samples go only so far. Physicians can prescribe less expensive generic medications, refer patients to organizations that give free medications to the needy, or tell them about saving money by buying drugs online (see "These Web sites help patients cut drug costs").
Even putting all these payment options into place may not be enough to keep your appointment slots filled during a local economic crisis. You may well need to recruit new patients to replace the ones you lose. To fill up its thinned-out waiting room, the Jefferson City (MO) Medical Group has stepped up advertising and extended its week-day office hours to a more patient friendly 7 p.m. John McFadden's practice in North Carolina has added Sunday hours.
Other strategies are to build a practice Web site, add new services, and by all means, cultivate referrals. "We're notifying specialists of our ability to take on new patients, and we're encouraging existing patients to invite family members to come in," says Ruth Hoddinott.
Nationwide, 13 percent of insured Americans are skipping physician visits because of increased copays and other forms of cost-shifting, while another 24 percent are delaying visits, according to a recent survey by Harris Interactive. These percentages are bound to increase67 percent of US businesses report that they intend to increase their employees' share of healthcare costs over the next two years.
Here's another figure that seems to be rising: the number of patients seeking free medical advice over the telephone to avoid copays. "These people have been calling my office incessantly and driving my staff to the brink of a nervous breakdown," says solo GP Liza Shiff in San Jose, CA. Her solution? Staffers now refer such callers to Shiff's new Web site where they can pay by credit card for an online consultation, with the fee ranging from $5 to $35, depending on the complexity of the problem. "There's a lot less ringing," says Shiff.
HelpingPatients.org: The Pharmaceutical Research and Manufacturers of America maintain this Web site to help doctors and patients identify drug-company programs that dispense free medications to the needy.
RXHope.com: This site not only guides you to companies that offer free medicines, but also lets you apply for them electronically in some cases, speeding up the process.
RXAssist.org: Sponsored by the non-profit Volunteers in Health Care, RXAssist.org features a search engine that locates sources of free medicines by brand name, generic name, drug class, or pharmaceutical company. There's also a state-by-state list of drug-assistance programs.
DestinationRX.com: Patients can find online drug bargains as well as pharmaceutical assistance programs here.
Robert Lowes. Don't let a soft economy slow your practice.
Dec. 5, 2003;80:49.