By Darren Whittemore, DO
To increase revenue and expand your patient base, you may have tried engaging with people on social media, advertising special service packages, or even parking a dancing balloon guy on the curb by your derm practice to drum up business. Nothing seems to work.
Serious change requires serious strategies. By tracking changes in billing and health insurance requirements and offering your resources and expertise to support pharmaceutical companies as they use technology to gather research data, you can uncover additional ways to help your practice grow. So give the dancing balloon guy the day off, and let’s explore four hidden revenue-building opportunities that can help point your derm practice in the right direction.
Outsource Medical Billing
Unless your accounts team has expertise in ever-changing CPT codes, AFA policies, and other Medicare, value-based care reimbursement guidelines, outsourcing medical billing is a popular and cost-effective option. Around 90 percent of healthcare leaders have considered outsourcing in both clinical and nonclinical functions to be more cost-efficient and better equipped to handle value-based care models. And here’s why:
A recent survey by Harmony Healthcare found that 33 percent of hospital executives reported the average claims denial rate hovering around 10 percent. In fact, across the nation, hospitals face average denial rates between 6 and 13 percent. When rejections occur, you need an experienced team that can respond quickly and are better equipped to handle changing requirements for medical reimbursements.
For example, board-certified dermatologist Dina Strachan, M.D., at Aglow Dermatology in New York, notes that every step needed to collect money from both patients and insurance comes with a cost attached. There is a huge time factor involved in understanding the fine print of the myriad high-deductible plans, and a lot of time is tied up in collecting and processing bills. By outsourcing billing, and placing a link on her website where payments can be made, a lot of time is recaptured.
“We don’t have to spend time opening and sorting mail, punching in, and processing credit card payments—it’s a time savings,” she said.
Apply to Host a Clinical Trial
Emerging cloud technologies are helping pharmaceutical companies tap into innovative alternatives for collecting rich, segmented research data. ClinicalTrials.gov currently lists 404,694 studies with locations in all 50 States and in 220 countries.
With in-person testing sites no longer being the only option for research, pharma can use both virtual and hybrid models to collect data.
Depending on the length of the study and the interaction levels required by the clinical trial directors, pharmaceutical companies will often pay clinics willing to dedicate their time and resources to help facilitate a relevant clinical trial.
Along with the revenue potential, most healthcare providers enjoy the option to provide their patients with the most recent treatments available, particularly in skin cancer and other chronic cases. According to the Dermatology Learning Network, interviews with dermatologists that have participated in clinical research show they can be professionally, intellectually, and financially rewarding.
“It allows you to give your patients cutting-edge treatment at a severely discounted price or for free,” said Dr. Mitchel Goldman, medical director of La Jolla Spa MD, in La Jolla, California.
In addition to the excitement of being involved in the development of new products and offering patients new treatment options, Steven R. Feldman, M.D., Ph.D., of Wake Forest University Baptist Medical Center in Winston-Salem, NC, noted the potential financial benefit to practices as well.
“In an era where managed care is paying less for each office visit, you can charge your usual office rate,” Feldman said in reference to patients enrolled in trials.
Reexamine Health Insurance Partnerships
Over the past 20 years, health insurance companies have consolidated to cut costs, meet higher demands, and, in some cases, move toward the government and individual health insurance markets under the Affordable Healthcare Act. This transition has given health insurance companies an advantage over physicians.
“Most dermatology practices lack the scale to negotiate with large health insurance companies on an even playing field,” Todd Petersen, CEO of Vitalskin Dermatology, explains. “These terms set year-over-year reimbursement rates and allow the insurance company to set billing, coding and utilization management rules. Consequently, nominal year-over-year increases can be largely offset by increased denial rates and tighter billing and coding rules.”
Although dermatology costs aren’t a high price point for health insurance carriers (accounting for less than 2 percent of medical costs), Petersen points out that pharmaceutical spending for dermatology-related drugs, such as psoriasis-related treatments, accounts for 6.5 percent of total spending with signs of future increases.
“For dermatology practices with market share and a large psoriasis patient population, using this strategy at the negotiating table may prove beneficial and provide the practice with improved revenues,” he says.
Invest in EMR Technology
Moving to digital-based technology, such as EMR or EHR, creates more efficient and profitable processes in a few ways:
- Participates in the Medicare Merit-based Incentive Payment System (MIPS)
Values-based care and reimbursements are growing and allow for additional revenue streams. EMR technology is required for billing compliance and patient dashboard access and to collect data and submit electronic data to CMS. According to Petersen, the initial investment cost of EHR technology will pay itself off down the road. “When considering whether to make the investment of complying with MIPS, consider the following: value-based reimbursement is not going away, and many practices have found the implementation of EHRs has helped them improve their billing compliance,” he writes.
- Enables faster turnaround times for lab test results
For Allen-Taintor Dermatology, not only did partnering with a lab that specializes in digital dermatopathology provide a faster turnaround time for lab results (turnaround time is now 75 percent faster, with results often received within two days of submission), but it also enabled their dermatologists to use a digital slide to encourage a conversation about the patient’s biopsy results and possible cancer care. As faster turnaround time increases the speed of business, more patients can flow through the practice with increased revenue as a result.
- Expands access to care
Digital-based patient files mean doctors aren’t limited by location to reach out for expertise on a patient’s case. With digital technology, a specialist in Boston or Switzerland can securely review a patient file and discuss a diagnosis in real time with the dermatologist. That leads to quicker results and prompt patient care, which again improves revenue.
With the dermatology field expected to grow by almost 11.4 percent by 2026, dermatologists can leverage revenue-building strategies by reducing overhead costs through outsourced billing services, research reimbursement rates with health insurance and government health program partnerships, participate in clinical trials, and expand digital patient care services. By tapping into these revenue outlets, you can help to prepare your derm practice for a future of growth.
By Eva Vertes George, MD
If you’ve toyed with the idea of starting your own dermatology clinic, you are not alone. In an industry worth almost $8.5 trillion with marked growth exceeding $800 billion by 2021, approximately 31.4 percent of physicians are independent practice owners.
Innovations in healthcare technology will likely trigger a new batch of medical startups utilizing emerging digital technologies to fill the growing need for dermatological care. The problem is that physicians have spent the majority of their time learning how to serve patients as dermatologists, not how to run businesses. That lack of business savvy may prevent many talented healthcare professionals from going into business for themselves.
Experts estimate over 5,000 dermatology businesses operate in the US, with indicators showing a consistent 1 percent growth in the dermatology industry since 2020. Cost, culture, and the customer determine whether a new practice is dialed in for future success as a solo practice or as part of a group practice.
Based on these factors, let’s discuss the advantages of (and a few of the possible deterrents to) joining an existing dermatology group practice based on cost, culture, and the targeted customer base.
Estimating the total cost to open and maintain a new clinic is likely the biggest obstacle for dermatologists planning to take the next step toward ownership. When you consider overhead costs associated with property, lab equipment, staff, marketing, and billing software, it’s no wonder that new clinic owners often underestimate the amount of money it takes to keep the doors open.
Because it often takes at least two years to turn a profit, Jerome Obed, DO of Broward Dermatology and Cosmetic Specialists in Florida, recommends having at least two years’ worth of money to live on when first opening a private dermatology practice.
If cash flow isn’t reliable, joining an existing practice is a strategic option. This is mainly because access to an active revenue stream, insurance credentials, and a robust client base is immediate. Another advantage of joining an existing practice is that you don’t have to put limited funds toward marketing, nor do you need business experience.
A trusting patient relationship needs a positive work culture to thrive. “Positive work culture will always support the healthcare professional-patient relationship. It will build patient trust and gain confidence among staff who provide patient care,” an NIH report concludes. “It will allow them to feel that other than the goal of working to cure their diseases, they receive care.”
The NIH study found that when patients see doctors and nurses who are satisfied in doing their work and providing services, it encourages patients to follow instructions. “When they feel teamwork is active among staff and stable leadership exists from their managers, these patients may be more than willing to allow themselves to seek medical advice and treatment.”
The advantages of joining an existing dermatology group practice have a considerable impact on your success. But the ease of stepping into an established practice can also interfere with the long-term benefits. For instance, joining an established practice means someone else decides who you will treat, the billing software you will use, and the length of your appointments.
By comparison, when you open your practice—and on the condition that your financing is secure—you have more control over your patient volume. You’re also in charge of your office hours, appointment times, services, billing, and lab partnerships.
In a group practice, the bottom line is the main focus. It’s part of the motivation to maintain a fast pace and see as many patients as possible. It can also mean a lower pay rate for you. It’s no wonder almost half (42 percent) of physicians experience burnout. And that’s something to be mindful of when making long-term business decisions.
It’s important to establish the type of patient care you want to offer. Those decisions can help you prioritize resources, possible clinic locations, and equipment purchases. For example, does your area report high incidences of skin cancers? How many dermatology clinics presently specialize in the services you hope to promote? One phone call can help you establish the wait time for new patients. Addressing these questions can guide your professional goals for your patients. But there are other factors to consider.
Your customer base includes more than your patients: It includes billing partners, insurance companies, lab partnerships, marketing firms, other healthcare providers, and more. When you own your clinic, you get to select and nurture those valued relationships.
Strategic partnerships, such as your dermpath lab, can help streamline your workflow process and reduce overhead costs. For example, working with a lab with expertise in digital pathology means you don’t need to invest in expensive lab and testing equipment. Partnering with a lab that integrates with your EMR technology and offers locum tenens services may open up new opportunities to expand your services without investing in an expanded staff.
By working with innovative, digital-based companies like PathologyWatch, it’s easier to see the possibilities of opening your own practice.
The healthcare industry will show plenty of opportunities for dermatology services in 2022. Choosing the best way to promote your expertise with optimal patient care can be a rewarding next step in your career. Improve your chances of long-term success by weighing the pros and cons of a group practice versus starting your own dermatology clinic (your financial strength, work culture, and customer relationships) and chart your new path forward.