Re: Rural practice issues

[Guest guest]

Yep, I

think that is what I’m finding here in London, Ohio. This is a rural &

largely agricultural town of ~ 10,000 people, but is about 20 minutes or so

from Columbus, Ohio with a population of close to 1 million. I am growing but

slowly, have lots of Medicaid/Medicare/self pays (not a good thing here),

etc. Things are certainly different in other geographic areas from what I

read on this list.

Rural practice issues

Folks

We have a problem to solve.

I get the impression that rural practice is at particular risk and

may in fact be untenable financially.

I hear from dedicated caring rural docs that they have trouble

filling their practices.

I hear that they serve a higher proportion of folks with poorly

reimbursing insurance or no insurance at all.

Is there a viable rural model?

Gordon

[Guest guest]

It is a problem. I did rural care. I would be very interested in

answers on this thread. I would bet most of the docs can be about as

busy as they want, getting paid for it in a rural community is a

different story.

The problems are, most do not have any base other than farming.

Limited to no industry. In rural areas there are those that are

pretty well off, most are barely getting by. It is very hard to say

no when there are no viable alternatives to health care for those

that can not afford it.

Distances to hospital and lack of er coverage can also be huge

issues. Many times the communities have had an influx of people w a

welfare mentality and abuse the heck out of the er which is quite

hard to deal with after having to see adequate numbers just to pay

the bills.

Some things should help to have a viable practice are things

discussed here. They include keeping costs down to a minimum and

using technology to minimize the burden of unreimbursed care.

Some overhead is fixed no matter where you are.

Most costs are actually higher in rural areas.

Rural health clinics used to be the answer, yet when the system is

set up where you can make a living, the rules are then changed,

making it impossible to continue to practice like you were set up to

meet the requirements.

One possibility is to align w critical access hospitals that get cost

based reimbursement to do a little cost shifting.

Brent

>

> Folks

> We have a problem to solve.

> I get the impression that rural practice is at particular risk and

> may in fact be untenable financially.

> I hear from dedicated caring rural docs that they have trouble

> filling their practices.

> I hear that they serve a higher proportion of folks with poorly

> reimbursing insurance or no insurance at all.

>

> Is there a viable rural model?

> Gordon

>

[Guest guest]

I have seen two models that work.

1) Mainly Cash based practice + Medicare, low

overhead. Accept little to no Medicaid. Clinic

should be located in a rural place where people

generally have a good work ethic but may be uninsured

or underinsured. This is a viable option in many

areas of the rural Midwest in my experience.

2) Rural Health Clinic.

Practical after one has been in practice for a few

years or with hospital start up support. In this

model, feel free to accept Medicaid since with cost

based reimbursement it pays as well or better than

commercial insurance.

This year's rate maxes out about $72 per medicaid

visit in Illinois. Some clinics get less if there

costs are less. Do a level 5 new patient visit = $72.

Look at an establish patient's runny nose =$72.

Medicare cost based reimbursement works out about

equal to standard Medicare reimbursement over a

year's time. Maybe a few thousand dollars more, but

not enough to warrant an RHC on its own merits without

a significant Medicaid population. 10-15% of patients

at least. Our clinic has 23%.

All Medicaid and Medicare visits are reimbursed at a

single rate set yearly based on last year's financials

that must be submitted to the government by an

accounting firm with working knowledge of the

reporting requirements. The feds set the Medicare

rate and the state sets the Medicaid rate.

If they determine that you've been overpaid (you were

too efficient and didn't have enough costs to account

for what they paid you) they will lower your rate

next year and you will have to pay the overage back

from the preceding year.

Conversely, they will cut you a check if they

underestimated your costs for the preceding year.

Definitely not a do it yourself accounting thing in my

opinion.

This is not an ultra-low overhead practice since a

midlevel provider must be hired at least 50% of the

hours the clinic is open. It can be low to moderate

overhead: 40-50%of collections. Support staff are

required to handle the volume it takes to support the

extender. One can get by with 1.5 - 2 FTE per MD/NP

with in house billing. Cost based reimbursement helps

offset the added overhead.

You will need professional help in setting a rural

health clinic up and managing the cost reports and

some special paperwork required by the government.

Setting up an RHC will cost about $10,000 as a

conservative estimate. Cost reports run about $2500

per year to prepare + time from your book keeper to

gather the required statistics. The process to get

certified as a new clinic take between 6 months and 2

years.

This model is best with a hospital covering start up

costs on an income guarantee basis.

This is not a ultra low volume practice style. 20-25

patients per day per MD, 15 per day for NP. 4-5 day

work week + hospital + OB.

Total 2005 charges of 1.2 Million.

Take home pay of $150-245,000, per MD + health

insurance, life/disability insurance and 15% of

pre-tax income additionally set aside for retirement.

Ben Brewer MD

__________________________________________________

[Guest guest]

People

in the rural Midwest here in central Ohio would not pay cash for visits, at least not more than $20 - $30

for an “office call”. Docs here either take most insurances or

they go under. The RHC may be an option, but I’ve never looked into

that.

Re:

Rural practice issues

I have seen two models that work.

1) Mainly Cash based practice + Medicare, low

overhead. Accept little to no Medicaid. Clinic

should be located in a rural place where people

generally have a good work ethic but may be uninsured

or underinsured. This is a viable option in many

areas of the rural Midwest in my experience.

2) Rural Health Clinic.

Practical after one has been in practice for a few

years or with hospital start up support. In this

model, feel free to accept Medicaid since with cost

based reimbursement it pays as well or better than

commercial insurance.

This year's rate maxes out about $72 per medicaid

visit in Illinois. Some clinics get less if there

costs are less. Do a level 5 new patient visit = $72.

Look at an establish patient's runny nose =$72.

Medicare cost based reimbursement works out about

equal to standard Medicare reimbursement over a

year's time. Maybe a few thousand dollars more, but

not enough to warrant an RHC on its own merits without

a significant Medicaid population. 10-15% of patients

at least. Our clinic has 23%.

All Medicaid and Medicare visits are reimbursed at a

single rate set yearly based on last year's financials

that must be submitted to the government by an

accounting firm with working knowledge of the

reporting requirements. The feds set the Medicare

rate and the state sets the Medicaid rate.

If they determine that you've been overpaid (you were

too efficient and didn't have enough costs to account

for what they paid you) they will lower your rate

next year and you will have to pay the overage back

from the preceding year.

Conversely, they will cut you a check if they

underestimated your costs for the preceding year.

Definitely not a do it yourself accounting thing in my

opinion.

This is not an ultra-low overhead practice since a

midlevel provider must be hired at least 50% of the

hours the clinic is open. It can be low to moderate

overhead: 40-50%of collections. Support staff are

required to handle the volume it takes to support the

extender. One can get by with 1.5 - 2 FTE per MD/NP

with in house billing. Cost based reimbursement helps

offset the added overhead.

You will need professional help in setting a rural

health clinic up and managing the cost reports and

some special paperwork required by the government.

Setting up an RHC will cost about $10,000 as a

conservative estimate. Cost reports run about $2500

per year to prepare + time from your book keeper to

gather the required statistics. The process to get

certified as a new clinic take between 6 months and 2

years.

This model is best with a hospital covering start up

costs on an income guarantee basis.

This is not a ultra low volume practice style. 20-25

patients per day per MD, 15 per day for NP. 4-5 day

work week + hospital + OB.

Total 2005 charges of 1.2 Million.

Take home pay of $150-245,000, per MD + health

insurance, life/disability insurance and 15% of

pre-tax income additionally set aside for retirement.

Ben Brewer MD

__________________________________________________

[Guest guest]

Gordon,

Thank you for the excellent question. This topic represents a large silent

segment of our nation's under- or poorly-served, especially seniors.

I am solo-solo, opted out of everything and do no hospital work or call. My

practice is very small, but I have not advertised since opening up to FP

patients in January. But I also do medical acupuncture and part time medical

directorship of our local hospice as well as urgent care moonlighting, so I do

not depend on my FP practice for my income.

I am still developing my operational infrastructure, buying bits and pieces of

Soapware, as well as hardware, as I can afford them. I am also getting trained

in a variety of integrative/complementary modes of treatments.

My angle is that I will offer the benefits of a IMP with the added services of

integrative, holistic medicine on a cash-only basis. I suspect I will get a

loyal, and hopefully sizeable, following of patients, but I have not launched my

ideas yet. Lately I have posted questions about advertising, Dragon speech ware,

laptop carts, etc.

I am also struggling with charges. My brain says be smart; my heart says be

charitable. So I have enlisted the help of a friend and mentor to help me

explore many issues of self-identity, spiritual awareness, etc. at the

http://www.thefulfilledlife.com/ website.

I admit my setup is just about as risky as anyone could make it, but somehow I

am OK with it--in fact, I feel confident, but I do not have numbers to back me

up--only my gut.

Anyway, I am open to ideas and am willing to enlist my practice in any kind of

study to not only participate in my own experiment but also watch its unfolding.

I do care about my practice, but I do not feel emotionally vulnerable within it.

In other words, I have a detached concern.

Gordon, if there is a place in your research for practices such as mine, let me

know. I feel nearly ready to " launch, " but I am still defining what I will do

and offer.

Thanks again,

Charlie Vargas

lin, NC

[Guest guest]

Gordon,

An excellent, and timely, question. So much depends on access to care,

especially for seniors, in rural areas. In my area in western NC many come to

retire; our county is the second fastest growing county in the 65-plus age

group.

I cannot offer a financial picture of viability since I am still developing my

family practice. I have opted out of everything, and I do not do any hospital

work or call. I am solo-solo, and my practice is very small. I have not

advertised since January, when I started seeing FP patients again.

My income does not depend on my FP clinic. I do medical acupuncture, part-time

hospice work as a medical director, and I moonlight at urgent care occasionally.

I am also getting training in various complementary areas, and I refer to my

practice as integrative. It is my hope that, in addition to bringing challenges

and joy to my professional experience, this will bring in patients who are

looking for this kind of holistic and integrative approach. In fact, the

patients I have came by word-of-mouth specifically because of this. Several also

do not have insurance, so they would have paid out-of-pocket anyway.

I am still struggling with what my charges are to be. I currently charge 150

percent of Medicare, but I do not like this formula, since these change, and I

do not think they are necessarily reflective of what I think is fair and/or

feasible. I also want to reach out to the Latino community as well as be

affordable for Medicare patients. So, I have my work cut out for me.

I concede I have chosen a very unlikely demographic area to do this; I also

concede that it will likely be challenging financially. But I feel confident

that it will work. I am enlisting the help of a friend who offers personal and

professional coaching; I anticipate setting specific personal and practice goals

soon that will make me more clearly define my direction.

I am open to ideas and suggestions, and I am willing to offer whatever I can to

the IMP cause so that others can learn. If I can be of any assistance, even by

making my practice transparent, or part of a study, let me know.

Thanks for the very astute question about IMPs in rural America.

Charlie Vargas

New Mountain Medicine

lin, NC

Date: 2006/09/19 Tue PM 12:55:36 CDT

To:

" -yahoogroups.com " < >

Subject: Rural practice issues

Folks

We have a problem to solve.

I get the impression that rural practice is at particular risk and

may in fact be untenable financially.

I hear from dedicated caring rural docs that they have trouble

filling their practices.

I hear that they serve a higher proportion of folks with poorly

reimbursing insurance or no insurance at all.

Is there a viable rural model?

Gordon

[Guest guest]

Gordon, we are making it, but barely.

This is a rural practice in that the town is 5000 in population and the school district is 15,000. There are also some even smaller towns in a larger radius that do not have any physicians so we potentially draw from 20,000 or so who use our town regularly. We have had this office open for three years and two months. I am the receptionist/biller/office manager and we have an LPN four days a week. We are open five days/wk. Rian does not do OB anymore. We do a few CLIA waived tests only.

After expenses (I'm on a wage/hr), we earned (together) only about 51,000 last year. That's about half of what Rian made before. However, in 2006 we are earning more and as we see more patients, the overhead does not really increase. Our patient visits vary from about four to ten per day, averaging around 6-7. Rian would be very happy to average about nine or ten, at the most. He had far too many years cramming in 25+ patients a day and he strongly feels he cannot give them proper care at that pace and in ten minute visits.

We take Medicare but do not accept Medicaid. We take patients without insurance and work out payment plans for them. Our largest contracts are with BCBS, Aetna and Medicare. We are lined up with one managed care plan (Priority Health) but we only have about 70 of those patients and from what we see and what we've heard from other area fps, the breakeven point with that HMO is at least a 100-patient panel. Our PH panel continues to grow slowly.

Factors affecting our practice:

* The Michigan economy is down and many businesses have closed so loads of people no longer have health insurance who once did. Therefore, there is an increased use of episodic ER care and less use of primary care offices for preventive or smaller acute problems. Also, patients have a harder time just paying their copays.

* Our town seems to have a skew in age distribution, having far more seniors than the average town since many young people move to bigger cities. Therefore, our practice has a fairly high Medicare component.

* Including Rian there are eight family doctors and three internists in the area so even though it's rural, perhaps there are too many in primary care. Rian does not believe there are too many, but I'm beginning to think that there may be.

a Mintek

(and Rian Mintek M.D.)

Allegan, MI

Rural practice issues

FolksWe have a problem to solve.I get the impression that rural practice is at particular risk and may in fact be untenable financially.I hear from dedicated caring rural docs that they have trouble filling their practices.I hear that they serve a higher proportion of folks with poorly reimbursing insurance or no insurance at all.Is there a viable rural model?Gordon

[Guest guest]

My community is largely retirees and

working families (bedroom community) 20 miles from Colorado Springs (pop ~ 500k). I filled

up pretty quickly, but I was already established in the community, being here

in a group for 5 years prior to hanging up my own shingle. The Sharps are

also here, and they may have a different perspective, being new to the area.

A. Eads, M.D.

Pinnacle Family Medicine, PLLC

phone fax

P.O.

Box 7275

Woodland

Park, CO 80863

From: [mailto: ] On Behalf Of L. Gordon

Sent: Tuesday, September 19, 2006

11:56 AM

To:

-yahoogroups.com

Subject:

Rural practice issues

Folks

We have a problem to solve.

I get the impression that rural practice is at particular risk and

may in fact be untenable financially.

I hear from dedicated caring rural docs that they have trouble

filling their practices.

I hear that they serve a higher proportion of folks with poorly

reimbursing insurance or no insurance at all.

Is there a viable rural model?

Gordon

[Guest guest]

My community is largely retirees and

working families (bedroom community) 20 miles from Colorado Springs (pop ~ 500k). I filled

up pretty quickly, but I was already established in the community, being here

in a group for 5 years prior to hanging up my own shingle. The Sharps are

also here, and they may have a different perspective, being new to the area.

A. Eads, M.D.

Pinnacle Family Medicine, PLLC

phone fax

P.O.

Box 7275

Woodland

Park, CO 80863

From: [mailto: ] On Behalf Of L. Gordon

Sent: Tuesday, September 19, 2006

11:56 AM

To:

-yahoogroups.com

Subject:

Rural practice issues

Folks

We have a problem to solve.

I get the impression that rural practice is at particular risk and

may in fact be untenable financially.

I hear from dedicated caring rural docs that they have trouble

filling their practices.

I hear that they serve a higher proportion of folks with poorly

reimbursing insurance or no insurance at all.

Is there a viable rural model?

Gordon

[Guest guest]

I would say my semi-rural

practice sounds almost ditto to yours, including the “factors” you

noted. My only exception is that I have been open ~ 2.5 years &

fortunately am seeing about 12 pts/day on average, with a range of ~ 8 –

17. I too sometimes think this area I’m in is oversaturated with docs

despite being non-metropolitan. There just does not seem to be enough good

paying pts to go around.

Re:

Rural practice issues

Gordon, we are making it, but barely.

This is a rural practice in that the town is 5000 in

population and the school district is 15,000. There are also some even

smaller towns in a larger radius that do not have any physicians so we potentially

draw from 20,000 or so who use our town regularly. We have had this office

open for three years and two months. I am the receptionist/biller/office

manager and we have an LPN four days a week. We are open five days/wk. Rian

does not do OB anymore. We do a few CLIA waived tests only.

After expenses (I'm on a wage/hr), we earned

(together) only about 51,000 last year. That's about half of what Rian

made before. However, in 2006 we are earning more and as we see more patients,

the overhead does not really increase. Our patient visits vary from

about four to ten per day, averaging around 6-7. Rian would be very happy

to average about nine or ten, at the most. He had far too many years cramming

in 25+ patients a day and he strongly feels he cannot give them proper

care at that pace and in ten minute visits.

We take Medicare but do not accept Medicaid. We

take patients without insurance and work out payment plans for them. Our

largest contracts are with BCBS, Aetna and Medicare. We are lined up with one

managed care plan (Priority Health) but we only have about 70 of those

patients and from what we see and what we've heard from other area fps, the

breakeven point with that HMO is at least a 100-patient panel. Our

PH panel continues to grow slowly.

Factors affecting our

practice:

* The Michigan economy is down and many

businesses have closed so loads of people no longer have health insurance who

once did. Therefore, there is an increased use of episodic ER care and less use

of primary care offices for preventive or smaller acute problems. Also,

patients have a harder time just paying their copays.

* Our town seems to have a skew in age

distribution, having far more seniors than the average town since many

young people move to bigger cities. Therefore, our practice has a fairly high

Medicare component.

* Including Rian there are eight family doctors

and three internists in the area so even though it's rural, perhaps there are

too many in primary care. Rian does not believe there are too many, but I'm

beginning to think that there may be.

a Mintek

(and Rian Mintek M.D.)

Allegan, MI

Rural practice issues

Folks

We have a problem to solve.

I get the impression that rural practice is at particular risk and

may in fact be untenable financially.

I hear from dedicated caring rural docs that they have trouble

filling their practices.

I hear that they serve a higher proportion of folks with poorly

reimbursing insurance or no insurance at all.

Is there a viable rural model?

Gordon

[Guest guest]

I would say my semi-rural

practice sounds almost ditto to yours, including the “factors” you

noted. My only exception is that I have been open ~ 2.5 years &

fortunately am seeing about 12 pts/day on average, with a range of ~ 8 –

17. I too sometimes think this area I’m in is oversaturated with docs

despite being non-metropolitan. There just does not seem to be enough good

paying pts to go around.

Re:

Rural practice issues

Gordon, we are making it, but barely.

This is a rural practice in that the town is 5000 in

population and the school district is 15,000. There are also some even

smaller towns in a larger radius that do not have any physicians so we potentially

draw from 20,000 or so who use our town regularly. We have had this office

open for three years and two months. I am the receptionist/biller/office

manager and we have an LPN four days a week. We are open five days/wk. Rian

does not do OB anymore. We do a few CLIA waived tests only.

After expenses (I'm on a wage/hr), we earned

(together) only about 51,000 last year. That's about half of what Rian

made before. However, in 2006 we are earning more and as we see more patients,

the overhead does not really increase. Our patient visits vary from

about four to ten per day, averaging around 6-7. Rian would be very happy

to average about nine or ten, at the most. He had far too many years cramming

in 25+ patients a day and he strongly feels he cannot give them proper

care at that pace and in ten minute visits.

We take Medicare but do not accept Medicaid. We

take patients without insurance and work out payment plans for them. Our

largest contracts are with BCBS, Aetna and Medicare. We are lined up with one

managed care plan (Priority Health) but we only have about 70 of those

patients and from what we see and what we've heard from other area fps, the

breakeven point with that HMO is at least a 100-patient panel. Our

PH panel continues to grow slowly.

Factors affecting our

practice:

* The Michigan economy is down and many

businesses have closed so loads of people no longer have health insurance who

once did. Therefore, there is an increased use of episodic ER care and less use

of primary care offices for preventive or smaller acute problems. Also,

patients have a harder time just paying their copays.

* Our town seems to have a skew in age

distribution, having far more seniors than the average town since many

young people move to bigger cities. Therefore, our practice has a fairly high

Medicare component.

* Including Rian there are eight family doctors

and three internists in the area so even though it's rural, perhaps there are

too many in primary care. Rian does not believe there are too many, but I'm

beginning to think that there may be.

a Mintek

(and Rian Mintek M.D.)

Allegan, MI

Rural practice issues

Folks

We have a problem to solve.

I get the impression that rural practice is at particular risk and

may in fact be untenable financially.

I hear from dedicated caring rural docs that they have trouble

filling their practices.

I hear that they serve a higher proportion of folks with poorly

reimbursing insurance or no insurance at all.

Is there a viable rural model?

Gordon

[Guest guest]

The question Gordon raises about the sustainability of a rural practice has been

lingering in my mind. I think it is because, in part due to the varied responses

here, the definition of " sustainable " varies among us.

I know the easy answer to the question What does sustainable mean? is whatever

you decide it means. But for the purposes of the IMP movement and potential

goals of demonstrated feasibility as a model, what do you all think sustainable

means? Has this been discussed, or defined, before?

The minimal definition would seem to be: the model that produces enough income

to equal overhead. Logically, whatever we want beyond that is up to our

personal, or professional, goals and aspirations.

Charlie Vargas

New Mountain Medicine

lin, NC