Effect of Economic Recession on Pediatric Practices
2009
American Academy of Pediatrics Pediatric Practice Manager Association
A SECTION ON ADMINISTRATION AND PRACTICE MANAGEMENT E-MAIL LIST SUMMARY Survey Results, Executive Summary, June 2009 Overview In an effort to better understand what general pediatric practices are experiencing as a result of the economic recession, the American Academy of Pediatrics Pediatric Practice Manager Association (PPMA) recently conducted a survey on this topic. The survey containing 18 questions was distributed to the PPMA electronic mailing list and the Section on Administration and Practice Management electronic mailing list via SurveyMonkey. There were a total of 71 respondents. Staffing Issues More than 60% of respondents indicated that their practice had made changes to staffing in the last year because of the recession (Q1). Many (30%) had suspended raises. Other practices had reduced full-time equivalents (FTE) of staff (28.6%) and physicians (4.3%) or had implemented a hiring freeze (20%). Nearly a quarter (24.3%) indicated that they had reevaluated benefit packages for their employees as a way to reduce costs. A very small portion of practices (2.9%) had actually implemented pay cuts. In the narrative section, other activities included only giving cost of living increases, eliminating or reducing overtime, and eliminating bonuses. Reducing Overhead Many practices are also considering ways to reduce overhead costs. The most common method (60%) of reducing overhead according to the survey (Q2) was changing vendors for better contract terms. This was followed by increasing participation in group purchasing organizations (32.7%) and implementing new health information technology for greater efficiency (32.7%). Other practices had reevaluated space needs (20%) and contracts with practice management software vendors (23.6%). A smaller percentage (14.5%) has been considering outsourcing services currently being done in-house. Other activities included renegotiating contracts with current vendors to get better rates, more comparative shopping for supplies, and better management of supply inventory. It should be noted that only 55 responses were given for this question (16 skipped). Patient Management When asked if patient volume had changed per FTE physician in the last year (Q4), 44.3% indicated that volume had decreased, while 57% indicated that the volume had either not changed or increased. Regarding a decrease in well visits from the same time last year (Q5), 35.6% indicated that they had seen a decrease. For those that experienced a decrease in well visits (Q6), most (20.5%) were by 5% to 10%, but the answers ranged from less than 5% to anywhere between 26% and 50%. Decreases in sick visits were reported by 39% of respondents (Q7). For these respondents, the majority (40%) experienced decreases between 5% and 25% (Q8), with 8% seeing less than a 5% decrease and only 2.5% seeing a decrease between 26% and 50%. Many practices (67.8%) reported an increase in telephone contacts by patients hoping to avoid office visits (Q9). Some families are delaying visits because of financial hardship, and 45% of respondents indicated that this resulted in an increase in acuteness of visits (Q10). Nearly half (43.3%) of respondents indicated that they were having more difficulty filling physicians’ schedules compared with last year (Q11). Despite their own challenges, practices are also trying to assist patients through this economic crisis (Q3). Out of the 48 responses to this question (23 skipped), 64.6% have been trying to identify self-pay patients and proactively offer assistance in managing payments. Some practices (54.2%) have been offering discounts, particularly to those paying cash or providing “prompt payment,” as indicated in some of the comments. Nearly 40% of practices are providing assistance to patients to apply for Medicaid or the State Children’s Health Insurance Program, while others (14.6%) are helping identify other financial assistance programs. A smaller percentage of respondents (8.3%) are using real-time adjudication to allow patients to see the bill up front. Revenue In addition to appropriately managing expenses, it is just as important for practices to understand how their revenue is being affected as a result of the recession. Out of the 51 responses received (20 skipped) for the question about changes in payer mix (Q12), 64% reported an increase in self-pay patients while 49% reported an increase in patients with Medicaid since this time last year. The largest increase was seen in high-deductible plans, as reported by 68% of respondents. Only a small number (3.9%) reported an increase in private insurance. Regarding days in accounts receivable (A/R), 33.9% reported an increase in days, while 46.4% reported no change (Q13). For the amount outstanding in A/R (Q14), 54.4% of respondents indicated that a higher percentage could be attributed to personal payment compared with amounts outstanding in A/R last year. More than half (51.8%) indicated that the practice’s gross collection rate had not changed compared with the same time last year (Q15), while 30.4% stated it was lower, usually by 5% or less (Q17). Some practices are getting creative by trying to offer different services to help increase revenue (Q18). Ideas presented include Increasing patient volume by accepting patients covered by the Children’s Health Insurance Program and all new patients Charging for completion of forms Selling books or other educational materials Selling over-the-counter medications Piercing ears Extending hours Colocating other subspecialists (eg, developmental behaviorist) Increasing screenings offered (eg, developmental, vision, hearing) Treating more complex cases (eg, allergy/asthma, minor orthopedic issues) Increase number of outstanding bills sent to collections Providing fluoride varnish Hiring better qualified staff
Note: The comments in this article are the views and opinions of those who stated them and may not represent American Academy of Pediatrics policy. |
