January 8, 2001
Make your practice more profitable
By Deborah Borfitz
Doctors are finding nontraditional ways to supplement stagnant
practice earnings—sellingeverything from pregnancy calendars
to advice on aging. Here's what works.
Faced with slimmer earnings and the hassles of dealing with managed
care payers, morephysicians than ever are looking for revenues beyond
the traditional realm of clinical practice. Besides boosting income,
they often want a change of pace and a lighter patient load, says
Maureen Swan, a principal with the MedTrend Group in Minneapolis.
Clinical research, cosmetic surgery, product sales, and "premier"
services such as executive physicals and heart scans top the popularity
list, largely because the revenue potential is significant. Drug
dispensing is also gaining interest, as is virtually anything that
involves the Internet.
The most successful ideas address the needs of a doctor's current
patient base—general surgeons offering prostheses and wigs
to chemotherapy patients, for instance. Another example is the customized
pregnancy calendar that Detroit-area obstetricians John R. Sanborn
and Michael A. Genord are selling, usually for $29.95 a pop. Their
patients receive it free, but sales to other expectant women bring
in $7,000 to $10,000 monthly.
Supplementing income by dispensing drugs
A growing number of physicians view drug dispensing as a logical
way to supplement practice income. Depending on payer mix and prescribing
habits, they can make $40,000 to $200,000 per year dispensing medications
out of their offices, according to Bill Janis, a regional sales
director for Tulsa-based Physicians Total Care. His company provides
services and medications to physicians who do their own dispensing.
Cardiologists and neurologists, as well as other doctors whose patients
are on maintenance medications, do especially well.
About 10 percent of doctors are currently dispensing, says Janis,
and the number isincreasing. One reason: Companies like PTC now
offer programs that electronically connect physicians' offices to
most HMOs' pharmacy benefit managers for immediate claims adjudication
and confirmation of reimbursement. The programs also fully automate
the dispensing process and inventory control.
With PTC's system, medications are prepackaged and sealed in counts
commonly dispensed. Labels are printed when the drugs are dispensed
and are easily modified. The system also tracks usage and automates
reordering by modem.
"Some studies have also demonstrated significant increases
in compliance and decreases in pharmacy error with point-of-care
dispensing," says Janis. Malpractice rates are unaffected,
though. Dispensing costs include $175 monthly in system support
and connection fees, a one-time licensing fee of $4,000, licensing fees as required
by the state, and equipment costs of several hundred dollars.
More doctors would be dispensing were it not for fear of computers,
says internist and emergency medicine specialist Richard D. Loew
of Stuart, FL. He contends that the technological side can be mastered
in 30 minutes. Patients like the convenience, he says, and he makes
$4 to $6 per prescription. With 40-plus patients per day receiving
at least two prescriptions per visit, revenues build quickly. Profits
are $35,000 to $60,000 per year.
Loew dispenses 70 percent of the medications he prescribes and
accepts the same insurance cards as Walgreens and Eckerd, with which
he maintains cordial relationships.
Loew pays nine cents per insurance transaction to Envoy, the central
switching service that connects him to the pharmacy benefits manager.
Loew credits security features on the PTC system and his own policy
against carrying narcotic pain medication for preventing employee
theft and break-ins during his seven years in the dispensing business.
Although his prescribing habits haven't changed, Loew says, there's
little to prevent overutilization, beyond a doctor's own conscience
and oversight by Medicare.
Copyright © 2001 and published by Medical Economics Company
at Montvale, NJ 07645-1742. All rights reserved.