I hear this quite often.
Normally from prospective clients who call and want their fees reviewed.
They claim they have a colleague who gets £250 from BUPA or £350 from AXA.
But they have only been offered £136 from BUPA and £175 from AXA.
The first question I ask is what specialism are they in?
The second is what specialism is their colleague in?
This is very much a loaded question because I already know the answer to the first part.
BUPA paying £250 for an initial consultation and £350 for an initial consultation, tells me the colleague is a mental health specialist.
Then, and it happened last week, the caller tells me they themselves are an ENT consultant.
There is the answer.
BUPA and AXA pay more for a mental health specialist than they do for an ENT consultant or a gynecologist.
I do have a rye smile on my face when the caller points out, they are just as qualified as a gynecologist or as an ENT.
For what it’s worth I agree.
But the reality is, BUPA and AXA deem mental health specialists to be worth more.
The usual argument is that they spend longer with their patients. I have no idea if that’s correct or not.
But what I do know is those are the fee levels.
Arguing with either insurance company that the rules are misguided is, frankly, misguided.
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One of the most common remarks I hear from my guys is the number of patients they see in the NHS.
They literally have patients queuing up to see them.
Such a comment is normally followed by the opposite when discussing a consultant surgeon’s private practice.
They want to see and sometimes need to see MORE patients.
This, for me, confirms the absolute cultural difference between the public and private sector.
In the NHS, a consultant surgeon does not have to do much in order for patients to be delivered to them.
The precise and exact opposite applies in the private sector.
In the private sector a consultant surgeon, because fundamentally a private practice is a business, MUST do everything he or she can to attract a patient.
He must engage in pro-active marketing.
He must ensure it is known his practice is there.
First of all however he must comprehensively understand WHY a patient is choosing private.
It is not merely the case of a patient wanting to be seen private because he or she has private medical insurance.
It is understanding WHY the patient has private medical insurance.
I, for one, dispute it is because private care is better than NHS care.
More likely it is because the private patient wishes to be seen quicker.
Even so, a consultant surgeon MUST still engage in marketing of whatever description.
If the patient can be seen at the private practice quicker than at an NHS location but the patient is unaware the private practice exists then all bets are off.
Therefore a marketing plan is an integral part of a private consultant surgeon’s business plan.
And therein lies the reference to the first and absolute cultural difference between an NHS practice and a private practice.
A Private Practise is a business.
In a NHS practice, patients will be delivered to the consultant surgeon without him even asking.
In private practice, patients will not just be delivered. They have to be attracted ti the business.
Note the use of the word BUSINESS.
Private practice is a business.
This is not the time to discuss which marketing strategies will and do work best for a private consultant surgeon.
Today is more concerned with highlighting that due to the differences between the NHS and the private sector.
A private consultant surgeon has no choice but to have a marketing strategy.
Just as a consultant must have a robust infrastructure to support the business, it is equally as important to have a marketing strategy.
Look at it this way, if any business does not have a regular number of customers or clients (in the case of a medical practise PATIENTS) then inevitably the business will not succeed.
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A little over a year ago, a group of surgeons based in the southwest of England contacted MHM.
In an effort to reduce a large number of issues with outstanding self-funding debtors, they had decided to ask new self-funding patients to pay for their initial consultation in advance.
I have to say my initials thoughts were this would absolutely stop any issues with self-funders.
It would do so for one very unfortunate reason.
There would be no self-funders at all because they had refused to pay in advance anyway.
The patients went to see other consultants instead.
And that is exactly what happened.
Hence the phone call to MHM with an instruction to establish a process whereby issues with self-funders were substantially reduced but not at the expense of turning patients away.
If you’ve read previous blogs you’ll already know how to process self-funders and the major reasons behind outstanding self-funder debts.
The MHM process does not, and absolutely should NOT, suggest asking the self-funder to pay everything in advance!
It is not the way to solve the problem.
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The first thing to realise about increasing a fee is that you CANNOT increase a fee for all your surgical episodes. Nor can you increase a fee every time you perform a surgical episode.
Having said that it is possible on occasion to request an uplift in fee under certain circumstances. The question of time taken, however, to perform the actual episode is not in itself the first reason to request an increase in fee.
All insurance companies WILL consider a request to increase fee but the time duration of the episode is not the place to start.
It is the “what, when & how to ask” that is the most important item to consider.
What, for example, might be defined as a 50% increase in the stated fee.
Do NOT merely ask for a 100% increase in fee because the probability is that you will not get it!
When? The “when” may be defined as asking for an increase to be considered before an invoice is submitted.
How? This may be defined as having the correct information in order for the increase to be considered.
When MHM is asked to request a 50% increase in fee MHM asks its client to supply the following information:
a. The precise details of why medically the consultant feels his fee should be increased. In other words, a written explanation from the consultant as to why the episode was more complicated than anticipated. The consultant is also asked to provide a copy of his/her theatre notes.
b. Details from the anesthetist who provided his/her services during the episode
c. Copies of correspondence from the Hospital detailing the original schedule i.e. time allocated etc.
MHM will then call the insurance company concerned and advise them a fee increase is being requested.
It will tell the insurance company a fee increase from say £500 to £750 is being requested. It will advise the insurance company all the information is available and ask where the supporting documentation is to be supplied.
Only then will an invoice be raised and submitted. It is then a question of checking the invoice every single week to ascertain the status of the invoice.
By following the above process MHM has on numerous occasions obtained an increase in the fee for its clients.
Without following the process, you probably won’t get an increase in your fee.
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Take, for example, a patient who requires an injection which may be performed by a private orthopedic surgeon at an outpatient consultation.
Thus you raise an invoice for, as an example, £185 [£90 for the consultation and £95 for the injection]. Please be aware for the purposes of this article the values are fictitious!
Upon receipt of the invoice by the patient’s insurance company, the value is rejected. You CAN’T charge both for a consultation and an injection on the same invoice on the same day. You can charge for one or the other but not both. So you are paid £90 for the injection only. What is interesting is that the immediate reaction from some consultants could well be to charge just for the injection and argue that is the right thing to do.
It is often suggested that the alternative would be to have the patient attend an outpatient consultation on, for example, March 10th and then attend for the injection on March 25th. See the patient twice in other words. In such a case, the consultant CAN charge for both.
Not sure that’s in the patient’s best interests. But if the aim is to max revenue it is certainly in the best interests of the consultant. I’m certainly not saying its right or wrong. I am saying it’s an option.
Where it gets really tricky, is that some insurance companies WILL let you charge for a consultation and an injection at the same time. Others will let you charge for some injections at a consultation but not all injections. Some, as mentioned, will not allow a charge for consultation and injection regardless if they happen at the same event.
And don’t forget not only do different insurance providers pay different rates for consultations; they also pay different rates for the injection too.
Gets a whole lot worse when the injection is pre-authorised as the fee for a consultation is higher than that for the injection, the orthopaedic surgeon charges for the consultation only yet the insurance company is expecting an invoice for the injection.
Unless you check each consultation and injection episode with the insurance company concerned, you will be! More likely you will actually undercharge at some point in time. For example: if the insurance company DOES allow a fee for consultation and injection if you charge only for one sooner or later?
You’ll be out of pocket.
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All MHM clients are very dedicated individuals. Having spent approximately 15 years training and finally becoming a consultant surgeon, they then go on to work incredibly long hours.
All at some point, however, have taken the decision to start a private practice. It’s unlikely they would be my clients otherwise if you think about it. They start a private practice because they wish to make more money doing what they love anyway. To have any other objective is either (a) silly or (b) engaging in self-delusion. There is no shame in admitting you start a private practice to make more money even if you love what you do.
At that point however your private practice becomes a business.
As I’ve blogged many times previously, it must, therefore, be run as a business. A business with more than a little social conscience but nonetheless still a business. Yet, sadly, many consultant surgeons make the mistake of believing their practice / business will grow and make them rich if they continue doing what they love to do i.e. help patients.
Sadly that is not true for doing what you love seldom leads to long-term financial success.
And that means, as much as you love being a Private Consultant Surgeon, you must measure the performance of your practice/business. This is the point the private consultant surgeon realises he/she must learn to understand financial analysis i.e. the numbers.
It’s not all that complicated actually. Supplying data to your accountant every year isn’t the same as understanding the numbers behind your practice though.
Let me give you a real example. I was contacted recently by an established private surgeon who, he claimed, appeared to be working all the hours God sends but said he was always broke. It didn’t take long to work out why.
The first good indicator was a complete lack of financial analysis other than a tax report a little over one-year-old. No debtors ledger was available so the surgeon didn’t have any real idea how much he was owed. Indeed it transpired both patients and insurance companies were only invoiced monthly.
So I took the last six months worth of clinic lists and checked how many had or had not been invoiced. Quite a lot had not. I did the same with surgical episodes with the same result. This was followed by an investigation into how much had not been paid even if invoiced.
But it was also a simple case of adding up the total revenue generated for each month, calculating the total costs (room rental, monthly indemnity insurance premiums, secretarial costs etc) and subtracting one from the other. Even if any type of provision was made for tax liability was ignored (bad move!) the results were not encouraging.
The really bad news is that the consultant looked very blank when I asked which percentage of patients were referred to him from which source i.e. how many GP referrals, private referrals, recommendations from previous patients, insurance company referrals etc.
It was clear this particular consultant had no real idea of how his practice or business was performing.
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Two different MHM clients – both consultant surgeons – have been advised by a specific insurance company that the fees for their initial and follow up consultations are being reduced. They are not amused to say the least. But what can they do about it? Nothing.
The real world.
Actually, that’s not strictly true. In a perfect world there is much they can do. But we don’t live in a perfect world. We live in this one.
In a perfect world they can, for example, pass any reduction in fees on to their patients. Save of course their recognition agreement with the insurance company forbids them to do so. If they do they are at risk of de-recognition. Ah came the reply, the insurance company won’t find out. Yes they will.
Or they can stop seeing patients referred to them by that specific insurance company. In both cases during the last half of 2016 that is over £10,000 worth of referrals. Both would suffer double percentage digit drops in private practice turnover. That is not good.
Toys thrown out of the pram
Both of these consultants however are by no means stupid. Neither of them just react. An immediate reaction is potentially the worst thing to do. Indeed many years ago MHM worked with one consultant who did just that when denied a fee by an insurance company. He even went so far as to tell the insurance company concerned unless they immediately put his consultation fees back up he would forgo his recognition with them and refuse to see their insured patients. They didn’t so he did. And immediately saw a 23% drop in the private practice turnover. Do NOT react. What is required is a considered response of all the options.
In the case of the MHM clients, I calculated what the drop in consultation fees would mean over a six month period against an assumption that the lack of referrals would lead to 25%, 50% or a 100% drop in patients from that specific insurance company. In all cases, for obvious reasons, there was a loss. But at least that loss was now quantified.
It is worth noting that the drop in consultation fees would not impact in a drop of surgical fees because surgical fees were excluded from the reduction.
That said a refusal to see patients from the specific insurance company concerned due to consultation fee reduction would automatically lead to a 100% drop in surgical fees as clearly if a consultant does not see a patient, it is extremely unlikely he’ll take that patient into theatre.
Who is driving the car?
Sadly there are only two options in reality: accept the reduction or don’t accept the reduction. I’m afraid the insurance company really are in the driving seat when it comes to setting their fees and there is little a private consultant surgeon can do about it. Many years ago a private consultant surgeon could charge what they liked and to a certain extent with a self-funding patient they still can. However, with insured patients those days are long gone. Rightly or wrongly, those days are over.
So what should the private consultant surgeon do?
MHM suggests an analysis of how the reduction will impact on the private practice should be undertaken. That will at least quantify how the reduction will impact on the private consultant surgeon in actual financial terms. All the data will be contained on a sales ledger and with the aid of an excel spreadsheet it’s relatively easy to perform the analysis.
Such an analysis also confirms how the reduction will impact on MHM for MHM charges a percentage of what is actually paid to the consultant. If that figure is lower then the MHM fee will also be lower. In other words, the pain is shared. Thus I don’t like it anymore than the private consultant surgeon but I can’t do a lot about it either.
The bottom line remains accept the fee reduction or reject the fee reduction. That I’m afraid is the reality.
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