|2721 Capital Ave.
Sacramento, CA 95816-6004
Phone: (916) 446-5054
Message: (561) 873-8335
Fax: (916) 446-0500
|American Society of Dermatology, Inc.
A Voice for Private Dermatologists Since 1992
SHOULD WE OR SHOULDN'T WE CONTRACT?
Weighing the benefits and disadvantages of participating
in any managed care plan will help you focus on what is
best for your practice. As you review the following
considerations, keep in mind that most managed care
programs are discounted--less medical care is provided
for less than your usual fee. So you can't necessarily
make up lost revenue by increasing the number of services
The Upside ...
Increase patient volume and positive cash flow.
As managed care becomes the wave of the near future,
dermatologists who don't leap on the bandwagon may see a
hefty decline in their patient base. Participating
selectively in managed care plans can increase your
patient volume and positive cash flow.
Build a safety net during this transition period.
Contracting with certain managed care plans may help your
practice during the "shake-out" period resulting
from the shrinkage in dermatology services as the number
of managed care patients increases.
Reduce or eliminate administrivia.
Some managed care plans -- particularly capitation arrangements --
eliminate time-consuming administrative activities, such
as billing and insurance hassles.
Receive support services.
Many managed health care organizations offer practice
management guidance and provide learning opportunities
through team building, peer review, quality management,
and development of clinical and research guidelines.
... And the Downside
Lose autonomy and quality control of care.
A major argument for dermatologists not participating in managed care plans is the potential loss of autonomy, especially as employees of the plan. The ripple effect of this can be considerable--high volume requirements, limitations on services and follow-up, increased administrative tasks to justify your care and treatments, and strict coverage requirements. Not only is
quality of care affected, but discounted fees may make
it difficult to cover all the expenses in your practice.
Increase vulnerability to market whims.
Allowing too much of
your income to come from managed care contracts leaves you
vulnerable to the whims of the HMO and uncertain economic
change. For instance, if 30 percent of your income is from
a single HMO, and that HMO either forces you to take a lower
fee rate or doesn't renew your contract, you could take a
significant loss. So you need to spread your risk.
Treat more severe cases and less minor cases.
With primary care physicians treating more patients with
minor skin problems, the volume of patients referred to
specialists will continue to drop. The result is that you
will tend to see more severe cases that demand additional
treatment at a higher cost per patient.
Understanding the ups and downs of managed care contracting
is the first step toward making intelligent choices
about your participation in this process. Another consideration
to factor into your decision concerns the type of
reimbursement options available.