Assume the Position: Memoirs of an Obstetrician Gynecologist (16 page)

     Medicine is an art.  It is medical science.  And it is a business.

When I first started medical school, I really hadn’t given that any thought.  I just assumed I would manage to make a living somehow.  One of the unique things Hahnemann did with us as freshman medical students was early on require us to spend an evening a week in a family medicine or primary care practice somewhere in Philadelphia that they had prearranged for us.  We were to do nothing other than sit and observe.

     I was sent into the heart of Italian South Philadelphia to the home office of a general practitioner.  One could almost taste the Philly cheese steaks from across the street, and only imagine the fresh pasta with gravy followed by a cannoli cooking in the row home kitchens next to his.

(Cheese steaks – the best!)

(Good Cannoli’s)

He had a small waiting room and a large office with an even larger desk behind which he sat, with me off to the side in a chair saying nothing and observing everything.  I was wide eyed.  He did it all himself without a nurse.  The patients were all his friends and neighbors, would sit in front of his desk, he would hug them, make small talk and chat, take their blood pressures, find out what was new in their lives, and then finally talk a little medicine with them. Sometimes, but not always, he would even examine them.  When all was said and done, they would get up and give him a $20 bill. He reached into his pants pocket and pulled out a large green wad of cash.   He gave them change to one degree or another.  This was my introduction to the business of medicine.   I decided then and there that I was never going to talk to patients about money. There had to be some better way. What it was I didn’t know, but I was going to figure it out.

     As an intern and resident, I was paid a salary by the hospital.  It was meager but combined with my wife’s wages we made about $30,000 per year between us by the end of my fourth year of residency.  Thanks to my parents I had no debt, unlike many medical students today.  Since we spent $1000 /month on our apartment, it left us enough for food, an occasional movie and cheap wine, and a few meals out. Nothing left to save.  We both walked to work, easy to do in the city.  When we left Philly to go to Phoenix, I had signed a three year contract with increasing salaries guaranteed as long as they liked me, the practice continued to grow, and they wanted me to continue to work.  Our needs were meager, were met and afforded us enough to start a family.

     One of my partners controlled the purse strings when I was an employee.  I had no idea how the business of medicine worked, the process of medical insurance, managed care, payroll, or anything to do with money other than when to expect my paycheck, and how to correctly mark for the billing office whatever procedures I did so that the practice could somehow bill and collect for my services performed. As an employee it was best this way anyhow, since I had my medical practice to build and concentrate on, the family medicine residents to teach and mentor, and my oral Board examinations for certification for which to prepare.  I also had a baby on the way.

     After three years as an employee, I was given the option of buying shares of the medical corporation and becoming an equal share holder, which entitled me to equal salary as my other two partners minus the cost of the buy in.  We did not work on a productivity basis.  It was assumed we would all work equally hard, and bring in equally as much money, so we all got an equal salary. This was the “corporate culture” I bought into, and I had no problem with it.  The only difference between us was I got less vacation than my partners, but over time that equalized too.  I chose to go to the bank and borrow the cost of the buy in so that I could immediately make the same salary as my partners.  My wife and I had never borrowed so much money before. Nor had we ever had that kind of salary.   When it came time for the banker to come to have us sign the papers, it was a short time after I had rather seriously injured my back during a fall from a hammock onto a brick patio (my fault but we needn’t go there). I had been bedridden on narcotics for two weeks and I could barely walk.  My wife, two small kids and I were holed up at a local hotel with a special weekend deal and a nice pool for the weekend, a nice place to recover. So the banker nicely enough came to the hotel to have us sign the papers.  He knew nothing about my back.  Perhaps he found it strange that I didn’t stand when he came in the room, and remained seated in the chair the whole time.  I wasn’t about to let him know that I couldn’t walk, for if he did, he probably never would have given me the loan.

     Over time, when I became a partner in a thriving business, I learned more and more about the business of medicine.  One of my partners ran the whole business from his office, and the other had nothing to do with the business side but was more entrepreneurial. Everyone contributed in his own way. But it was an old fashioned way, though successful, of running a modern medical business, probably the same way his Dad had run his medical office years earlier in Philadelphia. No computers, checks written by hand, invoices paid by hand written checks, scheduling done with a pencil in a large schedule book, etc.  Medicine in general, and Phoenix in particular, was changing drastically.  The ‘Golden era’ of medicine had ended.   I was only slightly privy to catching the tail of this age of medicine when I was in residency.  We residents used to call some of the surgical procedures the ‘blue plate special’.  Exam under anesthesia, D and C, hysterectomy, salpingo-oophorectomy (removal of tubes and ovaries), lysis of adhesions, and anything else that could be listed separately, each one of which came with a separate reimbursement.  The more one could list, the more one collected.  That is what brought an end to the “Golden age of Medicine”. Physicians ruined it for themselves. But that was the past. I had to learn the system going forward.

     The payment scenario was changing dramatically. Phoenix was the epicenter of it all.  There were few Mom and Pop employers, and many large companies headquartered in a rapidly expanding city.   Managed care took a strong foothold in Phoenix, and over time expanded nationwide.  To my former colleagues in the East I used to say, be prepared, it is coming your way, which it did.  Since there was no way to fight it, best to learn about managed care, how it worked, and how to maximize reimbursement if that were possible. That became my contribution to the business side of our practice. After countless business and managed care meetings that I attended, I came to understand that there was only one way to succeed financially in this kind of managed care and Medicaid environment. The business office needed to be computerized from top to bottom.  We needed to find a way to have a high volume, low overhead practice and manage the volume professionally.  In essence, we needed to run the business like an airlines.  Everyone would be treated kindly and equally, no one would be refused care regardless of payment method, everyone would get the same professional service, we would do our best to get every patient into the office the day they called if at all possible (get the seats filled), we would always try to get new patients in immediately when they called (why give them the chance to go somewhere else if they needed to be seen now and were on the phone?).  We joined every managed care program that was available to us and accepted whatever insurance paid for services rendered, and did whatever we needed to collect the insurance reimbursements in a timely manner. We accepted the fact that some people would sit next to each other in the waiting room, receive the same service, and some would pay more, or less, than others, a price determined not by us but by contract with the payor (the insurance company or government). No one would know. Do you know what the guy seated next to you pays when you fly? The business office managed our aged accounts receivable aggressively.  We discounted our services to those who had no insurance and could only pay cash.  We accepted credit cards. We used a collection agency for those patients who needed to be sent to collections, but we would still continue to see these patients.

      One of my partners decided to retire at about this point because he was ready to move on, and to some degree because he didn’t like the changes in the business of medicine. So I willingly became the chief financial officer of the corporation, which pleased my other partner and allowed him to pursue his other entrepreneurial ideas, in which I also actively participated.  But the business became mine to run, a challenge I gladly accepted, despite the lowest score ever seen on my college aptitude test for accounting.  

     We expanded our office to larger quarters to not only accommodate a rapidly enlarging patient load, but also a rapidly enlarging staff needed to deal with the patient load.  We also made the decision to invest money in a state of the art computer system for the business side of the practice.  This included modules that ran the scheduling, accounts receivable, billing, payroll, and accounting.   In 1988 electronic medical records were still in the future.  We expanded over the years from the three original partners to eventually 14 health care providers, four offices throughout the city, a total of 80 employees, and staff privileges at five hospitals, while operating from only one business office.  Fortunately we had infrequent employee turnover. When I found the right employee, I asked them what they expected in salary, and would almost always find that we would match their expectations.  In fact, often people asked for less than what I was willing to pay. If someone was good and felt they could do the job, we paid them what was necessary to get the job done properly. Professionalism was critical, and the staff was happy.

     Our original philosophy did not change.  High quality health care, personalized service to everyone regardless of financial status, and refusing no one were all high priorities.  If someone called us and wanted to be seen, they were seen that day if possible.  It made for a very busy life - a full time OBGYN with a large patient load, managing what I came to later find out was the largest non hospital based health care business in the State of Arizona.  I had come a long way from the guy who was told never to be an accountant. I did payroll myself every two weeks on the computer in my office, I entered and paid all invoices after reviewing them to make sure they were correct, and I kept daily tabs on both collections and aged accounts receivable.  I hired and fired employees when necessary, and helped recruit and interview new associates.  I signed insurance contracts. It was fun, challenging, and at times stressful. It was a large responsibility.

     Meeting payroll every two weeks for 80 corporate employees was a challenge but never once over the 12 years that I ran the business was it not met.  Every year we would have a corporate barbecue in a local Phoenix park for all employees, their spouses and kids. One year I agreed to flip the burgers.  It dawned on me as I made burgers for some 300 people that year that we were literally and figuratively feeding a lot of mouths.

     I was also true to the promise that I made myself when sitting in the south Philadelphia doctor’s office watching him pull that wad of cash from his pocket - that I would never personally discuss money with a patient.  It was all medicine for me with the patient.  If she needed something done in the way of a procedure, she went to the business office for the financial discussion and insurance questions, and if she paid cash which patients rarely did in the managed care and State Medicaid environment of Phoenix or needed a discount, my staff had advanced permission to negotiate.  I was happy with the arrangement.