Financial management challenges mount

January 1, 2006

National report — Dermatologists in private practice face growing challenges in managing their finances, a recent survey says.

National report - Dermatologists in private practice face growing challenges in managing their finances, a recent survey says.

Growing concern

Additionally, 86 percent said they consider balancing the practice of medicine with the management of their practices challenging, while 76 percent said further training in financial management skills would help them in this regard. The survey of 102 dermatologists was part of a larger analysis conducted by OPEN, an American Express unit dedicated to small businesses.

"As physicians, we are given little to no training on the financial management of medicine. We are expected to go into practice with basically no knowledge from which to draw," says Glynis R. Ablon, M.D., director of the Ablon Skin Institute, Manhattan Beach, Calif., and clinical assistant professor of dermatology at the University of California, Los Angeles.

Nowhere to turn

Many physicians look to other professionals such as attorneys for assistance, she says.

Additionally, she says, "The way our insurance plans are these days, reimbursement is terrible for dermatology. General dermatologists can barely make a living."

Under such conditions, she says dermatologists generally must see 40 to 50 patients daily to make ends meet. At this level, she notes, "One can have a high burnout rate. And oftentimes patients suffer because one doesn't have enough time for them."

"In the old days, patients would pay us cash, and they'd give the bill to their insurance companies," adds Haines Ely, M.D., in private practice in Grass Valley, Calif., and a clinical professor of dermatology, University of California, Davis.

Dermatologists see more patients daily than almost any other doctor, Dr. Ely says. A family practitioner, he notes, might see 20 patients daily with five employees. Conversely, he says, "A dermatologist might see anywhere from 50 to 70 patients a day, and at least in my practice, I have two employees, sometimes three" in an effort to minimize overhead.

Practice mangement consultant and Dermatology Times contributor Elizabeth Woodcock says that unfortunately, dermatologists are being challenged in both the revenue and expense areas.

"Medicare already has announced that physicians will receive a 4.4 percent cut on January 1, 2006," she says. "One might say that dermatologists don't deal with that much Medicare business. The problem is that most payers are set to respond to that cut" by cutting their own reimbursements. She is principal, Woodcock & Associates, a medical practice management company based in Atlanta.

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