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Reimbursement Rate Cuts Postponed for One Year

By Stewart Gandolf, Chief Executive Officer

Five challenge questions to being proactive and making the most of this marketing window

Physicians don't get much "good news" about reimbursement, so you may have already noticed this important report from our nation's capital. It didn't run on the eleven o'clock news.

Before adjourning just before Christmas, the 109th Congress passed and sent to the President the Tax Relief and Health Care Act of 2006.1

The good news for many practices is that Medicare physician reimbursements will "freeze" at 2006 levels, and that the proposed 5 percent reduction in reimbursements was postponed for one year.

Some people might say that a "freeze" at current levels feels like a left-handed compliment-and that reimbursement levels not going lower is only a flat spot on a downward slope. For the short term, at least, the cut in reimbursement for physician services will take effect in 2008.

We don't have a political comment here, but we do see a marketing message: By this barometer, you can expect 2007 to be financially flat at best, and expect the following year to turn down again. So, it may be smart business to regard this current New Year as a window of marketing opportunity, and use this time to leverage financial growth for the practice.

Challenge questions for a marketing reality check

Medicare reimbursement tables are a guide for other forms of health insurance, so your practice is likely to be affected by down-trends, even if you are not seeing many Medicare patients. So, given this crystal ball on the future, the question is: What can you do-proactively-to grow the practice now?

Nobody can foresee what will actually occur in the future (following the one year postponement period), but it seems prudent to assume that reimbursement rate cuts are likely. And if that's the case, now is a better time to grow the practice than later. And today is the time for a quick reality check of your practice development and strategic marketing game plan.

Carve out some quiet time, pull up your marketing plan and ask yourself these five questions for starters:

1. What's the date on your marketing plan?
Even well-considered plans become dated if they are not challenged at least quarterly. If it's been six months or more since you took a fresh look at what you're doing (or intended to do), ask yourself if you need a hearty "refreshment" or a completely new course of action?

2. What are your goals?
Even with a "freeze" in place, a modest growth goal may only leave you "flat" at year end. What adjustments are needed to make gains in the current year and potentially cushion any reductions that might follow in the next year?

Hint: if your incremental growth goals are not in the 20-30 percent range as a minimum increase for each year, you're likely to be short-changing yourself.

3. Is your marketing budget up to the task?
If you are working with a maintenance-level budget, if you're fortunate, you will only maintain what you're currently doing. If you have adjusted your goals, you'll need to adjust the budget to outperform your previous baseline. Do you have enough resources in the right places to make it a winning plan? Above all, marketing is a revenue center-not a cost center. You should expect performance to be 3- to 4:1 overall.

4. What are your opportunity gateways into the practice?
What are the one, two or three main things that you do in the practice that bring the best or most new patients to your office? (Initially, new patients are not looking at your "full capabilities," they have one primary need that attracts them to you at first.) Does your marketing program emphasize the best gateways that are of greatest interest or need of the patients and attract them to your doorstep?

5. How are you tracking your Return-on-Investment?
If you have not been tracking the source of new patients you can't tell what's working (or not). Without these numbers it's impossible to calculate your ROI or effectively manage your plan. If you don't have a consistent, reliable tracking system in place to bring you these numbers regularly, start now. Get them at least monthly-they are part of the compass that steers your ship.

Add it all up...

If you have the answers to all five of these questions, you're on the right track to making a difference with the practice during this opportunity window.

But if you are missing one or more critical component-you don't have a plan, goals, budget, etc.-or if you don't know how or where to begin, give us a call at (800) 656-0907and we'll help you find the answers you need.


1 Information regarding HR 6111 and other legislative information is available from the Library of Congress at: http://thomas.loc.gov/

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