I'm glad Dave was able to figure out what the caller was talking about. It sounded like a lot of double-speak to me. The caller sounded like a politician. He said a lot of words without saying much at all.
Yet another example of… being a good doctor doesn’t make you a businessman… being a good cook doesn’t mean you are a good businessman… being a good plumber doesn’t mean you are a good businessman…
Also, the problem with many doctors, is that they have been successful financially because. . .medicine pays a lot of money and they mistake that earning for being “good at business”. But a doctor earning big dollars is a lot different than a plumber earning a lot. Honestly most docs will do better in a hospital based setting these days if they exercise good geographic arbitrage. One can be very successful in private practice, but you can’t make any mistakes-almost every private doc does make mistakes.
@@gregderamo5589 One of my patients is a CPA she said doctors/healthcare providers are the worst with the business end because they only really want to practice medicine.
He needs a better office manager, and accountant at least. He shouldn't be worried about payroll if his doctors are 1099. They essentially are renting space and contributing to office staff. Most doctors I know in that position pay a flat rate to use the space and office staff. Office manager should have staff roles very defined. Accountant is there to make sure the rent covers cost and profit. Doctors need to pay their own nurses, and salary. Sounds like he is an employer and paying his doctors as contract. The two don't mix it has to be one or the other.
As an expert in this field of 30 years this provider needs a full assessment. Coding may have 3-5% impact. You need your current carrier agreements negotiated, and full billing review as typically we see 30-35% left on the table. Wish I could speak with this gentleman and help him.
@@markroberts8975 Not exactly. I would assume there are coding issues and this does have some impact but when we do assessments for providers, it usually only accounts for 5% or less of impact to revenue. The greater issue is the amount each carrier contract states they will pay. Answering the revenue challenge, patient volume is rarely to ever the answer. Analyzing the current payer specific agreements is the first step. I mean, what good does it do to see 5 more BCBS patients a day if they pay 80% of Medicare rates. Getting a grasp of that is first to identify gaps there and then negotiate those rates. I can tell just by that call, there is no one providing this provider with an extensive cross section of outstanding claims, A/R broken out by carrier, trend analysis of why claims aren't paying, and a few other metrics which are essential. We have primary care/internal med practices operating at as high as 40% net profit every month and many of our specialists operate at a 60% net after expenses. That would be a game changer for this gentlemen. Our average analysis reveals 30-35% of ALL claims have at least one error on them causing unnecessary denials and rejections. These unpaid claims are most often due to incorrect insurance carriers being billed, prior auth issues, benefit issues, missing or incorrect modifiers, no follow up on claims when they do reject or deny, using old or expired CPT codes, and the list goes on. Most clinics and clinic staff still don't have their heads around Medicare Advantage plans and/or Medicaid MCO plans which causes even more problems. Sad part is this is totally fixable.
I’m wondering about his payer mix. He may highly be niched to a poor paying insurance provider. . An expert needs to look at his contracting and billing efficiency.
Cattle running through a chute was a great analogy of how medical has become. Im 54 and i remember when i was a kid our doctor would sit and talk and basically gab with us and them mom wrote a check. Downfall was he was always 2 hours behind.
He also probably needs to renegotiate some of their contracts with insurance. If insurance doesn’t renegotiate you consider dropping them because they are not paying you enough to do the work. A medical office with 24 employees on a 2 million gross is unsustainable. I don’t see how the docs and nurses aren’t grossly underpaid.
That's likely why there's no money, there are too many of them and not enough patients generating revenues. Time to start cutting back on the personnel like Dave said.
He’s at what $91,000 in revenue per “employee”? For healthcare 100% unsustainable. From what I can see a family practice averages $225,000 per employee. Find more patients or thin out your payroll
This could have been my husband’s call several years ago…no money to pay payroll, employees costing too much, insurance companies not paying enough (medical billing that’s not hospital billing…way less for the little guy) it was really stressful! The solution?? He got rid of EVERYONE but the biller (who is excellent) and she also takes calls. He turned it into a concierge practice…now he can spend time with patients and still pay the bills. No more payroll tax, no more office drama, and we actually get a paycheck now! He knows many a private practice that’s struggling! Good luck! I know how stressful this is!
Healthcare is a weird world. You would think if you are in high demand then you can raise prices. That is not the way it works. This is a minnow (the caller) dealing with sharks(insurance companies and the government)
This affected one of our commercial cleaning contracts which was a small healthcare clinic as well. They were always bad w/ timely payments and the cyber attack just pushed them right on over the edge like this company. Had to take them to small claims court to get paid due to their “cash flow” problem.
I just said this same thing. He was like a politician. Dave asked a question and the caller said a lot of words, but didn't really answer the question.
Change Healthcare cyber attack!!! Im a nurse practitioner and I own my own practice. I have no employees. It was a frightening time! Practices suffered- insurance companies profited.
Its worth noting, that a lot of people don't realize, you don't get to just pick whether you want to pay someone as 1099 or W2. The nature of the work they do and the relationship between them and the business dictates what they should be. The reality is you can do it however you want, but if you ever get audited by whatever agency regulates that sort of thing in your state, there can be penalties and fines and repercussions, though the chances are probably pretty low.
agree with this 100% because the pool is vastly greater to choose talent from and also you don't have to pay for their unemployment insurance, 401k retirement plant, and in some industries, bathroom and drinking water
Who told this guy he could run a business? Nothing about this makes sense, sell the practice to an actual businessman or some idiot willing to take on debt yo pay you then go get a W2 job working for them or whoever
Yes, this happened around the country for a few months where insurance was behind for over 90 days on payment. Since the system they use for payments were hacked.
We have a commercial cleaning business and 1099’s give us their rate because they’re their own business. We either take it or leave it because they supply their own everything; supplies, equipment and insurance. They can charge $35/$40 an hr while my entry level W2 cost me $20 an hr including taxes and insurance.
Lots of businesses in the healthcare sector were hit by cyber attacks, but the big players take out cyber security insurance to cover incidents. I feel like his business was affected more by the lack of reimbursement. Same thing is happening in the entire sector. It's why thousand of pharmacies and doctors offices are closing.
Solution for this business to make money is prescriptions. More prescriptions to introduce new problems to fix. Those new problems will require more prescriptions and keep your customers coming back for life. Also those vendors provide incentives too.
This scenario is exactly why that fewer and fewer physicians and even physician groups no longer own their own practices. They are more like glorified corporate employees.
There was issue with a cyberattack on a United Healthcare clearinghouse “change healthcare” that suspended payments for many healthcare providers due to the data breach
With a 1099 you just write them a check. The 1099 worker has to do their own taxes, provide their own medical insurance, malpractice insurance, take care of their own retirement plans etc. When you hire w2 workers they will expect that the employer provides all the additional benefits and insurance - and if you don’t you won’t be competitive to hire them relative to all the other similar job options. To account for having to do the extra work related to benefits- 1099 employees are typically paid more than w2 employees. You can also more easily employ 1099 workers if you only need them for part time work and you don’t have enough work for them to be full time.
@arthrodea Still trying to wrap my head around this. As a former W2 employee my pay was 42 /hr but my actual cost to the company was about 120/hr. A 1099 doing the same work at 80 /hr is still a bargain to the company.
Thats a burr under my saddle...seeing my doctor looking at a timer instead of explaining their diagnosis and just calling a prescription in and not paying attention to the possibilities of it colliding with my other meds causing me harm...thank God I have wonderful pharmacy team that's paying attention. They've saved me several times. PATIENTS HAVE BEEN REDUCED TO BECOMING PRODUCT!
24 people in a doctors office.. doctors would be like 200-300k+, nurses could be from 60k -> 150k... Can't see it being too far off. I think he's just taking a massive income and it's hurting everything else and he doesn't know how to budget.
Isn’t there a break even point with 1099 contractors and employees? I assume someone that bills a business 55/hr is on par with an employee that gets paid $40/hr and gets a full benefits package, no?
cant we all see how many small businesses (run by those who know their "product" but dont have a clue if they are even profitable or not) will be blind sided once the all of this "sloshing" free money finally leaves the system and the owners realize their business makes NO SENSE any longer, they panic, and this economy falls apart over night...which by the way is about to happen very soon, based on callers just like this...
Was anyone else screaming for Dave to ask what kind of medical practice this is? A general internal medicine practice vs a dermatology practice vs an orthopedic practice would all have different reimbursement models and ability to change fees.
There is no more patient care in medical field ... everything is for profit ...see as many patients as possible in the shortest amount of time possible, with complete disregard for patient safety
Things were great when he was getting govt subsidies paid with our tax dollars. Meaning, if he thought his business was doing great without the subsidies then he shouldn’t have taken the subsidies.
Yeah, that NPs and PAs are hired to make money not lose money because they have less medical knowledge and cost less. Hiring a naturopath is a red flag also
I'm glad Dave was able to figure out what the caller was talking about. It sounded like a lot of double-speak to me. The caller sounded like a politician. He said a lot of words without saying much at all.
Yet another example of…
being a good doctor doesn’t make you a businessman…
being a good cook doesn’t mean you are a good businessman…
being a good plumber doesn’t mean you are a good businessman…
Well said, blunt and to the point
@@tate6809He never said he was a Doctor
Also, the problem with many doctors, is that they have been successful financially because. . .medicine pays a lot of money and they mistake that earning for being “good at business”. But a doctor earning big dollars is a lot different than a plumber earning a lot. Honestly most docs will do better in a hospital based setting these days if they exercise good geographic arbitrage. One can be very successful in private practice, but you can’t make any mistakes-almost every private doc does make mistakes.
@@gregderamo5589 One of my patients is a CPA she said doctors/healthcare providers are the worst with the business end because they only really want to practice medicine.
He needs a better office manager, and accountant at least. He shouldn't be worried about payroll if his doctors are 1099. They essentially are renting space and contributing to office staff. Most doctors I know in that position pay a flat rate to use the space and office staff. Office manager should have staff roles very defined. Accountant is there to make sure the rent covers cost and profit. Doctors need to pay their own nurses, and salary.
Sounds like he is an employer and paying his doctors as contract. The two don't mix it has to be one or the other.
As an expert in this field of 30 years this provider needs a full assessment. Coding may have 3-5% impact. You need your current carrier agreements negotiated, and full billing review as typically we see 30-35% left on the table. Wish I could speak with this gentleman and help him.
Do you mean coding of services to get more money out of insurance companies?
@@markroberts8975 Not exactly. I would assume there are coding issues and this does have some impact but when we do assessments for providers, it usually only accounts for 5% or less of impact to revenue. The greater issue is the amount each carrier contract states they will pay. Answering the revenue challenge, patient volume is rarely to ever the answer. Analyzing the current payer specific agreements is the first step. I mean, what good does it do to see 5 more BCBS patients a day if they pay 80% of Medicare rates. Getting a grasp of that is first to identify gaps there and then negotiate those rates. I can tell just by that call, there is no one providing this provider with an extensive cross section of outstanding claims, A/R broken out by carrier, trend analysis of why claims aren't paying, and a few other metrics which are essential. We have primary care/internal med practices operating at as high as 40% net profit every month and many of our specialists operate at a 60% net after expenses. That would be a game changer for this gentlemen. Our average analysis reveals 30-35% of ALL claims have at least one error on them causing unnecessary denials and rejections. These unpaid claims are most often due to incorrect insurance carriers being billed, prior auth issues, benefit issues, missing or incorrect modifiers, no follow up on claims when they do reject or deny, using old or expired CPT codes, and the list goes on. Most clinics and clinic staff still don't have their heads around Medicare Advantage plans and/or Medicaid MCO plans which causes even more problems. Sad part is this is totally fixable.
I’m wondering about his payer mix. He may highly be niched to a poor paying insurance provider. . An expert needs to look at his contracting and billing efficiency.
I love your clear words
"Well, you see, um, we didn't have any customers. All our money came from subsidy checks! When the checks stopped coming, we ran out of money!"
24 ppl on 2million is wild
That was my first thought.
Typical doctors office. They bleed overhead. Smaller is better a lot of times. Medical school doesn’t learn “diminishing returns”
Cattle running through a chute was a great analogy of how medical has become. Im 54 and i remember when i was a kid our doctor would sit and talk and basically gab with us and them mom wrote a check. Downfall was he was always 2 hours behind.
He also probably needs to renegotiate some of their contracts with insurance. If insurance doesn’t renegotiate you consider dropping them because they are not paying you enough to do the work. A medical office with 24 employees on a 2 million gross is unsustainable. I don’t see how the docs and nurses aren’t grossly underpaid.
That's likely why there's no money, there are too many of them and not enough patients generating revenues. Time to start cutting back on the personnel like Dave said.
He’s at what $91,000 in revenue per “employee”? For healthcare 100% unsustainable. From what I can see a family practice averages $225,000 per employee. Find more patients or thin out your payroll
This could have been my husband’s call several years ago…no money to pay payroll, employees costing too much, insurance companies not paying enough (medical billing that’s not hospital billing…way less for the little guy) it was really stressful! The solution?? He got rid of EVERYONE but the biller (who is excellent) and she also takes calls. He turned it into a concierge practice…now he can spend time with patients and still pay the bills. No more payroll tax, no more office drama, and we actually get a paycheck now! He knows many a private practice that’s struggling! Good luck! I know how stressful this is!
Healthcare is a weird world. You would think if you are in high demand then you can raise prices. That is not the way it works. This is a minnow (the caller) dealing with sharks(insurance companies and the government)
This affected one of our commercial cleaning contracts which was a small healthcare clinic as well. They were always bad w/ timely payments and the cyber attack just pushed them right on over the edge like this company. Had to take them to small claims court to get paid due to their “cash flow” problem.
The caller just seemed evasive and never gave full answers. He was answering in dribs and drabs.
I just said this same thing. He was like a politician. Dave asked a question and the caller said a lot of words, but didn't really answer the question.
Change Healthcare cyber attack!!! Im a nurse practitioner and I own my own practice. I have no employees. It was a frightening time! Practices suffered- insurance companies profited.
Why do I think that "Portland, Oregon" has something to do with this?
Its worth noting, that a lot of people don't realize, you don't get to just pick whether you want to pay someone as 1099 or W2. The nature of the work they do and the relationship between them and the business dictates what they should be. The reality is you can do it however you want, but if you ever get audited by whatever agency regulates that sort of thing in your state, there can be penalties and fines and repercussions, though the chances are probably pretty low.
When I saw the location of the caller, I was like "oh..." That makes sense now.
lol
Why does he say 1099's are more expensive than W2's? In my business, I've always found contractors to be WAY cheaper than employees.
agree with this 100% because the pool is vastly greater to choose talent from and also you don't have to pay for their unemployment insurance, 401k retirement plant, and in some industries, bathroom and drinking water
Crap benefits and pay would be the only possible way
Who told this guy he could run a business? Nothing about this makes sense, sell the practice to an actual businessman or some idiot willing to take on debt yo pay you then go get a W2 job working for them or whoever
Yes, this happened around the country for a few months where insurance was behind for over 90 days on payment. Since the system they use for payments were hacked.
I'm confused. How does it cost the business more to hire a 1099? Then they aren't paying all the taxes, the contractor is
They charge per hour or per client instead of a set daily rate
We have a commercial cleaning business and 1099’s give us their rate because they’re their own business. We either take it or leave it because they supply their own everything; supplies, equipment and insurance. They can charge $35/$40 an hr while my entry level W2 cost me $20 an hr including taxes and insurance.
Lots of businesses in the healthcare sector were hit by cyber attacks, but the big players take out cyber security insurance to cover incidents. I feel like his business was affected more by the lack of reimbursement. Same thing is happening in the entire sector. It's why thousand of pharmacies and doctors offices are closing.
Solution for this business to make money is prescriptions. More prescriptions to introduce new problems to fix. Those new problems will require more prescriptions and keep your customers coming back for life. Also those vendors provide incentives too.
This scenario is exactly why that fewer and fewer physicians and even physician groups no longer own their own practices. They are more like glorified corporate employees.
"Cyber attack" sounds like the excuse he is using when it sounds like bad decision making actually. 🤷♀️
There was issue with a cyberattack on a United Healthcare clearinghouse “change healthcare” that suspended payments for many healthcare providers due to the data breach
What is the reasoning behind hiring a 1099 worker and making them an employee saves money?
With a 1099 you just write them a check. The 1099 worker has to do their own taxes, provide their own medical insurance, malpractice insurance, take care of their own retirement plans etc. When you hire w2 workers they will expect that the employer provides all the additional benefits and insurance - and if you don’t you won’t be competitive to hire them relative to all the other similar job options. To account for having to do the extra work related to benefits- 1099 employees are typically paid more than w2 employees. You can also more easily employ 1099 workers if you only need them for part time work and you don’t have enough work for them to be full time.
@arthrodea Still trying to wrap my head around this. As a former W2 employee my pay was 42 /hr but my actual cost to the company was about 120/hr. A 1099 doing the same work at 80 /hr is still a bargain to the company.
Why is contract more expensive than W2?
no holiday pay? no pension? no health insurance? contract can terminate at any time. in my country that is why
Thats a burr under my saddle...seeing my doctor looking at a timer instead of explaining their diagnosis and just calling a prescription in and not paying attention to the possibilities of it colliding with my other meds causing me harm...thank God I have wonderful pharmacy team that's paying attention. They've saved me several times. PATIENTS HAVE BEEN REDUCED TO BECOMING PRODUCT!
Absolutely right! People don’t realize that pharmacists have doctorate degrees too. They know more than physicians about how meds work.
Massive payroll for that headcount. Too much.
24 people in a doctors office.. doctors would be like 200-300k+, nurses could be from 60k -> 150k... Can't see it being too far off. I think he's just taking a massive income and it's hurting everything else and he doesn't know how to budget.
Isn’t there a break even point with 1099 contractors and employees? I assume someone that bills a business 55/hr is on par with an employee that gets paid $40/hr and gets a full benefits package, no?
cant we all see how many small businesses (run by those who know their "product" but dont have a clue if they are even profitable or not) will be blind sided once the all of this "sloshing" free money finally leaves the system and the owners realize their business makes NO SENSE any longer, they panic, and this economy falls apart over night...which by the way is about to happen very soon, based on callers just like this...
How does a w-2 employee cost less than paying someone via 1099 method?
This man needs to know how to run a profitable business and apply those principals to a medical practice. Hire a consultant.
Luv that free money
Doctors offices almost always think more is better. They over hire, 2-3 med techs that could do the job of 1 better paid tech.
What was the question? Caller made Dave ask 20 questions on a road to... Where? This was hard to listen to...
Was anyone else screaming for Dave to ask what kind of medical practice this is? A general internal medicine practice vs a dermatology practice vs an orthopedic practice would all have different reimbursement models and ability to change fees.
Cyberattack meaning...embezzlement or ransomware?
😮😮Sounds like someone needs to learn about the business and come up a profit / loss model before running a business.
There is no more patient care in medical field ... everything is for profit ...see as many patients as possible in the shortest amount of time possible, with complete disregard for patient safety
Bet this is a wellness clinic
Why didn't Dave ask him how much he made??!!!!!!!
This dudes taking too much off the top.
This guy sounds like an "entrepreneur bro" who underestimated the cost of running a medical practice, and thought it would be an easy cash cow.
Things were great when he was getting govt subsidies paid with our tax dollars.
Meaning, if he thought his business was doing great without the subsidies then he shouldn’t have taken the subsidies.
This caller needs Ramsey therapy on the regular show not Entre Leadership. Baby Step 0.1, start over honey
Shut it down.
2 million is 8-10 people MAX not 20
This is why I retired at age 42 I don't need all these headaches to be honest with ya.
Dave doesn't know anything about healthcare providers lol
Yeah, that NPs and PAs are hired to make money not lose money because they have less medical knowledge and cost less. Hiring a naturopath is a red flag also
Cyber insurance, anyone?! 🙄
Thanks, Captain Hindsight.
Guy sounds like a liar