I knew before I ever started this clinic venture that good billing was the key.  I’m into this process by over 13 months and I still don’t think we have it right. I had worked in medicine for 30 years. I had been to several workshops on billing. I think I knew more than most PAs.  However, with that said, I had no clue how complex it was until now. Prior to opening our doors I spent months trying to find the best biller I could. I won’t go into details but I had several false starts. For one, it seemed like when about to close a deal with a great billing company, the company would back out because they saw my situation, a PA-owned clinic that was a headache clinic as too complicated for them. Then I got a highly recommended local biller. I thought we were set. At the last minute, big red flags went up and I had to let her go.  With our doors opening within a couple of weeks I suddenly found myself without a key player. Here is where I got into trouble. The demand on my time was incredible as I was winding down a 8-year practice and trying to, simultaneously, start a new clinic. It was during this period of chaos that I chose to do on billing internally with a biller who was very confident. I had set up interviews with two other billers who stood me up. To make a long story short, that was a disaster and almost bankrupted us. It brought me incredible stress during most of last year. Then a dear friend came to my rescue. She has good experience in billing and I know more than anything that she is a team player and in my camp.  This was a great step up.  But now I am finding that there are many things that we have been doing wrong. The only problem with my present biller is that she is a practice manager full time in my old practice. I honestly don’t think she has the time to keep on top of our situation. I’ve spent hours going over out billing during the past month. I don’t think many providers, who still see patients 40 hours a week or more, have to devote so much time to billing. But the layer after layer of billing I dive into, the more complex it is. We have a decent cash flow right now.  I’m still paying myself far below the average for my years in practice.  I won’t give myself a raise until I know that we are on solid ground. But good billing is the key. I’ve always known it was the key but I never knew how hard it would be to get here. It took me years to find a SP to work with me.  I suggest that finding the right biller up front should be of the same priority of finding the right SP. It is that essential. Our demand is still up. I’m actively recruiting for PA or NP help (but no response to ads thus far). 

One year ago today,  the doors to the Pacific Rim Headache Center officially opened.  This was after months of stressful work with banks, quality medical assurance commission, lawyers, vendors and landlords.  The ominous prediction from the business bankers at Wells Fargo, in so many words, predicted our quick demise. Then I had moved on to another bank. But we made it!  I wanted to sit down at this point and do a very detailed post-mortem (okay, wrong choice of words . . . let’s say a success-analysis) on this venture. However, ironically, I’m so busy that it may be a while before I have this luxury. I did want to share some important thoughts. I know that some may be redundant. But these are some of the surprises over this first year. While we are not getting rich, and the treat of financial failure is not out of the picture, I can sleep well on the night of each pay day and that’s an improvement. FIRST YEAR SURPRISES 1) The volume of patients and the demand for our services have been beyond my wildest dreams. 2) Getting to know the insurance companies as a medical business owner, I will have to say, they are far worse villains than I had every imagined. Simply, they have constructed a complex maze for paying you, and they are rooting for your failure.  They have no accountability. They can make arbitrary decisions that cost you thousands of dollars and there isn’t one damn thing you can do about it. It is like walking into Sears, buying a complete set of kitchen appliances, but then refusing to pay Sears because you found out that Sears uses a PO Box, and it is one of your arbitrary policies that you don’t pay for services to someone who uses a PO Box (even though you make your payments through electronic transfer, bank to bank). I know of no other business that operates with such arrogance and impunity and I put this situation as number one of what’s wrong with our health care system. We spend more energy and resources fighting with insurance companies than we spend helping patients get well. This is a travesty. But it will never be fixed because virtually every politician (on both sides of the aisle) line their pockets with health insurance company money. The companies know that their money will serve them much better by buying politicians than by paying for their dear subscribers care. More than 40% of our hard labor for their  subscribers is for free due to this maze. More than half of our time is spent in prior auths, billing, rebilling and etc. 3) Even in t his down economy, with such high employment, it is hard to find anyone who really wants a job where they work hard but are paid very well.  I was surprised how hard it is to find good employees or vendors.  It has been a process and it has taken a year for the pieces to come together. 4) The graciousness of my patients never ceases to amaze me.  My patients have supported me through thick and thin. 5) My SP has been extremely supportive. I was fearful that he would not be before we opened our doors. But this is as far as I have time to go at this juncture . . . I have things I must do.

I’ve alluded to these stories before but I want to tell one of them again, with an up date.  These are things that you could never foresee when you plan a business.  Everyone who has never done this would argue that somehow they are too smart or talented to allow these things to happen . . . but in reality, there is nothing they can do. We we chose our office space, I picked the newest and prettiest office building on our island. I think it was a smart choice. As part of our SBA loan, we had to sign an agreement that I would not leave this space for six years, the duration of the loan. We we first moved in, and had given out our address to all important entities, we noticed we weren’t getting any mail. Now the Post Office is just up the street and I’m sitting here typing and can see the top of the building easily. But, to my horrors, the Post Office told me that they did not deliver to this building.  I spoke to the Post Master and he said they “never would and never will.”  That was the only reason given.  They had also sent back all of our mail as “no such address.” This caused a huge amount of nightmares including having our malpractice cancelled because we didn’t pay the premiums. It also caused a stir with many of our vendors, such as insurance companies. Finally we had to get a PO Box at the Post Office while we continued our fight.  We had to give a “change of address” to the PO Box. This created a month delay in getting our payments and almost caused us to go bankrupt last summer. I was about to give up the fight in December, when Regence and a couple other insurance companies announced that they would no longer do business with practices who receive their mail via PO Box.  One insurance company had already denied $3,000 in claims because of having a PO Box.  I had to move forward more aggressively. The Post Office finally agreed to deliver mail but only of the mailman didn’t have to get out of his truck.  There was only one spot where a mailbox could go. The landlords denied permission to put it there.  I had to make the empty threat to move out (empty because if we moved out we would violate our contract with SBA and I would be force to pay them $65,000 immediately). So, finally the landlord approved the site. The post master took another month to give his approval. Then we put in our “change of address” to all entities. Oddly, every single insurance company, which refused to do business with us because we used a PO Box, only had PO Boxes. They are bullies and hypocrites! So, while we remain working our asses off, suddenly our income started to dry up again.  Today, we finally had the chance to work on that. It turns out that if you do a “change of address,” in our case from a PO Box to a street address, it is counted as a “move.” So, if a practice moves, then the insurance companies denies payment until they credential you at a new site. This is so frustrating and they don’t care if this makes no sense. Any excuse to delay payments makes them richer. The last one, which had not paid us in a month, was medicare. We called them and said because we moved they would withhold all payments for 4 months. That was the last straw for me so I called my congressman this morning and we are working on fixing this. But who would have guessed that this would create such a nightmare for a small business.  

We will be approaching our anniversary date in a a few weeks and I wanted to do a series, maybe just two, posts about where we’ve been and where we are. A quick update:  The demand for our services has never been stronger.  Two of the five headache practices in the state are shutting down, so the demand should continue to grow. I’m quite confident that I could hire and support a new NP or PA in headache. The trouble would be the transition months. They would want a guaranteed salary. We would not have the funds to support them until their revenues started coming in . . . which would take about three months.  I’m still trying to get my head around that idea.  The bank has refused to help us. The revenues are steady. We are not getting rich as I have a large debt load. Much of load came from the perfect storm were we had to greatly under perform for about six weeks. It was the combination of the holidays, my office manager being out ill, snow storms and my SP being out of the country for two weeks forcing us to close our doors.  But I’m paying off the Feb debt $5,000 at a time. At this rate it will take two more months. I think we have helped a lot of people. It is so rewarding having patients come from 100 miles away on a whim (having been followed by several other clinics) and then to find relief. As a couple of patients told me last week that this is the best they’ve done in 30 and 40 years respectively.  That’s why we come to work everyday. I hate this idea of having to focus on money and worry about it. But if we don’t have the money to keep the doors open, then we can’t help the patients. In this posting I want to speak of one big lesson I’ve learned over this first year. I  may share more later. A wise PA, who had started his own practice a few years ago, told me, “Mike, figure your budget the best you can. Then double your expenses and halve your income . . . then you will have an accurate number.” That didn’t seem right to me. I honestly felt like I could do things better. Be more efficient. Hire good people, yadda, yadda, yadda. But, he was right.  I wanted to talk about why he was right. The Principle of Vendors: All companies need vendors to survive. These are the suppliers of materials and services that  you need to run a business. The way that vendor companies usually work, is that they have a sales force that pulls you in.  You have to keep in mind that the salesmen work on commission.  By selling you products and services, they are able to pay their mortgage, buy their cars, put food in their babies’ bellies and buy their little princesses the latest Justin Bieber CD.  So, they are highly motivated to make the sale. Once you have purchased their product, they disappear.  Products and services are always over sold. They never perform to the level you were told and they ALWAYS cost more than you are told. What is worse than that, is that you then decide that you will not take the disappointment sitting down. So then you go to war with your vendors to get what you had paid for. You can only fight so many wars for so long and you become completely exhausted. So when a phone company says their system can do A-Z and cost $x, what they really mean is that their phone system can do A – E and cost $x+30%. If you later want F-Z, it will cost you $x+300%.  That’s just one example of hidden cost. I will give another example. I pay $500/month for billing software. My biller doesn’t like the software. I started a dialog with several companies. It was like entering shark infested water coated in blood.  The phones rang off the hook. We finally “test drove” a system that promised to cost us $300/month.  After wasting hours on it, in the end (through bait and switch) we found out it could not do nearly what we wanted then, through hidden fees, realized it would cost us over $600/ month.  But that was a lot of wasted energy and time. Positive Note: One of the things that was keeping me awake a year ago was my fear that there would not be enough patients to support practice. By hard work (connecting with our referral base) and giving our patients a good service, we have had plenty of demand.  Patients don’t seem to care who owns the practice or who sees them, if that provider is knowledgeable and compassionate. I will be back as I have patients coming in the door and I must go. That is another issue, giving up virtually all your free time in order to keep the ship afloat.

In some ways, we celebrated our first birthday on March 1st. It was our day of incorporation, the day I started paying rent and they day I was totally committed. We didn’t see our first patient until June 1st, however. That date will be another milestone. It was an interesting day. I had a meal with my old SPs. Hadn’t seen them since I left. We seem to be on good terms. They talked to me about the possibility of rejoining them with my new business. I can’t see it happening while I’m in debt. They also described how Group Health insurance had called them last year (as we were trying to contract with them) and wanted to know about me. Group Health expressed great fear about doing business with a PA. Finally I have the smoking gun, the proof that the reason they refused to do business with me is because I’m a PA. For the foreseeable future, we have a full schedule. We have a building “accounts receivable” meaning the money owed us. This week should see the valves opening and the money flowing once again. I see no major crises in the near future, however, a crises is never more than a certified letter or a phone call away. I’m poised to start paying off debt. I will start with corporate credit cards, then start repaying me for my personal loan to the company.  I dream of a day when I would be debt free. I’ve also noticed a new, better tribe of patients coming through my doors. I think it is because they have to wait longer to get in, and they have to come from a greater distance . . . they are therefore more motivated to get better. There is nothing I dislike more than patients who have no desire to get better but use every visit to argue with you.  I’ve had a week of wonderful patients, smart people who want so much to get better and whom I’m quite confident I can help.