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A big-picture approach to adding ancillary services is necessary for success

By Chris Harrop
November 9, 2017
Body of Knowledge Domain(s): Operations Management

Physician practices face a variety of factors — patient demands, staffing, reimbursement and the existing healthcare market — when leaders sit down to consider the addition of ancillary services. Those variables constitute a big piece of answering the range of questions that must be addressed in evaluating how new services fit into the practice’s business model.

A Nov. 7 MGMA Stat poll with 856 applicable responses found that 48% of respondents added ancillary services in the past year: 16% said they did it primarily to increase revenue, 7% said it was driven by patient care, while 25% said both clinical and business considerations led them to add services. Most respondents (52%) said they did not add ancillary services to their practice in the past year, though 14% of those respondents noted they plan to add ancillary services in the next year, 56% said they had no such plans and another 30% were unsure.

Common responses from MGMA Stat users who did add ancillary services in the past year included aesthetic/cosmetic services, laboratory services, various types of imaging, chronic care management services, physical therapy and mental or behavioral health services.  

Valora Gurganious, MBA, CHBC, partner and senior management consultant, Doctors Management LLC, Nashville, Tenn., said that balancing those impulses for adding new services is important, especially for practice leaders courted by companies promoting new equipment or service lines that promise to inexpensively drive revenue and improve patient care.

“Do your homework,” Gurganious says. “If you’re going to make the decision to add an ancillary service, you first have to look at the big picture and make sure this new service line fits with your current strategy … Does it fit within your patient population?”

Understanding the competitive environment for a given service is also very important in the planning phase. For example, elective cosmetics likely will have competition from dermatology and gynecology specialists within a market, as well as any number of other providers in a community.

Regardless of the specialty service — whether it’s mobile mammography for OB/GYN clinics or nerve conduction studies or electromyography for orthopedics, for example — Gurganious said practices “still need to get back to what’s the fair market value for those services, are they reimbursable or not, [and] are they going to be compliant or not if they incorporate those into the practice.

“You really have to take a big, macro view of how this service will fit long term,” Gurganious said. “It really should be a big-picture decision and not one just based on what seems like a quick buck, because it really won’t be sustainable. There are so many moving parts in this new environment.”

For practices that do their due diligence and then opt to incorporate a new ancillary service, part of the planning must also include a strategy for marketing it to current patients and the community.

“If no one knows that you offer it, it’s not worth having,” Gurganious says.

And if adding ancillary services is not the prudent choice for a practice, Gurganious recommends that practice leaders keep in mind the myriad ways they can modify the existing practice to optimize revenues, including:

  • Extending hours, especially Saturday mornings and evenings
  • Adding a nonphysician provider to take on more work
  • Adding telehealth service to drive patient access

Regardless of the choice of service addition or practice modification, Gurganious recommends finding revenue generators that are a good fit for the existing practice and its mission that distinguishes the organization from the other providers in the community.

Learn more

Valora Gurganious, MBA, CHBC, partner and senior management consultant, Doctors Management LLC, Nashville, Tenn., will explore more factors to consider when determining if adding additional services is right for your practice and what additional services make sense during her session at the MGMA 2018 Excellence in Performance Operations Conference, April 22-24, 2018, at Pointe Hilton Tapatio Cliffs Resort, Phoenix.

Chris Harrop, senior editorial manager, Publications, MGMA

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