Doctors doing business
Healthcare practioners must focus on more than healing

by Kate Nichols

The doctors at Northwest Orthopaedic Surgeons in Mount Vernon depend on staff members to provide expertise in business matters.

Doctors and other healthcare practitioners focus their schooling on healing and preventing illness. But in today’s world, doctors could easily justify a second degree in business.
From large multiphysician clinics to individual practices, doctors must manage day-to-day operations, tackle the ins and outs of insurance billing plus negotiate a myriad of rules surrounding Medcare and Medicaid.
What’s a busy doctor to do? More and more they rely on a team of assistants to support their practice, from office administrators to accountants. And they must ask and attempt to answer some tough questions about how their business functions in the marketplace.

Large-scale care faces large-scale issues
Dr. Erick Laine, CEO of Madrona Medical Group, made a difficult career choice to stop practicing clinical work and accept a leadership role in administration at Madrona. Now he is part of the heady debates about healthcare that increasingly go hand-in-hand with the business of healing.
Madrona Medical Group is a large physician-owned, multi-integrated medical facility in Whatcom County. By integrating their practices Madrona practitioners can provide high-quality primary and specialty care less expensively.
Today patients are consumers whose expectations for healthcare include affordability, quality and access, says Laine. As consumers pay a greater proportion of their healthcare insurance they are looking for quality healthcare they can afford.
“As a business professional there is no business rationale to do what we do (provide services for less than cost),” said Laine. “The economics of healthcare is just one view. It is a very complex issue.” Laine sees medicine as “science, art, economics, political, ethical and moral issues.”
Laine thinks the marketplace provides a good process – because it is “not how good we think we are – but how good the marketplace sees us, how good others see us.”
As a business, Madrona pays the state Business & Occupation taxes on the revenue they receive from patients. They need a profit margin sufficient to invest in healthcare innovations such as their state-of-the-art imaging center.

Practice requires business know-how
Although most physicians don’t have business training, often their staff does. Lori Nordgulen, at Northwest Orthopaedic Surgeons in Mount Vernon, graduated in 1993 with two graduate degrees from the University of Washington in Healthcare Administration and Business Administration. Nordgulen said only one of the 24 in her healthcare administration program was a physician learning the business end of medicine,
“Like in any management position, specific training in human resources, accounting and finance, marketing and business strategy are all helpful in making good business decisions,” Nordgulen said. “Exposure to leaders in healthcare – both local and national – expanded my perspective on the complex issues facing our political and business leaders in coming up with innovations in the health care delivery system.”
“Keeping abreast of changes and providing input on proposed changes is certainly part of our role,” said Nordgulen. “Through professional organizations … we learn of changes and are sometimes able to affect these changes by providing input before final rules are implemented.”
Dr. Eric Tkacsik, in private chiropractic practice at Mountain View Chiropractic Center in Bellingham’s Fairhaven district, worked at a thriving chiropractic firm in Lynnwood right after graduation to learn the business. After a year he and a former classmate set up practice. This December, after five years, his partner returned to Canada. Tkacsik decided he is ready to “run his own show.”
Unlike many businesses, he does not have an advertising budget to attract new patients, but believes that most people see a medical person by referrals because “it is easier to trust someone who someone else trusts.”
An accountant does the year-end taxes, but Tkacsik does the bookkeeping and quarterly taxes. He needs to see about 16 patients a day to pay for his overhead, which includes rent, staff salaries, utilities, paperwork for reimbursements, insurance company updates and reports. He works an average of five hours a week on paperwork. When he is on vacation, the office shuts down.
Tkacsik sees 40 patients a day on the average. He may need to spend only four or five minutes for maintenance on some patients, but up to 20 minutes for a re-evaluation. Tkacsik makes arrangements for payments and can afford to take five to eight people in crisis a year for free. “I love taking care of people,” he said.

Nurse practitioner learns business of medicine
When a girl or a woman walks into Birchwood Women’s Health office, she is greeted by a comfortable waiting room with quilts on the walls, a lending library and a cup of tea. Michele Ingram, RNC, ARNP, a nurse practitioner, started Birchwood Women’s Health four years ago. She wanted to provide accessible healthcare for women in a place where they would feel comfortable.
Ingram had worked in a big practice where “they managed my productivity.” She left and started her own practice so she would have the flexibility she needed for her family. She specializes in women’s healthcare and is board certified for obstetrics/gynecology, reproductive and infertility endocrinology, and as a menopause clinician.
“I don’t overbook or double-book so patients don’t have to wait,” said Ingram. “If a patient needs to talk; I will take the time to listen.” To increase her availability, patients even have her cell phone number, but “they don’t bother me,” she said. Her patients appreciate her care; many have been with her since 1993 when she started practicing.
Western Washington University’s Small Business Development Center and Northwest Women’s Business Center in Everett helped her develop a business plan to start her clinic. When commercial banks offered her loans with high interest, she got a loan to start her practice through Community Capital Development (CCD), a certified community development financial institution for Washington state’s underserved populations of women and minorities.
CCD has continued to offer business support and resources. Ingram took classes to learn QuickBooks and quarterly taxes. She has a full-time receptionist and a part-time medical assistant. Her husband, Dan Bennett, created her Web site to advertise her practice and to provide health information for girls and women.
When she wanted to diversify her revenue she invested in 3-D ultrasound technology. She also assists with surgeries at St. Joseph Hospital for additional income and to provide continuity of care for her patients who need surgery.
The business end of her practice frustrates Ingram because the accounts receivable aren’t predictable. Often she pays her costs up front, and then she waits up to three months for reimbursement; sometimes she “really works hard to get reimbursements from insurance companies.” It is easier for her to collect co-pays now that she has credit and debit machines.
She depends on word of mouth for new patients. “It’s expensive to advertise,” she said. “There are three phonebooks in Whatcom County, and they cost me about $4,000 a year to be in them.” Having said that, “I think it’s important to be in the phonebook.”

Getting paid
Healthcare providers are getting crunched with the expectation that they will help everyone with “top-shelf services,” according to Madrona’s Laine “without being reimbursed for their costs.”
Dealing with private insurers can be a financial minefield for doctors. Chiropractor Tkacsik said, when working with managed care, he may send a bill to an insurance company for $100 and get reimbursed for only $54 – along with a note explaining he didn’t need to give certain services.
“Because doctors are getting their reimbursements slashed they are increasing their rates, then insurance companies raise customer rates,” Tkacsik said. “It’s a vicious circle.”
Then there is the mire that’s become Medicare and Medicaid. The federal government doesn’t negotiate its fee reimbursements for these programs and compensates healthcare providers less than it costs to provide their services. Doctors lose money when they accept patients covered under these programs.
Another example: Nordgulen, from Northwest Orthopaedic Surgery, explained that if a health provider charges a $100 fee for a visit that costs the provider $50, a commercial insurance company negotiates with the provider to reimburse $52 for the service. Medicare may reimburse $25 and Medicaid $12. But the person with no insurance will pay $100. (Some providers will give a discount for cash payment at time of service, since there are no billing or collection costs.)

Nonprofit faces different challenges
The Interfaith Community Health Center in Bellingham started in 1982 by a coalition of local churches. Twenty-five years later, the health center is an independent nonprofit. Though it is not faith-based, the center continues to receive financial support from the coalition that started it, but must also find other sources of funding. The clinic is mission-driven, so the doors are open to everyone.
The Interfaith center is a federally qualified look-alike community health facility, which means most of the same federal regulations apply to the clinic and it receives enhanced reimbursements for Medicare and Medicaid, but it does not receive any federal funding. The enhanced reimbursements help pay for the costs of the uninsured, according to Art McCan, financial chief.
David Hughes, executive director, said the clinic has applied for federal funding five times, but has not received any. In May they will find out if they got a $650,000 federal grant.
The clinic does receive federal funding for the Ryan White HIV/AIDS Program, which offers primary healthcare for people in Whatcom and Skagit counties living with HIV/AIDS. Other monies to support the clinic are from donations and grants, a sliding fee for uninsured patients and commercial insurance patients.
Recently, the position of development director was added to focus on grants and additional programs. “Every dollar is access for someone,” said Hughes. Ironically, the center is unable to provide health insurance for employees’ families or retirement benefits.

Personal decisions
Most doctors have a calling to do their work, and the realities of doing business along with practicing medicine can be challenging.
Physicians are under pressure and expected to work 12- to 14-hour days, says Laine. He sees values changing in new physicians who are more protective of their lives. There is a disparity in what they can make here and in other places because so many low-income people are on Medicaid and retirees on Medicare. There are also “fewer doctors matriculated” and more physicians are leaving the profession.
Underscoring the tough issues that come with running a healthcare business is the story of one doctor who decided she wanted to focus on healing and made the bold move of transitioning from private practice to a community clinic.
Dr. Janine Shaw went to work for Interfaith Community Health Center, where she could be an employee after feeling overburdened by the business aspect of medicine. She chose to leave private practice, even though she enjoyed her partners and her patients.
“I still have to think about costs,” Shaw said of working at Interfaith, “but there is staff to focus on the administrative part, apply for grants, raise funds.”
She prefers working at the center because she “likes to see all people regardless of health insurance.” It is a relief to her that the business side is “not my full responsibility.”
Shaw, who has worked at the center for four years, says it comes down to focusing on what she does best. “Clinical work is what I love.”
Nordgulen of Northwest Orthopaedic sums up the dilemma faced by healthcare providers. “I think that the healthcare industry in the United States is somewhat chaotic. Operating a business in this environment is challenging as we try to navigate our way through the complexity, keeping patients as our primary focus – while at the same time keeping finances on the radar screen in order to keep our doors open.”

Nurse practitioner Michele Ingram started Birchwood Women’s Health after leaving a larger practice that, she said, “managed my productivity.”




Lauren Dickinson, chiropractic assistant, and Dr. Eric Tkacsik work at Mountain View Chiropractic Center in Bellingham. Dickinson also works as a receptionist.