I’ve always found the history of words to be fascinating, particularly the evolution of meaning over time. Since our son is a junior in college, we get to witness the emergence of new words into the language in real time. I have come to learn that ‘dope’ is a good thing, as in ‘that is dope.’ He does go to school in Boulder, so it is comforting that dope is just an adjective.
No one does more to advance new words entering the lexicon than business consultants. Often, these are just exercises in self-aggrandizement, 25-cent words that add no value. I’m sorry, but if you have mop up vomit, calling you a ‘custodial engineer’ doesn’t make your job less smelly.
However, sometimes new words are required because the thing that was is now different enough, even though it looks familiar, for there to be a real distinction. When we talk about the need for independent physician practices to become a ‘platform’ is that just some faddish marketing spin, or is it really something different?
Fair enough. We’ll explore it in the coming weeks and you be the judge.
A central tenet of the platform concept is the ability to leverage the flow of patients capture new and multiple sources of revenue. Think about the big health system…they want to make money off patients in every conceivable way possible.
For a long time now, we’ve talked about the importance of ancillary revenue streams to a physician practice. Those who can and do develop revenue sources that compliment the traditional professional service fees of the practice tend to perform better financially. Increasingly, the presence or absence of these other services also predict whether there is a path to continuing independence.
It is no surprise that primary care physicians are employed by hospitals and health systems more often than are specialists. Besides generally getting paid less for their services, ancillary services that provide material revenue are not as easy to come by for internists, pediatricians and family medicine physicians. Though, as we’ll discuss in a coming post, the move to value-based care has opened a new source of revenue for which primary care providers are well suited.
So yes, physician practices that wish to remain independent must become a care delivery platform. Generating various sources of revenue from the same universe of patients is one feature of the platform idea. As reimbursement continues to compress and labor costs do what labor costs do year over year, the margin left over from pro fees alone is ‘not dope.’ You now must think about this part – what you used to consider the essence of your practice – as merely the headwaters of your river. Monetizing more and more of what flows from your core service is how you will remain independent.
Revenue streams are just one aspect of the platform idea. We’ll discuss others as we work through this this series on this concept. Next up…a couple of warnings.