“Physician practices continue to be under significant financial stress due to reductions in patient volume and revenue, in addition to higher expenses for supplies that are scarce for some physicians. More economic relief is needed now from Congress as some medical practices contemplate the brink of viability, particularly smaller practices that are facing a difficult road to recovery.” AMA President Susan Bailey MD
Table Of Content:
- It’s not all Covid’s fault
- It all starts with the marketing fundamentals
- Going beyond marketing basics using Artificial Intelligence
- The future of using AI-driven technologies for physician practice marketing
Covid has crushed the healthcare industry. Some of this can be attributed to medical practices holding off on elective procedures. A study put out by the AMA indicates that in-person visits fell by 41 percent for those that provided 20 plus hours of care per week. In addition, the industry is seeing an average of 32 percent decline in revenue:
It’s not all Covid’s fault
The subject of declining physician incomes and lackluster bottom lines have been plaguing doctors for more than a decade. Though it varies by specialty and employment, independent physicians typically receive a base salary and bonuses for hitting productivity benchmarks. In addition, some providers offer non-medical services such as botox, chemical peels, microneedling, etc to supplement their income. Though physicians make more than your average citizen, they are under increased pressure to earn more. A number of reasons for this troubling trend include:
Low reimbursement rates: It is no secret that reimbursement rates are declining and not keeping up with inflation. According to a Medical Group Management Association (MGMA) poll, over 67 percent of practices aren’t able to cover expenses of delivering care to their patients with Medicare reimbursements.
High cost of medical school: A study put out by the Association of American Medical Colleges (AAMC) indicates that median debt for graduates in 2019 is $200,000. This, along with increasing malpractice rates and labor costs can present formidable challenges for recent grads and seasoned physicians trying to run a profitable practice.
Patient attrition: Advisory Board, a think-tank research firm released a primary care consumer preferences report that indicates that 20 percent of patients use an alternate site for their primary care needs. Many are foregoing traditional doctor visits for convenience and on-demand access.
The practice of medicine has changed dramatically over the last decade. What worked in the past to drive revenue may not work now. Physicians have to adapt and overcome the change as digital transformation is happening faster than ever, particularly in times of Covid and rising labor costs.
It all starts with the marketing fundamentals
Private practice physicians have to balance between practicing medicine and being an entrepreneur. Healthcare protocols are constantly changing. As a result of increasing governmental regulations, the industry is seeing a move from fee for service to value-based care models. Regardless of where one stands on this issue, both will require a constant influx of new patients and better ways to engage existing patients through omni-channel marketing practices to make your practice profitable.
A study put out by Bain shows that a 5 percent improvement in customer retention can result in 25-95 percent improvement in profitability. Basic marketing activities that doctors use to drive repeat business in this digital age can include:
- Building your website
- Being active on social media
- Getting involved in your community
- Implementing email and text marketing
Implementing basic marketing protocols are great and serve as building blocks for future growth. Similarly, your path to becoming a doctor started in high school by mastering the basics of math and science. You likely excelled there and proceeded to do the same thing in your undergrad before heading to med school. The competition only increased with others of similar ability and now continues with your private practice.
Eventually, everyone catches up and all are using the same, basic marketing activities listed. Now, as a private practice physician, what can you do to distinguish yourself from the field in an ever changing industry?
Going beyond marketing basics using Artificial Intelligence
In their book Competing In The Age of AI, Marco Iansiti and Karim Lakhani state, “Every organization should get to work now to digitize and structure its processes, systems, and capabilities to accelerate operational scale, scope, and learning. There is no longer any rationale for waiting. It doesn’t matter if your organization is new or old. Ultimately if the virus doesn’t get you, your competitors will.”
The opportunity for AI applications in healthcare is massive – from the simple (marketing) to the complex (radiology) and everywhere in between. In the marketing world, AI can analyze your patients’ persona and purchase pattern data to:
- Score your patients on their potential demand for care or profitability.
- Segment your patients into distinct groups that share similar characteristics
- Personalize recommendations based on past behavior.
- Identify the services that are likely to be most valuable to the patients.
Just like a doctor who must first diagnose their patient before recommending treatment, the same thing must be done with your marketing. Once you have diagnosed your patients’ persona and demand for care/profitability index, then you can execute data driven marketing campaigns intended to target the right patient, with the right service or product, at the right time. This can lead to improvements in both top and bottom line growth – helping your practice become competitive in a data driven world with marketing precision using AI.
The future of using AI-driven technologies for physician practice marketing
Running a privately owned physician practice (especially now) presents challenges with improving patient experience, data and analytics integration, pricing transparency and many others. Now there’s a trend of doctors foregoing accepting insurance and going with a cash based model. Regardless of what you do, you’ll need patients to make your practice survive and thrive.
Malcom Gladwell writes in his book The Tipping Point, “the Innovators and Early Adopters – are visionaries. They want revolutionary change, something that sets them apart from their competitors.”
Covid, digital transformation, and rising labor costs have accelerated the use of AI. It has been said that nice to have technologies that were slated for 3-4 years out are being implemented now. Ask yourself, where do you want your practice to be in today’s competitive healthcare world?