Medical Spending in Community Practices


Josh Weitz, MD, discusses how to balance cost-savings and efficiency while maximizing patient satisfaction in his medical practice.

In an interview with Targeted OncologyTM, Josh Weitz, MD, chief executive officer and clinical director at Dermatology Associates of Rochester, discusses the increasing challenges of managing a medical practice due to rising costs and decreasing reimbursements. Weitz highlights the decreasing reimbursements from insurance carriers for medical procedures, creating a situation where the cost to provide services is rising while the revenue generated is falling.

Despite these challenges, Weitz emphasizes that community practices remains committed to doing the right thing for patients and minimizing harm. In his practice, Weitz prioritizes reducing costs through enhanced efficiencies.


0:09 | One of the things that we've experienced over the last decade is an increase in the costs of essentially everything we buy. Once upon a time, we [used] paper charts, and we had to switch to electronic record systems. Well, paper charts might have cost us $30,000, $40,000, a year. Electronic record system [cost] $250,000. So that's a massive increase in costs.

[And] materials. So as we buy supplies, [the] cost of supplies goes up almost every year. And because we're a practice that's both medical, surgical, as well as cosmetic, we end up seeing a decrease in reimbursement on the medical side from the insurance carriers almost every year.

0:50 | So we have kind of these diverging cost structures. The cost to acquire has increased. The cost returned to us in exchange for services has decreased. And so it has been it has been impactful. It's been challenging. Within our practice, we have a big focus on efficiency, and waste reduction. With us, it's like everything counts, every piece of gauze counts, every glove counts, right? Not only do we not want to be damaging the environment and filling up landfills unnecessarily with medical waste, but we also want to be cognizant that there is a cost associated to everything we do.

1:29 | Similarly, we want to maximize the efficiency of the experience for the client or the patient. So as the patient comes in, we don't want them to be waiting forever to be seen. We want them to be seen on time, we want their problems to be heard and addressed promptly. And we want to be able to move on to the next patient in a timely manner, to allow us to minimize any of the gaps in time that can impact both the wait time for the clients for the patients, but also impact profitability to the practice.

2:01 | Because we're kind of like that Amazon flywheel model where we have to operate on fixed costs or reducing costs. And the only way to either, you know, overcome that barrier is increase the revenue that you're generating or decrease your overhead. And as most of us who run businesses know, the biggest contributor to overhead is human capital, and the team, we are in a growth mindset. So we don't want to have to do that.

Working with companies like Grapevine—so Grapevine Technologies is a provider of medical supplies or basically an online, go-to source for us where we can kind of house all of our ordering processes. That's saving money. [At the] same time, it's saving us some money on supplies, which is great. But the team time savings is also great. Because as we know, every second counts.

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