I recently attended a meeting where I heard an interesting lecture by a Dr. Edward White, a urologist from New Jersey. After calculating a conversion factor analysis of different procedure codes by managed care companies, he found that he was barely making money on those contracts – so he decided to drop all of his managed care contracts. That’s right – he is only taking Medicare.

While he experienced about a 25% decrease in patient volume, his overhead has actually decreased – in part because he no longer needs the same amount of staff to handle all the paperwork, phone calls, etc. He also says he is working less, spending more time with his family, and actually enjoying his work again. He has since been helping other practices do an analysis of their managed care plans.

He reports on one practice where the majority partner had to put in about $100,000 of his own money at the end of the year just to float his practice. After they looked at his total revenue and practice RVUs, they found that it was actually costing him money to see patients on his managed care contracts (see explanation for calculating your practice RVUs at Flex Your RVUs ).

We’ll keep posted to see what happens with this particular practice…