Based on my observation, experience, research and interviews in both the allopathic and integrative space, I have written a 3-part series highlighting the major trends that are occurring.
Each individual practitioner cannot compete in the current market climate in the integrative health space even with a full-fledged degree. Top line pressure from insurance companies are driving up premiums and the only way to reverse engineer that is to increase the cost and price of illnesses which means resorting to investing more in costly devices than human practitioners.
We are seeing a significant number of hospitals and hospital groups utilizing doctors and other trained staff as independent contractors with a flat rate shift pay and there is increasing pressure to move away from a doctor owned and operated facility to a Private Equity/Real Estate owned facility that outsources all the duties. It does make a lot of sense. Let the money and real estate people handle the money and real estate.
But we are seeing compensation from doctor’s stagnating especially in terms of “take home dollars.” And so where is the increase in premiums going to come from if not the practitioners? The clear opportunity to raise the cost of treatment (and thereby the premiums and capital the insurance companies are able to collect and play with) is through expensive biotech and PPE investments. This is further reinforced by the standards of care that are being dictated to make machines more realistic in favor of the less error prone machine’s doing the work over humans. This is coupled with the increased demand for skilled doctors while the graduation rates for these practitioners are flat. There is downward movement to enable “lesser” skilled people perform the procedures like PAs and NPs. While this plugs one hole in the boat for now, it further amplifies the cost savings for the hospital and does not pass on the proportionate upside to the doctors.
The decision makers for these expensive machines are removed from the actual delivering of client care experience and therefore do not have a full grasp on the implications of their purchasing decisions which makes for misaligned care incentives. While operations management may be a great skill taught in school and applied very well to widgets, there are certain nuances to the human that makes it necessary for real-life experience to paint the nuances of the problem. The ultimate conclusion on this path from those without the colorful pallet of client experience is to minimize healthcare practitioners to a minimum with the goal to do so entirely. The advances in robotics and AI will continue to excel in areas where scanning and operations are prevalent while the instance on adhering to an evermore rigid standard of care makes automation that much easier.
For major treatments and surgeries this is a solid strategy for additional revenue generation and profit margins. There is a predictable number of people who will come in based on their diet, lifestyle, and genetics for each type of procedure and that can be modeled with key levers pulled in case there is a need for additional clients.
The challenge is observed not only in the complex treatments but rather by the numerous patients flooding the emergency room who come in with “ailments” that is remedied not by the excessive amount of pain killers but simply by a caring person’s love and sympathy or a stern reminder that we are in fact resilient people who can overcome minor aches and pains. The desire to be seen, heard, cared for. Unfortunately, the environment is for life threatening emergencies as viewed by the medical industry and not by one’s own psyche. And so when faced with the need to administer a hug to one patient or Heparin to another, there’s a clear answer.
Many of these cases which clog up the operations of the emergency room and practitioner time could simply be remedied by the magical act of a person kissing the boo-boo and saying it’s better or hugging it out or giving a popsicle and sticker. These approaches I do not mean solely for people of the child age group, but for many of the emerging young adults in their 20’s and 30’s. With the continuous remarkable impact of the placebo effect, there is a need for that in these situations.
So while there are increasing number of cases, some of which not applicable to the hospital environment, increasing pressure of efficiency, a stagnant growth in new doctors, and constant chipping away of robotic-like standards of care, what is an allopathic practitioner supposed to do?
Further, the allopathic practitioner has a nearly insurmountable amount of debt accumulated throughout the course of the training and education period. So while we on the outside view the several hundred thousand dollar compensation as enviable, when a majority of that goes to repay the debt that’s been accumulating for almost a decade, it becomes far less enviable. Couple that with the average age once done with the training and licensing period and the practitioner will be primed (if not already) to be in a marital commitment with impending offspring, a household pet, and/or the idealized home with its mortgage, the practitioner faces a daunting cash flow suck right for the start.
Coupled with a fairly capped earning potential for the doctor puts him/her in a position of disempowerment to control his/her ability to dictate earnings despite having the highest level of “education.” Simply put, he/she is trapped in a cycle that is perpetuated by the interplay between insurance, hospitals and the money management industry with no time or ability to understand the role of money, personal finances and responsibility until far later in life. In this situation, the magical power of compounding interest works against you.
The upside though is the potentially endless supply of customers, steady revenue generation, and ability to intensely focus solely on the delivery of the practice.
Continue to part 2 click here