Inflation is affecting many businesses, but medical practices tend to see the brunt of its effects because of the way payment structures are dictated by insurance payers. Even more worrisome, practices have had to increase wages significantly and the current job market tends to favor employees. In some instances, employees are asking for wages 20-30% higher than previous, and understandably can command these wages as there is fierce competition for skilled employees. While these issues are affecting many businesses, there are things medical practices can do to help ease the squeezing margins.
I am often told by clients that they don’t feel that they have any leverage when dealing with insurance payers to get better rates. The reality is that every practice has a certain amount of leverage when dealing with the insurance payers at the negotiation table. Even a smaller practice can certainly find ways to argue for better rates. In fact, small groups have an even better opportunity than they realize simply due to the fact that insurance payers don’t want to see consolidation or see you join another group.