Q&A: Is capitation the right call? - - ModernMedicine

Q&A: Is capitation the right call?
Publish date: Jan 8, 2010
By:  Keith Borglum, CHBC
Source: Medical Economics


Keith Borglum, CHBC
Q: I am within two to three years of retirement and am wondering whether I should accept some managed care capitated plans to make my practice bigger and more valuable for sale to a buyer, even though it might be extra work for me. What is your opinion?

A: Practice value primarily comes from the income available to a buyer above what he or she could earn in simple employment (referred to as "dividends"), without risking savings or a loan to make a purchase. That's the money that would be used to pay off the loan and provide a return on investment.

The easier way for you to increase value may be to add an employed midlevel provider or two or some ancillary services that would increase dividends without increasing your personal workload or hours. For example, increasing your hours from 30 to 40 per week has no effect on value, but making the same money in 20 hours has a positive effect.

Also, capitated plans often are not transferable or salable. Bringing in an associate as soon as possible, with a two- to three-year graduated compensation plan, might earn you as much as a sale by way of profits, and recruitment often can take up to a year or two.








Medical Economics Consultant Keith Borglum, CHBC (left), of Professional Management and Marketing, has been a licensed practice broker, appraiser, author, and management consultant to physicians for more than 25 years, is based in Santa Rosa, California, and practices nationally. Send your practice management questions to mepractice@advanstar.com
.

post a comment
Please complete the form below to post your comment.
Bold = Required
Email Address Your email address will NOT be published.
Display Name appears with your comment
City
State
Country
Remember me: YesNo
Comment read our privacy policy
Note: does not support HTML
All comments submitted are subject to review and may be delayed before posting. We reserve the right not to post comments. Comments from patients or members of patients' families seeking medical advice will not be posted.
eSamples check closet
eSamples check closet
Featured Jobs

More Jobs

Practice ToolsPractice Tools
Coding Counselor
Coding Counselor

Simple and accurate ICD-9 code search. Start Here

Patient Education
Patient Education

Print customized patient education handouts. Start Here

Dermatology Diagnosis
Dermatology Diagnosis

Identify skin diseases by age, gender, location. Start Here

AHRQ Clinical Guidelines
AHRQ Clinical Guidelines

Objective findings on medical interventions. Start Here

Clinical Perspectives
AcneAdolescent MedicineAllergy & ImmunologyAlzheimer's DiseaseAsthmaBPHBreast CancerCardiologyCataractsChild Behavior & DevelopmentClinical PharmacologyContraceptionCorneal DiseaseCosmetic DermatologyCosmetic SurgeryDepressionDermatologyDiabetesDry EyeEczema/Atopic DermatitisEndocrinologyEpilepsyErectile DysfunctionGastroenterologyGastroesophageal Reflux Disease (GERD) & Acid Peptic DiseaseGeriatricsGlaucomaGynecologic OncologyHIV/AIDSHormone TherapyHyperlipidemiaHypertensionImmunization/VaccinesInfectious DiseaseInternal MedicineIrritable Bowel Syndrome (IBS)Kidney & Bladder CancerLaser & Light Technology in DermatologyMaternal & Fetal MedicineMenopauseMigraineMultiple SclerosisNeurologyNutritionOb/Gyn SurgeryObesity OB/GYN & Women's HealthOncologyOphthalmologyOptometryOrthopedicsOsteoporosisParkinson's DiseasePathologyPediatricsPrimary Care MedicineProstate CancerPsoriasisPsychiatry & Behavioral HealthRadiologyRefractive SurgeryReproductive Endocrinology/InfertilityRetinal DiseaseRheumatoid ArthritisSkin CancerSleep DisordersSmoking-Related IllnessStrokeSurgeryUrinary Incontinence/Overactive BladderUrologic SurgeryUrology
Business Perspectives
Coding CounselorLiability & Risk ManagementHealth Care Information TechnologyPractice ManagementBusiness OperationsHuman ResourcesHealth Law & PolicyManaged CarePersonal FinanceProducts
Popular Topics
CME/CECoding CounselorEczema: Emollients, Counseling, and CareFind Resources to Help Manage Plaque Psoriasis Effectively [SPONSORED]Oral Anticoagulation in Atrial FibrillationEHR Technology eNewslettersGERD Resources for Your Practice and Patients [SPONSORED]Find Resources to Help Inform Patients on Managing Their IOP [SPONSORED]Find Resources to Help with Cataract Procedures [SPONSORED]Learn about Wavefront Technology in Progressive Lenses [SPONSORED]Help Prevent SREs in Your Patients with Bone Metastases [SPONSORED]Rx Adherence ToolAHA 2010 Video ReportsSurgery as Early Intervention in Morbid ObesityPatient Education CenterFracture Risk in Postmenopausal WomenBlogsSpecial Reports from The National Center for Children in Poverty (NCCP) DiscussionsModernMedicine RadioClinical Reference ManualsSyndicationSurgical Video Center


Source: Medical Economics, 1/8/2010
Click here