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How Neurologists in Private Practice Cope with Challenging Economic Conditions

Article In Brief

While running a private neurology practice has its benefits, inflation, reimbursement changes, and staffing shortages have made recent years a challenge. Neurologists in community-based practices share the choices they have had to make.

With the annual rate of inflation topping 7 percent and workers hard to come by, private-practice neurologists are trying to stay one step ahead in a challenging health care environment that shows no sign of getting easier.

From elevated costs for supplies and drugs to job posts that get lukewarm responses, neurologists and neurology practice managers told Neurology Today they are rethinking their business strategies while still appreciating the benefits they believe come from being part of a private medical practice. Anticipated reimbursement cuts from Medicare for 2023 won't help either, they said.

“We're (financially) tighter than we've been in a long time,” said Brad Klein, MD, FAAN, chief financial officer for Abington Neurological Associates, a large practice in suburban Philadelphia. At the same time, his staff are working harder than ever to keep the office and patients flowing.

“It's this hamster wheel,” he said. “It just doesn't seem to end.”

Neurology Today spoke with Dr. Klein and three others in private-practice neurology about how they cope with high costs, a tight job market, and nagging fallouts from the COVID-19 pandemic. It's not all doom and gloom, they said, noting some silver linings do exist.

The Big Picture

As chief executive officer for Raleigh Neurology Associates, a large, mostly private practice with 52 providers, Leeann Garms strives to recognize that just about everyone is hurting in some way or another in these times of high inflation. Some of her staff cannot afford to live in the immediate Raleigh metro area, she noted, which means they endure longer and more expensive commutes.

“Inflation, gas, and housing prices have made it more and more difficult for our team members,” Garms said, and workers also want to maintain flexibility in their work schedules coming out the pandemic.

“We are really trying to understand that and support our team members while also supporting our members (partner physicians),” she said.

The practice, which has about 330 staff members, invested in technology that allows for more hybrid work—a switch that cost money. For instance, a laptop computer for a working-from-home employee typically costs more than a desktop model. Adding more security for their online work was another expense.

Garms said salaries for medical assistants have increased about 7 to 10 percent, and when it comes to nurses, it's hard for a private practice to stay competitive when some hospitals and travel nursing companies offer signing bonuses of $5,000 or more.

Garms said it's also important as providers to recognize that many patients are trying to make ends meet.

“Patients' discretionary income is being challenged in more ways than we know. When patients have less income to spend on things like health care, they have to make some tough choices,” she said. She has noticed more outstanding patient balances as the year comes to an end.

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“We're (financially) tighter than we've been in a long time.”—DR. BRAD KLEIN

Garms is quick to point out the silver linings to the downsides of the past few years. Rising costs and staffing issues have forced the practice to be more efficient and enhancing its technology can benefit the practice in the long run. She said there is much untapped potential in telehealth, including remote monitoring of patients.

Garms also believes it does no good for health care providers to adopt a “woe is me” position. Her colleagues in the academic world are experiencing the same things, she said.

Garms called Raleigh a dynamic area and noted the practice has hired six physicians in the past year and a half. “Fortunately, we live in an area where people want to live or move to,” she said.

“We have a nice business model, and we have a solid business,” Garms added. Now, she said, its goal must be to embrace “a quicker pace of change.”

Planning Tougher

Donald Shook, chief executive officer of Allied Physicians Inc. in Fort Wayne, IN, said the unpredictable times make it harder to make long-term business plans.

“We used to do strategic planning for five years, and now it's two years,” he said. The practice sees shrinking profit margins amid inflation, though overall revenue has increased since the peak of the pandemic.

He said the practice's neurologists have salaries that trend toward the 25th percentile nationwide. According to the Medical Group Management Association, which tracks physician and medical practice compensation, neurologists in the 25th percentile earned roughly $250,000 in 2021, while physicians in the 50th percentile earned about $337,000, and those in the top 75th percentile brought in over $400,000.

Shook said his pitch to prospective hires stresses not only pay but also lifestyle. For instance, in private practice neurology, doctors do not stay “on call” like they would in a hospital. At the same time, private practice is an environment where “the more you work, the more you take home,” he said.

“The one thing private practices can offer is autonomy,” Shook said. “We always stress that this is a career here with us. We expect that you will come to work with us, and you will retire with us.”

Collegiality is another draw. “You can walk down the hall and ask a question,” Shook said. “We are family-oriented. If some days you have to get out a little early, somebody will pick up where you left off.”

Seeking New Passions

Belinda Savage-Edwards, MD, a headache specialist, has been in private practice in Huntsville, AL, for 19 years. She shares her office with her husband, a physiatrist who specializes in interventional pain management, and they see about 650 patients a month.

“We're just like everybody else trying to run a business,” Dr. Savage-Edwards said. “Inflation keeps going up, as well as the cost of goods and services, but unfortunately reimbursement keeps going down.”

Dr. Savage-Edwards said employee salaries make up the majority of her practice's overhead and she has seen a tremendous rise in the wages of all levels of employees. She says that what was once a $12-an-hour salary for a starting receptionist with little to no experience, now is $16/hr. This is also true for her additional ancillary staff which includes two nurse practitioners, a physician's assistant and a physical therapist.

As a headache specialist, Dr. Savage-Edwards gives Botox injections for chronic migraine, and associated costs for the medication, syringes, needles and other supplies have increased. She said her office manager works tirelessly to find drugs and supplies at the best price possible, which takes up valuable time that can be used to fulfill other managerial duties. Further, as a result of the increased requirement by insurers to obtain pre-authorization for certain medications and pre-certifications for office procedures, she has had to hire additional staff to satisfy this role.

Dr. Savage-Edwards said the fact that she shares office overhead with her physiatrist husband helps keep her practice financially viable. If it were not for his added revenue from performing invasive procedures, she does not believe she could remain in private practice. However, she said she has made some adjustments to increase revenue on her side which includes working smarter and not harder.

Dr. Savage-Edwards said her office now participates in several industry-led clinical trials. In addition, she serves on speaker bureaus for new headache therapies and sits on advisory boards for industry, including Impel Pharmaceutical and Eli Lilly, Inc, she said. She also serves on several committees and sub-committees of the AAN, including the Practice Management and Technology Committee, as well as the Informatics and Wellness Subcommittees.

“I am actually grateful for the challenges that I have encountered which have led to the varied roles that have afforded me the opportunity to bring additional income to our practice. My journey was not planned, but it allowed me to find my passion,” she said.

Dr. Savage-Edwards said that before she made such changes to her work life, she was on the brink of professional burnout as her patient load continued to expand and left little time for personal growth. Now, she said that she feels renewed as she follows the advice she often gives to others, which is to stop: “Slow down. Take a deep breath. Observe what's going on around me and inside of me, then proceed.”

Looking Forward

Dr. Klein said the ever-increasing price of drugs challenges a private neurology office like his, where infusions can involve drugs that cost tens of thousands of dollars per dose. The office has to outlay money to have the drugs on hand and then wait for reimbursement from insurers. He said the office manager tries not to over-order drugs to keep that gap as narrow as possible.

With the job market so tight, recruiting has become an almost continual process, since workers sometimes are hard to find and hires may be quick to leave for what they consider to be a more flexible opportunity. While an attractive-sounding option, remote work still has to meet the needs of the practice in the end.

Dr. Klein said his physician workforce is very steady, however, making it a testament to what he believes is an “environment that is super attractive. We pitch a lifestyle that many practices can't offer.”

And his office has a new neurologist, fresh out of training, coming in the new year.

“I love the excitement of a new set of eyes coming to our practice,” he said. “To me, it always brings more energy to everybody.”