The Squeeze on Physician Incomes

This is from a recent post to one of the MGMA listservs:

Due to many reasons we will be laying off/terminating approximately 20% of our staff. The management team can't agree on the method that will be used. We have been open and informative about the prospective changes, without any specific details. We will be using May 1 as our target date, BUT since we've never done this before we are seeking input from other offices.

We could proceed with a compassionate and humanitarian side; inform those that are leaving about six weeks in advance. Give them letters of reference, and accommodate interviews, etc. We can figure up what is due to them, and on their last day let them know that this is it. We have examined the pros and cons of each method, but don't know how to proceed. Any suggestions are welcome.

Layoffs and staff reductions are becoming commonplace in physician practices.....I wonder what it will take for physicians to wake up and do the things necessary to build back their desired practice net income. Unfortunately, cutting payroll costs is only a short term solution and in many cases, worsens the bottom line and doesn't help it.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.