Is there a doctor in the house?
Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Medscape Medical News in an article—by Lisa Mulcahy, “Inflation and Healthcare: the Prognosis for Doctors”—regarding inflation’s impact on a doctor’s practice and the cost of healthcare, as well as the seven steps a physician can take to temper inflation’s effects.
Below are the excerpted quotes:
Step 1: Maintain Operational Standards
“Based on the conversations we’ve had with our physician clients that own practices, we see the potential for cost inflation to outrun revenue inflation over the next year,” says Michael Ashley Schulman, CFA, partner and chief investment officer at Running Point Capital in El Segundo, California. “Staff wages, as well as office equipment and medical supply costs, are increasing faster than insurance and Medicare/Medicaid reimbursement amounts.”
Step 4: Revisit Vendor Relationships
Be proactive. “Test new medical suppliers,” Schulman advises. “Reread equipment leasing contracts to check if the interest rates have increased. See if buyout, prepay, or refinancing options are more economical. Also, investigate [bringing down] your rental expense by reducing square footage or moving to a lower-cost location.”
Step 6: Be Poised to Pivot
Get creative. “To minimize a profit decline, use video consulting — it’s more efficient and less equipment-intensive,” Schulman says. “Look at how remote work and flexible hours can maximize the work your practice accomplishes while cutting office costs.”
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-22-40