Take a deep breath, step back and be pro-active in your response. Here are 12 suggestions to help you cope and survive — and thrive — in any economic environment.
1. Understand Your Current Financial Picture
Review your current financials and other historical information about your practice so you know where you stand. As Albert Einstein once said, “The formulation of a problem is far more essential than its solution.” Look at the balance sheet, operating statements and cash flow to determine exactly where you are right now. How does your current financial situation compare with the way it looked last month and last year at this time? Does patient zip code information indicate that you are gaining or losing business in certain communities? Does information on referrals tell you that individual physicians and/or specific groups are sending less business your way than they previously did? When you look at standard ratios such as average days in accounts receivable or percentage of net revenue that you actually collect, what do you see? What about your denial rate? Can you detect problems with particular health plans that might be correctable by more diligent attention to data input and coding? And what about no shows? In the best of times, most practices struggle to minimize these numbers.
2. Look at Leading as well as Historical Indicators
Kevin Bassett, CPA, owner of Bassett & Associates, CPA, in Raleigh, NC, encourages physicians to look at indicators that will project future revenue as well as at historical information. Leading indicators include gross charges, realization percentage of patients seen (versus patients scheduled), qualified consultations, and number of appointments scheduled in the next 2 weeks.
3. Assess Your Work Flow
It’s important to determine if operational problems are negatively affecting patient access to your practice. If yours is like many practices, you rarely step back and look objectively at your work flow. Make sure you identify and fix operational problems that may have a detrimental impact on patient access and/or patient satisfaction. Here’s an example from a large dermatology practice in Virginia.
The eight partners met regularly to review their financials, and they were extremely concerned about the dramatic decrease in the number of new patients coming to the practice and about the rapid escalation of their accounts receivable (AR). At first they blamed both problems on the economy, but an external consultant suggested that they dig more deeply into possible underlying causes. The front desk staff explained that many potential new patients called for information but did not follow up by making appointments. The practice re-contacted people who had made an initial call but decided not to make an appointment. The telephone system, not the economy, was the barrier to patient growth!
With respect to the rise in AR, upon further investigation, the cause for the problem became apparent. The billing staff was short a person due to illness, and the practice manager was reluctant to fill the position with a new employee or hire a temporary person to perform this important task. As a result, the billing staff had no time to work the denials. If there were problems with claims submission that might have been fixed, nobody in the practice knew it and nobody took corrective action.
4. Make Sure Internal Controls are in Place
Internal controls help protect your cash and detect and prevent fraud. Deter fraud and embezzlement by separating duties among your staff. Your CPA can provide guidance.
5. Revisit Your Budget
Look carefully at your assumptions and at your revenue and expense projections. Can you enhance the dollars coming in and decrease the dollars going out? Particularly if your practice provides both medical dermatology and cosmetic services, look not only at your total revenue projections, but also at the breakdown between revenue from insurance plans and revenue from patients. In tough economic times, you might expect to experience a decrease in patient revenue from elective procedures. If that’s the case, consider ways to increase the number of visits from patients who are covered by insurance. For example, you might list the names of the private and public insurance plans that you accept in a prominent place on your Web site and in your print and advertising material. And while you are focusing on insurance, make sure to re-negotiate your managed care contracts on a regular basis. Most managed care plans don’t increase your reimbursement unless you ask for higher rates.
With respect to expenses, take a hard look at overhead. If an expenditure does not contribute to the production of revenue, don’t spend it. Salary and wages probably account for the largest share of your budget. Review the way in which your practice is organized. Do you have the right people doing the right jobs? Are there ways in which information technology might save dollars that you now spend on people? For example, do you have electronic prescribing, which allows you to communicate directly with pharmacies?
Historically, you may have given your employees annual raises based on merit and/or cost-of-living. It may be time to temporarily freeze wages and look for other ways to say thank-you. Gift cards to a discount retailer are generally a welcome gift.
Like salaries, your benefit package deserves another look. Ask your broker to shop for options, and consider modifications such as reducing coverage for families but not for employees.
Another place where you might reduce costs is continuing education. Physicians and physician extenders need CEUs to maintain their professional licenses, but these days there are many alternatives to attending a national meeting held at an expensive resort. Take advantage of less expensive on-line Webinars and other education programs. Although on-line learning doesn’t offer the same opportunities for networking as attendance at a meeting, it’s certainly a reasonable strategy.
Malpractice coverage and other insurance policies also deserve another look. Get competitive bids before deciding you must remain with your current carriers.
6. Review the Spectrum of Services You Offer
Look closely at the spectrum of services that you offer, and determine if there are gaps that might cause patients to seek care at another practice. Here’s an example. The pyramid of services shown below identifies the types of services that might be provided by a practice that offers both medical and cosmetic dermatology and plastic surgery. If you don’t offer one of the services in the middle of the list, the patient may go elsewhere — and stay there.
7. Engage Staff in Helping to Develop Creative Solutions
Job security is an uppermost concern for all employees, and yours are no exception. Engage your workforce in helping you analyze your current practice situation and in finding creative solutions. Candor and appreciation go a long way. Financial incentives for good ideas are always welcome, particularly if you are keeping salaries at the current level or modifying the benefit package. The incentives don’t need to be large; it’s the idea that counts.
Employees always like clarity of expectations and performance. In a struggling economy, it’s even more important that you use a formal performance evaluation system.
8. Enhance Relationships with Referring Physicians
Developing and maintaining good relationships with individual physicians and groups that refer to your practice is always important, particularly when you are trying to keep business at the current level or increase it. Using your referral statistics, determine who’s most important to you and make a visit. Ask ahead of time if the physicians have a particular concern that they would like you to address. Talk about advances in skin care that can benefit their patients. Bring with you one or more members of your staff who will make appointments for new patients who are referred to your practice.
Another effective way to enhance relationships with referring physicians is to regularly send them a physician satisfaction questionnaire. Ask about responsiveness of your staff to physician phone calls and appropriateness and timeliness of your follow-up notes. Physician satisfaction surveys have two advantages. First, you get feedback on which you can act. Second, you keep your practice name in front of those who are best positioned to direct business your way.
Dr. Vikas Patel, who opened North Carolina Dermatology Associates in February 2009, suggests yet another strategy regarding referring physicians, particularly for new practices. He comments, “Physicians and practices that are new in a community don’t have pre-established referral patterns. Differentiate them from established physicians and cultivate their interest.”
9. Concentrate on Making Current Patients 100% Satisfied
Patients expect the very best clinical care from both you and your staff. But their expectations don’t stop there. They judge your practice by the way in which you relate to them at every point during their interaction with your practice. Meet these expectations by the example that you yourself set and by the instructions you give your staff. Demonstrate the way in which you want people to answer the phone. Clarify instructions for long waiting times for appointments. For example, the staff in Dr. Gary Bressler’s Durham, NC, practice never uses the words “I can’t find an appointment for you.” Even on the busiest days, patients hear more positive words such as “I can put you on our waiting list. We always get last minute cancellations.” And they are true to their word.
Visits to dermatologists are short compared to those to other specialists. Nonetheless, take a few minutes to talk with patients about their personal financial situations. Concern about the cost of co-payments and expensive prescriptions may mean that patients neither pick up prescriptions that you have sent to the pharmacy nor return for follow-up visits.
Decide on an approach to payment plans or discounts for services that are not covered by insurance. Patients will appreciate your understanding of their financial situations.
Keep patients engaged with your practice by asking for their feedback on patient satisfaction surveys. On-line surveys like Dr.Score.com, which was developed by Steven R. Feldman, MD, PhD, not only capture data from your own patients, but compare the results from your practice with those of other practices of the same specialty and size. If you don’t like satisfaction surveys, think about using “mystery patients” whom you pay to assess your practice. An outsider might give you valuable suggestions for improvement.
10. Take Steps to Minimize No-Show Rates
No-show problems can be particularly troublesome in an economic downturn. Patients may be embarrassed to mention a job loss and simply not show up. Here are several strategies that you can take. Make follow-up appointments when patients check out of your office. If the appointment is made at a time that is convenient for the patient, he/she is more likely to return. Instruct your staff to call and remind patients of their appointments. Or use an automated system like Phone Tree or Cell Minder that can do the job electronically without requiring so much staff time. Adjust your scheduling so you see return patients in the early morning and late afternoon and new patients in the middle of the day. That way you are less likely to run behind because of unanticipated clinical situations. Finally, as suggested above, when patients come to the office, have that conversation regarding changes in financial circumstances so you can head off no shows before they occur.
11. Develop Strategies for Attracting and Retaining New Patients
You can attract new patients in many ways, and in tough economic times this task is even more important than usual. Community groups and health clubs are appropriate audiences for messages about healthy skin care. Beauty salons, too, might be receptive to having you stop by to share suggestions for clients. Contact your local newspaper or TV station to see if there is interest in a topic on which you are an expert.
Attracting new patients is only half of the equation. You want to make a positive first impression so the patient leaves your practice convinced that he or she has made the right choice. Give new patients the opportunity to download forms and other information from your Web site prior to the visit. Allow extra time prior to the appointment so one of your staff can talk with new patients and explain how the practice works. Clarify financial policies and insurance questions ahead of time. Most important, ask every new patient what is important to him or her about his or her relationship with a physician. Pay close attention to the answer and explain how you will respond.
12. Maximize Use of Your Web Site
A Web site with clear content, good photographs and/or videos, and testimonials from satisfied patients is an effective and relatively inexpensive way to share information about your practice with two groups of people. Current patients and referring physicians already know about you and can use the Web site to download forms and get information about your practice. Patients who are considering joining your practice can learn about your mission and goals, your credentials, and the way in which your practice works. Given the reliance of so many people on the Internet, if you don’t have a Web site, patients may decide to seek care from a practice that is more up-to-date in its technology. Dr. Patel, of North Carolina Dermatology Associates claims that 40% of his new patients have found his practice through his Web site (www.ncdaskin.com).
You have several options with respect to how you construct your Web site. You can include general information about your practice such as services that you provide, office location(s) and directions, background information about you and your staff, and listings of insurance plans that you accept. You can also include patient testimonials and before and after photographs. Particularly in dermatology and plastic surgery, a picture is worth a thousand words!
You can go one step further and add functionality to the Web site, allowing patients and other users to communicate with you in a secure fashion through a patient portal. Patients log in using a user name and secure password. They can request an appointment, download demographic and medical history forms, obtain lab test results, request prescription renewals, and pay bills on-line using a credit card. Companies that specialize in providing this functionality make sure that the features are HIPAA compliant. You create a whole new relationship with your patients, encouraging them to find a “dermatology home” much as your primary care colleagues are creating a “medical home.” Patients like the convenience of contacting you at their convenience.
Another good way to use your Web site is to highlight new services that you offer or products that you sell. If you attend or speak at a professional meeting, let people know. If you have a practice newsletter, make sure to put a link on your Web site. For example, Aesthetic Solutions in Chapel Hill, NC sends its Face Facts newsletter to a large distribution list.
Stop Worrying, Take Action
The bottom line is that in challenging economic times, there’s much you can do to promote your practice. Worrying isn’t on the list!