Capitalizing on the chaos–using the economic downturn to improve your practice.
Whether you call it a downturn, a recession or a depression, the fact is, the economy is having a negative impact on just about every business, including medical practices. Long considered a recession-proof industry, healthcare is getting hit hard this time round.
I believe that current conditions offer physician practices an incredible opportunity, and impetus, to improve. Implementing processes and procedures to make your practice run more efficiently will ensure that you survive these tough times and that you prosper at all times.
According to an AARP survey conducted in October of 2008, about one in five midlife and older adults have had their health negatively affected by the current economic downturn. 22% have delayed seeing a doctor and 51% are taking over the counter drugs in lieu of prescription drugs. Everywhere patient visits are down as people lose insurance and trim household budgets and those that are going to the doctor are struggling with co-pays and deductibles.
Impact on healthcare practices
A February 2009 survey of physicians conducted by the Medical Group Management Association found 70% of respondents reporting their practice either had experienced decreased revenue, or felt there was a considerable probability of it happening. About 75% reported increases in numbers of uninsured patients. Two-thirds reported cuts to their practice’s operating budget, while 59% said they had frozen staff hiring.
Decreased revenue and cash flow reductions have resulted in practices delaying equipment purchases, freezing salaries and new hires and cutting staff. While these techniques can help cut expenses in the short-term, they are not long-term, strategic solutions for making a practice viable and profitable. I suggest that instead of operating from a place of fear or panic, practices look at how they can improve, and grow under these circumstances.
Turning a negative into a positive
In fall 2008, physicians at Family Medicine Residency in Boise, Idaho, noticed a drop in patient visits at the practice’s three locations. In response, the practice switched its scheduling to make 60% of its appointment slots available on the same day or within 24 hours.
According to Ted Epperly, MD, Family Medicine’s program director and chief executive officer, “We recognized that in this economy people weren’t going to come in as much for chronic care, but they were interested in having access to more acute and urgent care. By that strategy we were able to not only get our volumes up but meet the patients’ needs by making sure they had access to care.”
Of course it makes sense to look for ways to reduce expenses, during a recession, and anytime you want your practice to be as profitable as possible, but it is also necessary to look at ways to become a better healthcare provider and run a better business in order to thrive in the long-term. Here are four key areas to look at, next week I’ll touch on four more.
Be relentless in collecting
Make sure you are getting every dollar that is owed your practice. Discuss payment responsibilities and options openly with your patients to keep them engaged. Communicate regularly with outstanding accounts and follow up on denied claims quickly.
Review coding procedures
Incorrect coding not only delays reimbursement (and therefore cash flow), it also limits the amount of your reimbursement. If you do not have certified coding experts in-house, outsource an audit to ensure you are capitalizing on the services you provide.
Be proactive about scheduling
Remind patients about follow up care to get them back in the door. Educate them on importance of routine, preventative care to maintain health versus more expensive urgent or emergency care.
Keep staff profitable
Make sure everyone in your practice is working to the top of their certification. Assign data entry and low level administration to those not qualified to provide patient care. Keep physicians and nurses performing their most profitable patient care responsibilities.
