It is not a new thing that private practices are struggling to thrive. Challenges such as decreasing reimbursements, higher cost of service delivery, attracting and retaining great staff, and increasing administrative burden are closing practices daily. While many of these systemic challenges are outside our direct control, there are actions we can take immediately to increase our probability of success.
Adopt the attitude of an entrepreneur. Physicians frequently tell me they run practices, not businesses. This perspective is born out of witnessing business practices that have brought harm to patients. It is important to note that while harmful business practices exist, there are also business practices characterized by integrity and effectiveness that increase value to patients. Without viewing our practices as enterprises and adopting an entrepreneurial identity, balancing the dual goals of widespread impact and financial success becomes an uphill battle. No margin, no mission. Staying profitable is what gives us the right and ability to continue to serve patients.
Embrace promoting your practice. When I started my private practice fourteen years ago, I believed marketing was unprofessional and irrelevant to me as a physician. What I did not realize at the time was the power of creating market visibility. One of the best things I can do for my potential patients is to let them know that I exist and show how working with me will change their lives. Promoting my practice is one of the kindest things I can do for a person who is looking for a doctor just like me. When we fail to spread the word, we remain the best-kept secret. We don’t get to serve patients because they never found our service. Practically speaking, promoting your practice looks like building a referral base and leveraging social media.
Prioritize retention of current patients. Acquiring new patients costs seven times more than retaining current patients. Think about marketing as the front door of your practice. Your ability to retain your patients is the back door. No matter how effective you are at getting patients in the door, if your patient experience and compliance are lackluster, your back door is wide open, and they will walk straight through the exit. In this scenario, it will be impossible to sustain the volume your practice needs in order to thrive. Instead, focus on delivering smooth service and facilitating patient compliance.
Here are a few tips to help you prioritize retention. First, take a walk through the entire patient experience from start to finish and ask yourself a few questions. Are there bottlenecks? Does the process break down at any point? What can be improved? What can be made less confusing? These questions are worth asking periodically. Second, get familiar with your patient compliance data. Know what percentage of patients have the next appointments scheduled. How many missed their last checkup? What is your system for helping patients stay compliant? Closing your back door will be one of the most important things you do for the long-term stability of your practice.
Optimize team roles and responsibilities. Your team is most likely your largest “expense.” In the best-run businesses, teams are designed to be an investment, not an expense. Jobs are designed so that team members contribute directly to the bottom line within the scope of their responsibilities. Alternatively, a practice where the physician owner is solely responsible for creating revenue is a recipe for burnout.
You can optimize your team by asking this question, “How does this role help me serve my patients at the highest level and generate revenue?” Consider this in the context of your medical assistant and front desk person. Your medical assistant becomes an asset when they make sure each patient has a follow-up visit scheduled before leaving their appointment. Not only does this provide good patient care, but it is also good for the bottom line. Similarly, your front desk person can ensure 90 percent of all copays and deductibles are collected at the time of service. These two strategies alone can make a significant difference of thousands of dollars for your practice. Simple change but powerful results.
Take ownership of revenue cycle management. In my early days as a private practice owner, I avoided the billers and the billing department of my practice like the plague. Not only did I not understand what the data provided implied, I didn’t know how to tell if the team was doing a good job. I especially didn’t feel like I had the time to figure it out. As long as there was enough money in the company bank account for the overhead, my salary, and a profit, I adopted the “If it’s not broken, don’t fix it” attitude.
Your billing department is to your practice what your aorta is to your body. If it gets nicked, the practice will bleed out. This is the time for us to take radical ownership of our billing departments. This doesn’t mean we personally do the billing. However, we must take ownership of the oversight and know the financial health of our practices. We need awareness of several metrics such as accounts receivable (AR), days in accounts receivable, gross collection ratio, denial trends, etc. Your revenue cycle is too important to be left on low-functioning autopilot.
This is a challenging time for independent private practices to survive. The good news is that with a few tweaks that go a long way, it’s possible not only to survive but to thrive. Systemic-level changes will take time. In the meantime, let’s do our part to prosper where we are with what we have in our control.
