Learn How To Create A Budget For Your Medical Practice

In medicine, the mention of the word profit is often viewed or interpreted as a dirty word. It is as if the word does not belong in the lexicon when health care is addressed.
 Broke doctor
I argue (in the context of the private medical practice setting) that profitability is a medical practice’s responsibility for one simple reason. If the medical practice (also known as a business) doesn’t deliver profits, health care providers are unable to provide for those in need.

Why Profits?

Profits pay for infrastructure, technology, education and human resources, all of which translate to superior pediatric care when employed correctly.
Another way I like to put it is by saying,

 

…a broke doctor does do anybody any good.

 

Calling vs Profits

Indeed, our medical businesses differ from other companies in that we care for children. And the notion of withholding medical services or restricting access to a sick child merely by the patient’s parents inability to pay for health care services is simply not in a pediatrician’s DNA.
However, it is important to accept the reality that without a way for a doctor or the practice’s income to outpace expenses, health care providers are unable to provide services of any kind. At least not for the long term.

Is there a solution?

How do we reconcile these two competing issues? On one hand, it is necessary for a medical practice to deliver profits if it wants to remain sustainable. On the other, we have an intrinsic motivation to put the patient’s needs first.
I am glad you asked.
These two dichotomies can co-exist – and even flourish – alongside each other. There is indeed numerous tools and principles rooted in business that can help medical practices manage what otherwise appears to be opposing forces.

A Resource You Don’t Want to Miss

Today, I want to tell you about a resource I’ve been working on to help your office obtain financial success, while simultaneously providing unsurpassed pediatric care to your patients.

To help you succeed in your financial success, I’ve written a comprehensive eBook on budgeting that walks you through the process of creating a budget for your medical practice. The materials also cover basic principles necessary to put the exercise into perspective.

Budgeting is a major component of financial success. Moreover, financial success is essential to the continuity of care.

To read more about this offering, click on the image below.

Medical Practice Budgeting
Click on the image

I do hope that you buy the book, but more important, that you find the eBook helpful, useful and valuable.

The Value of Having Core Values

The airline passenger was upset with the flight crew. So she wrote a letter to the CEO to inform him she did not approve of how the crew was making jokes while doing the pre-flight safety checks.

In her letter to the CEO, she made clear that security announcements ought to be taken serious because of how important they were.

 

Airline Customer Service Values Core Values Business CultureAs it turns out, the passenger that wrote the letter was a frequent flyer of the airline. Surely a customer the airline wants to keep. Right? So how did the CEO respond?

“We’ll miss you” and added, “Rest assured that this company, like all good airlines, take safety very, very seriously.”

Most CEOs would have probably sent an apology letter saying things like it was not their intention to offend her; he’d look into to the matter; they value her opinion and appreciate her business. But not Southwest airline’s CEO.

What Can We Learn From The CEO’s Response?

There are many lessons in the Southwest story we can glean and apply to our practices. However, among the most valuable lesson for me, is the importance of having a set of defined core values.

Why Are Core Values Important?

Core values are used to establish a company’s guiding principles. They serve the distinct purpose of determining behavior and action.

Without core values, employees do not know what is right from wrong. Therefore, they have no choice but to make decisions based on their values. Which, of course, may or may not align with the company’s values.

However, when a business establishes them, they assist in determining the right path. Moreover, they give employees a reference in fulfilling business goals.

Southwest Airline’s Core Value

Embedded into Southwest’s company culture, is a set of core values. Here is how they define it for their employees:

We believe in Living the Southwest Way, which is to have a Warrior Spirit, a Servant’s Heart, and a Fun-LUVing Attitude.

No Apologies

For Southwest, working hard and playing harder is one of the company’s guiding principle. Fun is part of what the airline is all about. That is why the CEO did not apologize on behalf of the employees. The employees were embracing one of the company’s unwavering value.

Core Value For Salud Pediatrics

One of our practice’s cornerstone principles is profitability. This may seem obvious or inherent knowledge considering our practice is a small business.

But for us, profit is a core value because our financial gains are the driving force behind our ability to fulfill our mission to advocate and care for children in our community.

In other words, profitability is essential to our ability to provide health care services. Without it, we would not be able to stay open. Thus profitability is a responsibility to the community we serve, not merely a requirement for our business.

Prepared To Lose A Patient

Recently, a parent from our practice questioned our policy that requires patients to leave a credit card on file with our practice.

After explaining the reason for the policy and addressing her concerns about identity theft, the mom was still apprehensive.

I told her that her concerns were legitimate and that I understood where she was coming from, but that the policy was non-negotiable. I explained to mom that we felt so strong about the importance of the credit card policy, that we were willing to lose her family as patients.

Policies & Procedures vs. Core Values

We all have rules in place. Even Southwest, with their FUN-Luving attitude, has them. Going through the pre-flight safety announcements is one of many, I’m sure.

Having systems in place ensure efficiency and safety, among other things. But It is impossible to come up with a scheme for every single potential situation. There will always be situations that fall outside of the “policy.”

Core values, however, can be used in situations that fall outside the parameters of policies and procedures.

Does your practice have a core value statement?

If so, what does it say? Are you prepared to lose patients over it?

 


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Are You Following These 10-Steps Before Terminating A Physician- Patient Relationship?

This post was originally published on the Verden Group’s Blog. Written by Sumita Saxena, Senior Consultant, The Verden Group

It unfortunately can happen to anyone: You go above and beyond to provide your patients excellent care with uncompromising accessibility, and yet something somewhere goes wrong and the relationship quickly deteriorates.

Screen Shot 2015-08-29 at 12.13.02 PMAfter trying your best to mend the problem it becomes clear – the relationship has broken down beyond repair and for whatever reason you reach the tough decision to terminate the patient from the practice.

Before you act and send notice, please take a look at some helpful steps we have compiled for you to consider as you navigate this difficult subject.

Step One: Try to Work It Out With Your Patient.

Practically speaking, when faced with a difficult patient situation, the best course of action is to avoid a unilateral termination of the physician/patient relationship by addressing the problem quickly.

Communication is the key.

The patient should be advised of the situation and given a reasonable opportunity to correct the problem. You should make it clear that failure to correct the problem may result in the dismissal of the patient from the practice.

Step Two: Review the Applicable State Medical Licensing Rules.

State licensing boards govern the practice of medicine and the relationship between a physician licensed in that state and his or her patients. Accordingly, it is essential to review the medical board rules carefully before you terminate a patient from your practice.

Step Three: Consider AMA Guidance. 

The American Medical Association (the “AMA”) has provided guidance on terminating the physician/patient relationship. According to the AMA’s Code of Medical Ethics, physicians have the option of terminating the physician/patient relationship, but they must give sufficient notice of withdrawal to the patient, relatives, or responsible friends and guardians to allow another physician to be secured.

The AMA recognizes that there are times when a physician may no longer be able to provide care to a certain patient, including when the patient refuses to comply, is unreasonably demanding, threatens the physician or staff, or otherwise is contributing to a breakdown of the physician/patient relationship.

According to the AMA, terminating a physician/patient relationship is ethical as long as the proper procedures are followed.
The AMA has given the following advice for the termination process:

  • Giving the patient written notice, preferably by certified mail, return receipt requested;
    Providing the patient with a brief explanation for terminating the relationship (this should be a valid reason, for instance non-compliance, failure to keep appointments);
  • Agreeing to continue to provide treatment and access to services for a reasonable period of time, such as 30 days, to allow a patient to secure care from another person (a physician may want to extend the period for emergency services);
  • Providing resources and/or recommendations to help a patient locate another physician of like specialty; and
  • Offering to transfer records to a newly designated physician upon signed patient authorization to do so. American Medical Association (AMA), “Ending the Patient-Physician Relationship,” http://www.ama-assn.org/ama/pub/physician-resources/legal-topics/patient-physician-relationship-topics/ending-patient-physician-relationship.page

Step Four: Check Your Payer Contracts and Policies. 

A physician who is a participating provider (under contract) with the patient’s insurer (commercial or government payer) may be obligated to notify the payer and comply with additional requirements. You should review your provider contract(s) and policies in order to determine if the payer has a policy on patient termination.

For example, some insurance carriers require 60 or 90 days notice before dismissal (as compared to the 30 days notice required pursuant to certain state laws) and some require prior written notice to the carrier to enable the carrier to contact the patient.

There also may be specific requirements concerning pregnant or mental health patients. Medicare, Medicaid, and other government payers have strict policies on terminating a patient that should be reviewed before terminating a governmental plan beneficiary.

Step Five: Review Your Malpractice Carrier Requirements. 

Some medical malpractice insurance carriers have adopted rules or recommendations for terminating the physician/patient relationship. Accordingly, you should review your malpractice policy or contact the malpractice carrier when establishing the procedure for terminating the physician/patient relationship.

Step Six: Send Written Notification to Your Patient.

You should send written notification advising the patient that he or she is terminating the patient relationship. The notification should comply with the licensing board’s rules and the requirements of the applicable payer and the your malpractice carrier. Ideally the patient notification should be prepared or reviewed by experienced counsel before sending to the patient.

Step Seven: Provide Continuity of Care.

You should ensure that you provide the proper continuity of care when dismissing a patient from your practice, including any requirements under state licensing rules, their payer contracts and their malpractice policy. The AMA guidance recommends that the physician provide the patient with resources and referrals for other sources of care.
Step Eight: Do not Charge for Patient Records.

A physician who terminates his or her relationship with a patient should not charge the patient for copying the patient’s medical records.

Step Nine: Consider Risk Management.

Additionally, you should perform a risk management analysis before terminating the physician/patient relationship. You should consider the possibility (even if the patient’s position is without merit and you will ultimately be successful) of patient complaints, disciplinary investigations, litigation, or other action initiated by disgruntled patients.

Step Ten: Establish a Set Policy on Patient Terminations and Train Staff on the Policy.

In order to avoid any potential issues with former patients, the practice should have a set policy in place for the termination of the physician/patient relationship, including a sample termination letter. The policy should be applied to patients consistently and without discrimination. The staff should be trained on the policy and should document compliance with the policy.
By following the above steps you can be proactive and diligent in mitigating your risk if such a situation ever arises with a patient.

A Vital Aspect Of A Medical Practice That Practice Managers Cannot Afford To Overlook

A wise person once said, “a gentle answer deflects anger, but harsh words make tempers flair.” Therefore, the best way to dismantle anger, frustration, disorderly, disruptive or unruly people, is by employing respect, candor and kindness.

When we talk about managing our practices more efficiently, we think about negotiating with insurance companies, proper coding, practice financials, revenue per visit, E&M code distributions and a bunch of other objective things.

I find it interesting, however, that we put so much focus on maximizing revenue and minimizing cost, but ignore a topic that far consumes our time. And arguably is more important to the “health” of a pediatric practice than the things we consider “best-practices.”

Screen Shot 2014-07-10 at 11.59.51 AM

The topic I’m referring to is “people.” Specifically employee and parent/patient interactions.

Poorly managing how people interact with one another can have far-reaching consequences and be far more devastating than say, a bad payor contract. But how much time do we spend on honing interaction with people of our practices?

Medical practices revolve around people. We all know that we spend more time with co-workers than we do with our families. And due to the nature of our business we are engaging with people hundreds of times a day.

Most of these interactions go without notice, but many result in conflict. And the ones that result in a conflict (all it takes is just one) carry the potential to rip through the fabric of your practice.

LET’S TALK ABOUT A CONFLICT FREE WORKPLACE

The unhealthy tension in a workplace is disruptive and highly counterproductive. Unresolved conflict ruins a company culture. And a weak company culture is like a bad cough. You can’t hide it.

Consequently, addressing tension in the workplace is just as important if you want your practice environment to be a collaborative, mission-driven, high performing practice.

HERE IS WHY THIS MATTERS TO YOU AND YOUR PRACTICE

Happy employees enhance the company’s culture. Content, conflict free employees make for a better workplace, as well as create a pleasant experience for parents/patients visiting the practice.

All this translates to patient/parent satisfaction.

TIME TO EXAMINE

Now, think about how your practice employee treat unruly parents? Does you or staff become defensive or perhaps condescending? Do you unintentionally patronize them using tone, language or body language?

How about coworkers or your practice partners? During conflicts, do you push back as hard or harder as they push you? Are you passive aggressive? Do you have contempt for them? Are there harbored resentments, unaddressed conflicts, unsettled disputes?

THE FIRST STEP

Now, disagreements, arguments, tension, miscommunications, hurt feelings, etc. are unavoidable. The only way to eliminate those kinds of issues is to live by yourself (and even then you have to deal with yourself). We will always have issues with parents, co-workers, partners, and vendors. It’s just part of working with people.

But the key to a conflict-free workplace lies in how each of us reacts to the tension.

Our behavior during or after the conflict will ultimately determine if the issue perpetuates or is resolved.
Think about someone you don’t like. It could be a co-worker or even a relative. Now think about how your behavior is affecting the relationship. Is your behavior making things better or worse?

THE SECOND STEP

When things get emotional and, conversations go from casual to critical, the worst of us usually comes out. Pushing back starts us down a bad path that is often hard to recover from.

We know that being defensive, condescending -or my favorite, sarcastic- doesn’t lead to a path of resolution. But these three things do set us up on the right path:

Respect, Candor & Kindness

Sounds simple. Too simple in fact. But what is the alternative?

A wise person once said, “a gentle answer deflects anger, but harsh words make tempers flair.” Therefore, the best way to dismantle anger, frustration, disorderly, disruptive or unruly people, is by employing respect, candor and kindness.

I’m not suggesting this is easy. Some people get on our nerves. You may even feel the urge to provide too much candor. Other situations are unfair and responding with respect and kindness is difficult. And the truth is some don’t deserve your respect.

But even so, fighting fire with fire doesn’t make things better. But fighting fire with water gives us a chance to resolve.

So the next time things start to get heated with a parent or even a coworker remember, that how we approach a conflict will largely determine the outcome.

Customer Service Axioms For Your Pediatric Practice

Have you noticed that everybody knows how to deliver exceptional customer service, except those that actually do? We’re all customer service connoisseurs. We all can recognize excellent service. And we are even better at pointing out bad service. But when it comes time to execute, most fail.

I think that the reason customer service is hard to execute, is not because we don’t know how to, but because we easily forget. We often get wrapped up in our task, that we lose the service-centric service that we started out with.

Samuel Johnson said, “Men more frequently require to be reminded than informed.”

With this in mind, I’ve put together a slide deck that highlights a few axioms I use to remind team members (as well as myself) how to get back on a customer service-centric track.

In the comments, share with us what are your favorite customer service axioms?

Extra, Extra – Now Offering Coaching Services

Screen Shot 2015-02-03 at 7.56.46 PMPeople always ask me if I do practice management consulting.There was a time when I did. But for the past two or so years, I’ve responded by saying no. I enjoy consulting and love to do it, but I had to stop because of the time commitment.

Recently, I was talking with a loyal reader of PediatricInc about this very topic and she suggested I do remote coaching.

My friend, who owns her practice, explained that she doesn’t necessarily need a comprehensive on-site consult. “I just want to ask a question about my practice or run things by someone familiar with practice management,” she said.

She went on to say, “…you know doctors don’t get training on business, management, marketing, collections…. having somebody to reach out to that has the business and practice management training would be valuable.”

“Like a practice management coach?” I asked. And she said, “ yeah, that is a good way to put it.”

We talked a little while longer. By the time we finished up, my loyal reader and friend had convinced me.

Today I’m announcing a new service on PediatricInc called PMB Coaching for those pediatricians and/or managers that want my perspective on practice management, discuss in detail a blog post, run something by me or provide another set of eyes.

Interested in learning about the PMB Coaching?

Click on this link.

 

Do Pediatricians Have A Marketing Problem? [Pediatric Practice Management AwesomeCast]

WorkingTogetherToday, Chip and install about pediatricians’ marketing problem. We dive in and discuss how pediatricians have not done a good job of distinguishing themselves from the competition. And when we say competition, we don’t mean other pediatricians, but rather retail based clinics and large hospital networks.

The result of our poor efforts in differentiating ourselves? Parents don’t really understand the value that comes from visiting the pediatrician’s office rather than a retail based clinic. So in many parents’ mind, going to retail based clinic is the same intern of quality of care as visiting the doctors office, but faster and cheaper.

We also talk about what each of us thinks peds could do to begin fixing this problem.

We hope you enjoy the Awesome cast, and if you do, make sure to tell your friends about it.

For the audio version, click below:

iTunes link

Deceptively Easy Way to Improve Your Practice, Guaranteed

On a piece of paper, write down this question:

Image-1

It doesn’t have to be written exactly like I wrote it. Any variation will do. Then, make copies. Several of them. For the next few days or even weeks, hand each parent that comes to visit your office the sheet of paper with the question on it. While they wait, they will have plenty to think about out. You can ask them to use the remaining space – as well as the other side – if they require more than just a few lines.

I just saved you $5000 in consulting fees. Not to mention provided a way for you to have specific and practical ways  to make your pediatric office 10x more awesome than it already is.

You’re welcome…

Learn How to Get a Handle on Your Collection Efforts

Screen Shot 2014-02-04 at 10.23.03 AMOne of the questions I get asked the most about, is our credit card on file program. We started this policy back in 2009. And let me say it has been one of the best decisions we’ve ever made.

For starters, having credit cards on file enables us to focus more on health care than health care collections. It goes without saying that our A/R has improved tremendously. We don’t have to send out multiple letters or make too many phone calls in order to get paid. If the account is delinquent, we process the card.

There are many more advantages. But fundamentally, a credit card on file puts the practice in a better position to collect 100% of what they are owed. It also transfers the credit risk to the credit card company. Which are far better at lending and collecting than we will ever be.

When we first started doing this, we didn’t know what we were doing. We just put together a policy that we thought worked best. There wasn’t anybody, that we knew of, that had done this so we had to basically create the wheel.

Fortunately, that is not the case anymore. Why? Because my friend Mary Pat Whaley from managementmypractice.com has an awesome seminar that teaches you exactly what you need to do in order to set up a credit card of file program in your office.

Below is Mary Pat’s pitch:

Were January’s revenues even more disappointing than in previous years? It’s probably not going to get better as the year goes on – 2014 has THREE BIG REASONS why practices are struggling to get paid:

  • High Deductible Health Plans (HDHPs) are creating lots of confusion and practices may not know fow to explain financial responsibility to the patient. Sending patients endless statements or turning them over to collections is NOT the way to establish financial viability for your practice.
  • Exchange Plans have a loophole in which patients can receive services for up to 90 days without actually having paid more than the first month’s premium. If patients do not pay their premiums after 90 days but you’ve furnished them services, how will you collect?
  • ICD-10 will be the disaster we are all anticipating in October of this year. Even if you’ve had ICD-10 training and know what you’re doing, it’s a good bet that insurance plans will use the excuse of ICD-10 to withhold payments for as long as possible. Can your practice continue to pay expenses when insurance plans AND patients aren’t paying you?

If your practice is like most, you may not be sure what to collect from the patient and so you collect nothing.

Having the patient’s credit card on file allows you to responsibly charge any remaining balance to the patient’s credit card once the insurance plan pays. It also allows you to establish electronic (“set it and forget it”) payment plans.

What is really unique to the Manage My Practice CCOF program is its flexibility! Based on each practice’s specialty, demographic and philosophy, the program can be tailored to fit your practice and the way you want to collect from patients.

Credit Card on File is a safe and secure way for your patients to pay their balances.

This program is compliant with the Payment Card Industry (PCI) standards, and patients actually like the convenience once they understand the program! Credit Card on File is safer and more convenient than sending statements!

Join us for this week’s live webinar:

“Starting a Credit Card on File Program in Your Medical or Dental Practice”

Thursday, February 6th, 3:00 – 4:30 p.m. EST

90 MINUTES – Twelve (12) worksheets, patient handouts, forms and policies ($99.95 )

REGISTER HERE 

Please contact me if you have questions about how Credit Card on File could work in your practice.

Best wishes,

Mary Pat

I’m telling you, this is one of the best $100 you’ll spend this year. Don’t delay and sign up for this seminar. You’ll get a step-by-step, resource rich guide on how to implement something that you know you desperately need.

Editorial Note: In the interest of “transparency” please note that I have absolutely NO financial arrangement with Mary Pat or her organization. This is truly something that I believe in. Furthermore, I esteem Mary Pat and I think she is doing great work. I wish this seminar would have been around when we started doing the credit card on file. Thus, wanted to bring awareness to this webinar so that you don’t make the mistakes we made. Lastly, the more people start implementing it, the more common it will become. And the more common it becomes, patients will freak out less; and hopefully we can get to the level of awareness hotels and car rental companies have with their patrons. 

The Reason Your Collection Letters Are Not Effective

Screen Shot 2013-11-14 at 10.53.56 AMMost patient collection letters I’ve seen come off very threatening and standoffish. They are written to intimidate. For example, they’ll say, “Final Notice” or “…your account will be sent to collections if you don’t respond...” The notion one is trying to convey is, you better pay now or else.

At our practice, we sent out letters with these aggressive words. And most of them got ignored. So what did we do? We sent another letter but this time, with stronger words like  2nd Notice or Final Notice… you know, to get them to shake in their boots.

Again, most of them were ignored. My guess is that at best, 1% of parents would respond to them. I think we offended more parents than those that sent payment.

Clearly, this was the wrong approach. Not to mention highly counterproductive. I wondered if there was a better way.

I thought about the reasons someone would disregard  2 or 3 statements (plus another 2 or 3 collection letters) from the doctor’s office? These 5 reasons came to mind:

  1. Genuine Oversight – This is the crowd that forgets, or procrastinates  or miss places our correspondence.
  2. Overwhelming Feeling – This is the group of people that have so many bills, thus so overwhelmed, that they take the out of sight, out of mind approach.
  3. Confusion – These are the parents that don’t understand their bills. So they set the statement aside with the hopes to call one day to find out what the deal is, but never calls. Out of site, out out mind creeps in until next billing cycle where the process starts again.
  4. Can’t pay the balance outright – Since this group can’t pay all their bills, they ignore the ones that aren’t on the priority list, like for example, cable TV.
  5. Disingenuous Oversight – These are the professional debtors. These are the people that never had intentions to pay. These are the people that intentionally disregard anything that they don’t want to pay.

If we slice up your A/R into 5 equal parts, and we trust that these are indeed the reasons parents haven’t paid, we’ll find that 80% of our patients aren’t deadbeats. Consequently, one is doing more harm than good when you consider that only the people that are in group 5 (or 20% of the people that owe you) are the deadbeats.

The 80% or more of your parents just need help.

The problem is, the stern letters are written under the premise that everybody that owes you is a deadbeat. Not to mention, people have a harder time paying people they don’t like. Sending them a nasty letter simply stirs the pot. At the very least it adds a bit of friction to the relationships between the practice and the parent.

And for those that the stern letter is truly intended for, they don’t really care. Nothing is going to motivate them.

How do we solve this problem?

With this in mind, I took a different approach in writing our patient collections. My focus is still wanting patients to pay their bills, but instead of threatening them with legal action, or telling them we are going to send them to collections, I wrote the letter with the intent of offering help.

Here is an excerpts that we use in our letters:

If you have a question regarding your bill or need help reading your insurance’s EOB, we’d be happy to help. We understand medical billing is not always simple to understand, but we can help. 

By lowering our guards a bit and reaching out rather than growing aggressive with every letter is simply  a better and more human approach. In other words, kindness is the approach.

The letter continues with this:

We understand that many of our patients experience financial difficulties. If this is the case, please let us know so we can assist you in making budget payment arrangements. 

The most stern part of the letter is written like this:

We want to help you fulfill your commitment without causing undue hardship, so please do not hesitate to contact our offices.

Lastly, we personalized each letter with the patient’s PCP. Most people really like their pediatrician. And the thought of sticking them with the bill may be enough to persuade the “good” debtors to give us a call.

Here is an example of the wording we use:

Your prompt attention is appreciated. Dr. « Insert_Patient_ProviderName» would appreciate it very much.

We found that our response went from 1% (at best) to around 25 to 30% by merely changing the tone of the letter.

It is worth noting, that the sooner one starts sending the letters, the better results you will have. If you wait 90 or 120 days before sending out the “friendly” collection letter, your chances of getting paid are less. The friendly letter, however, is very effective in the beginning stages of the collection process.

Before the day is over, take a look at your collection letters and see how you can come across as caring, compassionate and empathetic (which all pediatricians are) instead of the opposite. I’d be willing to bet someone else’s money that you will see better results.