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.

Seven Reasons Why You Don’t Want To Miss This Pediatrics Practice Management Seminar

My friends at the Pediatric Practice Management Institute (PMI) have an awesome seminar that you don’t want to miss.

Why should you not miss it?

Glad you asked.

I have lucky number 7 reasons why you should not miss this seminar.

OAK.0021 – YOU’LL BE AWESOMER

I know awesomer is not a word. But it gets’s the point across. Here is the deal, no matter how experienced you are at managing a practice, there is always something new you can learn.

2 – YOU’LL LEARN NEW IDEAS

Managing a private practice can be a lonely world. There aren’t that many of us. And most of the time we are locked up in a back room (used for both your office and storage) trying to figure out how to keep the ship afloat.

Without exposure to a variety of points of view, you will miss new ideas and trends that can impact future results.

3 – YOU’LL GAIN EXPOSURE

Paul and his team at PMI have put together a superb curriculum. The educational materials will certainly expose you to new ways of managing your business (e.g., private medical practice) and help you discover how to be more productive.

4 – YOU’LL MEET COOL & INTERESTING PEOPLE

Here is the way I see it. The practices that tend to go to practice management seminars are precisely the practices I want to learn from. And PMI’s seminar provides a great opportunity to network with the best practice in the country.

5 – TALK TO CONSULTANTS AND VENDORS

Not only will you have access to a community of like-minded people that have similar struggles, have similar challenges and practical, hands-on advice, suggestions, and solutions, you will also have access to the industries top consultants.

Don’t tell them I said this, but if you ask the right questions, to say… Chip Hart, I bet you, you’ll get thousands of dollars worth of practice management advice for <ahem> free.

Keep in mind that experts in the field are some of the best people for you to get to know if you want to learn more about the current health care business climate as it relates to small, private, independent, pediatric practices.

6 – YOU’LL DISCOVER

You will undoubtedly discover innovative ways to help your practice remain competitive in today’s fast-paced, hectic private-practice.

7 – IT’S VEGAS BABAY (NOT A TYPO)

Did I mention it was in Vegas?

All work and no play can get old fast. PMI’s conference can add a layer of enjoyment to managing your career growth by mixing a social aspect into your learning and industry branding efforts.

Never underestimate the power of a little fun mixed with some interesting people!

BUT THAT IS NOT ALL

Use the promo code “PediInc” and save $75 off your conference fee.

Conference Details:

  • WhenFriday, January 29, 2016 at 2:00 PM –  Saturday, January 30, 2016 at 5:00 PM (PST)
  • WhereTropicana- Las Vegas
  • Sign Up: Click on the Eventbrite logo below to sign up

https://www.eventbrite.com/e/pediatric-practice-management-conference-las-vegas-tickets-18689205918?ref=ecount

Don’t forget to use the promo code PediInc to get $75 off

5 Sure Ways To Accomplish Little

Lines accomplishments focusTrust me on this one. Follow these five tips and I can ensure you will have a harder time managing your medical practice. Money back guarantee!

1 – DON’T WRITE GOALS DOWN

It’s far better to think about your goals on the drive to work in the morning and then forget them two days letter. Who wants to keep track of stressful things anyway?

Besides, you’ll only be disappointed 6-months from now when you discover you’ve only accomplished 4 out of the 5-goals.

2 – BE VAGUE

Refrain from being specific about your goals, strategies or expectations. The broader, the better. Maybe your goal was NOT to improve your A/R by 10%. Maybe your goal was to wish for Devine intervention so that all the people that owed money would spontaneously pay their medical bill with the practice.

3 – DON’T DEFINE SUCCESS

Since your intentions are to really, really be successful, you will have no problem making it happen organically. Wish hard!

4 – PLANNING IS NOT NECESSARY

Forget about a plan, action items or steps that need to be taken. You are busy. I know. There is no time for this preparation nonsense. If you desire it enough, surely you will achieve it. Everything will work itself out, right?

5 – TIMELINES? Pluheeze!

Deadlines are only good for one thing, and that is increasing one’s anxiety. Besides, what difference does it make if you decide on an EMR 1-month, 12-months or 6-years from now? All that matters is that you will end up with an EMR, eventually.

Never mind that the sooner you set a timeline the sooner you can move on to improving the office workflow, organize yourself better and streamline processes. Who wants that hassle?

 


 

Bonus Tip:

6 – ACCOMMODATE EVERYBODY’S NEEDS

Make sure you please everybody. It’s the only way to keep the harmony. Delay making changes for fear it will not please everybody. For example, You have two partners that are holding out despite the fact that the majority is on board? Don’t hurt their feelings by going against them.

Good luck!

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.

 

Eligibility & Deductibles: Do You Verify Before Patient’s Appointment?

Recently, I caught up with my friend Lynn Cramer. Lynn is Chief Administrative Officer at Eden Park Pediatrics in Lancaster, PA. Lynn is one of the most – if not the most – experienced practice managers I know, so I always like to glean any insight I can whenever I get the chance by asking her questions on how she has resolved in her practice issues that are a challenge to many of us.

Screen Shot 2014-08-23 at 12.43.40 PMFor this post, I asked if she’d answer just a few questions that summarizes how she has structured the front desk to be accurate in the collection of important information (i.e. addresses, eligibility, telephone numbers, etc) and still remain efficient.

The question and answers are short, but there are valuable nuggets in them. Enjoy!

As far as your schedule goes, what percent is pre-scheduled and what percentage would you say you leave only for same day appointment?

We average about 75% pre scheduled visits and 25% same day scheduled visits.

The majority of your appointments are pre-scheduled, when does your staff check eligibility?

Two days prior to a scheduled appointments.

Is the front desk responsible to check the insurance information?

The billing staff (NOT front desk) verifies that the insurance information that is in our system is valid

What is the process? How does the billing staff goes about doing the checking?

The billing staff uses the eligibility check functionality in our practice Management System. If the patient is new to our office , we check [eligibility] using the payor’s website or Navinet.

Do they only check eligibility or do check other things like deductibles?

If  possible, they try to find out the dollar amount that will be owed at the time of service by the family when it shows that our services will mostly likely be paid to their deductible.

What do you mean by “paid to the deductible?”

That is an important term for your staff to learn  “paid to the deductible.”  When the family talks to your staff, they report that the insurance company told them that the service was “paid”.  The family interprets this as the insurance company paying the provider, however it is their amount to pay the practice because they have a deductible.

What happens if the patient is not eligible?

If their insurance is not valid, the staff messages (via secured electronic message on the portal ) the patient or call if needed.

Often, it is hard to reach a patient. What if they don’t respond to the secure message or your phone call?

If we get no answer, the staff will try to get a letter out in the mail so that the patient gets it the next day (day prior to their appointment). But this does not happen often. Most health insurance websites provide easy access and reliable insurance validity and deductibles.

Inevitability you’ll have a patient that is not eligible and missed all your attempts to reach them and show up for their appointment. What then?

For a prescheduled visit, if insurance is not valid and there is no proof of insurance coverage and they show up in the office we reschedule the visit or offer to allow the patient to pay up front.   There is no harm in delaying a preventive visit until payment is arranged.  The family may also want to choose a free clinic for the services.

What about same day sick visits?

We do NOT do this for sick visits

Brandon, What Is Your Policy On Keeping Credit Numbers on File? [Pediatric Practice Management AwesomeCast]

I continue to get a lot of questions about our practice’s policy of collecting credit information from all of our patients. So Chip and I thought we’d dig into what is a recognized growing trend.

In this episode, I describe my thoughts going into this decision, some of my concerns, and why we decided to collect them. Chip also asked me how do we go about collecting cards, how did I/we present the idea to parents, where I store the cards and what benefits did it bring to our practice and our families.

I also give out a shou-tout to Mary Pat Whaley from Managementmypractice.com. Mary Pat hosts a monthly webinar on how to implement a credit card on file.

I addition to this recording, I’ve written quite extensively about the issue. If you click on this “link“, you’ll be directed to all things collections from the PediatricInc perspective.

Enjoy!

 

 

Listen 

iTunes link

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.  

Is Your Company’s Culture Hindering Your Profitability?

1-IMG_0089I come from a non-medical business world where most conversation centers around profit, revenue, budgets, marketing, sales and things like that.

In the private  practice world, mentioning profit or revenue is almost prohibited as if it was a kind of taboo.

I remember being a little taken aback when people in the healthcare business would talk about “profit” and they would lower their voices and look around and whisper the words “making money” to ensure nobody outside of our conversation heard the money reference.

In our practice, we take a completely different approach. In our practice, we don’t apologize for our pursuit of profitability.

We are very upfront with both patients and our staff about the need to be profitable.

We view “profitability” as a responsibility.

Why? Because a broke doctor doesn’t do anybody any good.

Profitability allows the practice to hire the best docs, hire the best staff, buy the best equipment, send staff to training, pay for docs’ CME’s and all the other things that go along with ensuring patients receive the best medical care possible.

Top notch medical care is expensive.

We believe so strong in this, that in our practice, we discuss profitability in practice’s core values document. Here is an excerpt from our company’s charter:

In order to carry out our mission, we recognize that every staff member must take every opportunity to decrease cost, to increase efficiency, and earn revenues that support our team, our practice and our patients.

In today’s health care climate,  practice employee must be comfortable with talking about money. They need to know that not only is it okay, but a necessity.

Thus, I suggest it is important to “bake” revenue into the culture of the practice.

Fundamentally, this approach sets the expectation. Employees understand that collecting copayments and balances at the time of service is vital to the practice’s mission.

By openly talking about money,  employees understand that the money that comes in to the practice isn’t the doctor’s money, but it is everybody’s money. Collecting from both insurance companies and parents is where the practice gets the money to pay everybody’s salary.

In primary care, this is even more critical because we are in a low margin, high volume business.

And it isn’t just collections. Keeping down cost an unnecessary expenses is just as important. In pediatrics, for example, drawing up vaccines incorrectly, dropping a dose on the floor or simply keeping poor inventory can make the difference between profitability and loss.

Want to avoid revenue leaks an increase profitability? Start talking about money.

Embed it into the practice’s culture.

Please don’t misunderstand me with this point. I’m not suggesting that we only think about money. That is not what I’m suggesting. After all, we are still healthcare providers and things like empathy, caring, understanding, healing, compassion and sacrifice are all part of what we do day to day.

But what I am saying is that if there isn’t enough “margin” docs and their staff won’t be around to be empathetic, caring, compassionate and heal patients. In other words, we can’t help people in need if the practice is also in need.

#11 Manage My Practice [Pediatric Practice Management VideoCast]

I’m really excited about this week’s episode. In this episode, we are visited by Mary Pat Whaley from ManageMyPractice.com, one of the premiere practice management WWW sites.

We have a fairly wide-ranging discussion, but there is some focus on a popular issue, the “credit-card-on-file” topic. We also touch on practice independence, insurance contract negotiation, and more. There is some real gold here! Make sure you visit ManageMyPractice.com while you are at it!

As always, you can find our discussions in many ways:

1. Google+ Community

2. Pediatric Practice Management Mediacast PodCast

3. iTunes

Enjoy