For the past seven years, I’ve had the privileged opportunity to dive deep into hundreds of medical practices and see what makes some practices thrive and some, unfortunately, wither. There is no recipe for guaranteed success, but here are some of the insights that I’ve discovered over the years that keep the successful practices, for lack of a better word, successful.
Start Being Vulnerable to Your Competitors
A couple of years ago, after having run Nexus Healthcare Solutions for around five years, it felt like we had reached the dreaded plateau of a start-up. It stopped getting exciting, the challenges weren’t as daunting, and for the first time, I wasn’t sure how to take the business to the next level. I wrote a letter to myself describing exactly how I felt: the challenges that I was facing as CEO, the hazy future of healthcare, the HR issues that can drive a CEO insane. And then I sent it to my competitors and asked them for their advice and feedback. It was a heavy blow to my ego, but it was rewarding and invaluable to hear firsthand from other CEOs of medical billing companies about the struggles they had overcome, what made them excited about the future, and different insights into how they run their businesses. My vulnerability didn’t make me look weak; these colleagues (many who I never met in person, but messaged through LinkedIn) were more than happy to share their stories from the trenches.
As physicians, your colleagues may be direct competitors, but they are also going through the same issues that you are going through. Their EMR is also awful, their front office staff also doesn’t show up on time, they are also on the fence about introducing an annual administrative fee (JUST DO IT!), and if you shared with them (and more importantly listened) you’d be able to hear their unique perspectives on how they are coping. Viewing your competitors as allies in the battle of private practice will give you a fresh and meaningful insight into your own practice.
Malcolm Gladwell says that energized work is meaningful and that this results from three distinct qualities: autonomy, complexity, and a clear relationship between effort and reward. I bet you that these are the three reasons why you are in private practice and not working for the large hospital that is breathing down your neck. You round at the hospital before the sun comes up and get home when your kids are sleeping, and you have chosen this as your life. But being busy does not automatically mean being successful. Here is what I suggest: once a year, if not once a quarter, spend a few hours (you can find the time) doing an 80/20 analysis. Find the 20% of your business time that you dread (the committee meeting that you go to once a month, the annoying patients from that one referral source, whatever it is that is adding to your stress) and find a way to cut it out. For extra credit, find the 20% of your business time that you love (meeting with your medical billing company, teaching medical students, whatever it is that is on your schedule that you are looking forward to) and figure out a way to add those activities to your calendar.
Speaking of being busy…
Know Your Metrics
Your medical billing company is sitting on a goldmine of data, and you need to be doing what gold miners do and get yourself some gold. Many of the decisions that I hear clients making (going to a new hospital, dropping a certain insurance plan, signing up with a new IPA) are made by gut instinct without data. Gut instincts are a good starting point and often lead to insight, but you need to start making decisions with real data. How much revenue is your practice producing from the hospital that you sit in traffic for 45 minutes both ways to see a handful of patients? Or that early morning procedure across town that will make you late for your office clinic— is it financially worthwhile? You should know your average revenue per encounter in the office and at each surgery center or hospital that you go to, and you should be thinking of ways of (legally) increasing those numbers every quarter. Knowing your metrics will allow you to make educated decisions and that is the only way you’ll be able to grow your practice successfully.
Raise Your Fees
Most likely you are trying to figure out why you are busier than you were last year and still making the same income (if not less). No matter how you explain this trend, you are going to be in a bind: your rent, malpractice insurance, and other fixed costs are not tied to insurance reimbursement rates, so you need to make a decision, and hopefully it’s financially driven. As your expenses increase, your revenue decreases, and you barely have time to urinate, how do you survive financially? The simplest way, although not the easiest, is to raise your fees. You know that letter—the letter that you have edited hundreds of time, the letter that every doctor has—your administrative fee letter? Take it out, dust it off, raise the price by 50% and send it out. And that insurance company that pays you almost nothing for your services? Drop them. And get your average revenue per encounter up.
And that brings me to my last point:
Be a Business
The café down the block has an internet presence, monitors their reviews, and knows their competition really well. You need to do the same. Many physicians have a disdain for looking at their practice as a business, but that is the future of the private practice. Think of your practice as a café, a dry cleaners’, a bowling alley; it’s a small business (although I dislike the term small business) and that means that you need to wear your business owner’s hat. Consciously trying to enhance the patient experience (the way your office staff answers the phone, the parking situation, the waiting room, the temperature in the exam room), monitoring your P&L, keeping your revenue cycle management tight and thinking like a small business—these are the things that will allow you to flourish in this changing environment.
About the Author:
Akiva Greenfield is a problem solver and a thought leader. As a child, Akiva dreamed of being a sports agent and physician. In 2010, he took an alternate route when he founded Nexus Healthcare Solutions, a healthcare consulting firm designed to represent physicians much like a sport’s agent would represent an athlete. Nexus has successfully represented hundreds of physicians in Los Angeles. He is available via email at Akiva@NexusHS.com.