7 Effective Habits Of Profitable Medical Practices
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Understand what kind of practice you have Real life examples of how to be more profitable Specifics on what and how to implement at your practice ZHC Dashboard & Benchmark Tool
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7 Effective Habits Of Profitable Medical Practices
- 1. 7 Effective Habits of Highly Profitable Medical Practices Presented by David J. Zetter, PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC Presented by David J. Zetter, PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC 1 © 2012 Zetter HealthCare
- 2. Disclaimer 2 • No copyright claimed on government material or information. This material is designed to offer basic information. The information presented is based on the experience, training and interpretation of the author. Although the information has been carefully researched and reviewed for accuracy and completeness, neither the author, DecisionHealth or Part B News accept any responsibility or liability with regard to errors, omissions, misuse or misinterpretation. 2 © 2012 Zetter HealthCare
- 3. Takeaways Understand what kind of practice you have Real life examples of how to be more profitable Specifics on what and how to implement at your practice ZHC Dashboard & Benchmark Tool 3 © 2012 Zetter HealthCare
- 4. What Are Your Habits? • Bad things happen to good practices • What is causing the losses? • How do you determine the issues? • What can be done to turn losses into profits? • What does YOUR future hold for you? 4 © 2012 Zetter HealthCare
- 5. What Are Your Habits? Self-improvement development plan? Staff performance evaluations & development plans? Annual business plan? Daily, weekly, monthly monitoring & measuring? Involved with the business or just go to work everyday? 5 © 2012 Zetter HealthCare
- 6. Change Your Habits Be the change agent Lead to better results Become a colleague of the owner(s)/physicians Ensure the future of the business Ensure YOUR future! 6 © 2012 Zetter HealthCare
- 7. Change Your Habits Be the change agent Practices that excel Profitability & cost management Productivity, patient capacity & staffing Accounts receivable & collection Patient satisfaction Utilize staff & teams in appropriate ways 7 © 2012 Zetter HealthCare
- 8. Effective Habits #1 Run the business like a business 8 © 2012 Zetter HealthCare
- 9. Effective Habits #1 - Run the business like a business Focus – 3 phases of practice Job vs. career Strategy & vision = plan Seek counsel from experts Goals = success • Ever changing, living, breathing – Vested interest / “skin in the game” – Be creative – Evidence based management 9 © 2012 Zetter HealthCare
- 10. Effective Habits #2 Cash flow 10 © 2012 Zetter HealthCare
- 11. Effective Habits #2 – Cash flow Everyone works cash flow • A/R (collections) – Communications (360o) • What works, what doesn’t Payer contracts & negotiations Daily, weekly, monthly, quarterly goals • Metrics – Billing & reimbursement compliance plan 11 © 2012 Zetter HealthCare
- 12. Effective Habits #3 Monitor productivity, capacity & staffing 12 © 2012 Zetter HealthCare
- 13. Effective Habits #3 – Monitor Productivity, Capacity & Staffing Physical layout affects patient flow Hours of operation Scheduling (maximize) Patient flow – Reception vs waiting – Location timing – Provider flow – “handler” – Care coordination 13 © 2012 Zetter HealthCare
- 14. Effective Habits #3 – Monitor Productivity, Capacity & Staffing (cont.) Back up plans – Partner w/ other practices • Always recruit to upgrade • What do you look for in a candidate? 14 © 2012 Zetter HealthCare
- 15. Effective Habits #4 Patient Satisfaction 15 © 2012 Zetter HealthCare
- 16. Effective Habits #4 – Patient Satisfaction Personality & attitude Welcoming/inviting atmosphere Reception vs waiting Patient portal – Reduce time in “waiting” • Caring & helpful • Surveys 16 © 2012 Zetter HealthCare
- 17. Effective Habits #4 – Patient Satisfaction (cont.) Where patients come from Internet & social media presence Highlight team role in PT satisfaction Highlight successes Employee morale/satisfaction 17 © 2012 Zetter HealthCare
- 18. Effective Habits #5 Monitor, evaluate & communicate 18 © 2012 Zetter HealthCare
- 19. Effective Habits #5 – Monitor, Evaluate & Communicate MBO MBWA Job descriptions w/ responsibilities Training, cross training & education Regular evaluations and communications Accountability 19 © 2012 Zetter HealthCare
- 20. Effective Habits #6 Strategic planning & budgets 20 © 2012 Zetter HealthCare
- 21. Effective Habits #6 – Strategic Planning & Budgets Ensure/insure your future Budgets? Not increasing prior year revenues & expenses Built from scratch Careful consideration Review admin & clinical staffing levels – Largest expense & most control 21 © 2012 Zetter HealthCare
- 22. Effective Habits #6 – Strategic Planning & Budgets (cont.) Benchmarks/Best practices Contracts & fee schedules – Tremendous revenue leaks • Owner goals • Your goals • Complacency • If not growing… Doomed! 22 © 2012 Zetter HealthCare
- 23. Effective Habits #7 Practice dashboards & benchmarking 23 © 2012 Zetter HealthCare
- 24. Effective Habits #7 – Practice Dashboards & Benchmarking What is monitored & measured? What’s important? 24 © 2012 Zetter HealthCare
- 25. Effective Habits 25 © 2012 Zetter HealthCare
- 26. Effective Habits Gross Collection Ratio Payments / Charges = GCR Selected timeframe based on dates of service Adjusted (Net) Collections Ratio Payments (less credits) / Charges (less approved contractual adjustments) = ACR Selected timeframe based on dates of service 26 © 2012 Zetter HealthCare
- 27. Effective Habits Days in A/R Total current receivables net of credits / practice’s average daily charge amount A/R > 120 Days Dollar amount of A/R > 120 from date of service / Dollar amount of total A/R 27 © 2012 Zetter HealthCare
- 28. Effective Habits First Pass Rate Total clean claims / Total claims The percentage of claims that can be submitted without any problems or human involvement Use a designated period of time Denial Rate Total dollar amount of denied claims / Total dollar amount of submitted claims Use a designated period of time 28 © 2012 Zetter HealthCare
- 29. Effective Habits Average Paid Percent •Sum of payments / Sum of submitted charges Average Reductions Percent Sum of payer’s contractual and other reductions / Sum of submitted charges 29 © 2012 Zetter HealthCare
- 30. Effective Habits What are we accomplishing today? Have a plan… Take the business to the next level Visualize Steps Strategies Vs. being controlled 30 © 2012 Zetter HealthCare
- 31. Effective Habits Cash is KING! From your ear to the bank account Evaluate all systems/processes & controls 31 © 2012 Zetter HealthCare
- 32. The Facts – Highly Profitable Practices Less bad debt Collect receivables more quickly Implement operational efficiencies Hire more qualified staff Utilize mid-level providers properly Have higher patient satisfaction 32 © 2012 Zetter HealthCare
- 33. In Closing Inspect what you expect. You cannot manage what you do not measure! 33 © 2012 Zetter HealthCare
- 34. For Follow-up & Further Questions Contact: David J. Zetter, PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC 717.691.7100 Email: djzetter@zetter.com Subscribe to our newsletter at Follow us on www.twitter.com/djzetter and www.linkedin.com/in/djzetter 34 © 2012 Zetter HealthCare
Editor's Notes
- The situation could be traumatic or catastrophic, as in an office fire or computer crash, or – more likely – it could be subtle and compounding, as in unnoticed embezzlement, billing irregularities or an increase in overhead. If you kept track of every administrative detail in your practice, you wouldn't have time to see patients. You have to triage this work in order to be effective and efficient. Just as you work with your clinical staff to monitor the vital signs of your patients, you and your front-office staff can monitor the “vital signs” that reveal your practice's financial health.
- The most productive and profitable group practices have the most efficient workflows The right people, doing the right job at the right time
- 3 phase of practice revenue, expenses, profit/net income/owner compensation
- Everyone works cash flow scheduling/recalls/phone people check-in/front desk clinicians/triage providers ancillaries check-out billing dept OM/Administrator accountant consultants
- Reception vs waiting cabel/wi-fi/kids toys/reading materials, etc Surveys Act on information and disseminate
- Employee morale/satisfaction direct impact on patient satisfaction Patient satisfaction culture Bragging patients Word of mouth advertising Innovate / embrace change TRANSPARENCY is here!
- MBWA Walk in their shoes 360 evaluations & staff meetings allow staff to set portion of the agenda Regular review of work & special projects What about meetings with owners Rewards & recognition
- Real budget isn’t prepared by simply increasing prior year revenues and expenses by an arbitrary percentage; it’s built from the ground up and requires careful consideration of each line item. From a revenue perspective, be sure to consider any changes in patient demographics, variances noted in the procedure mix, and changes to insurance plans accepted. From an expense standpoint, really spend some time on administrative and medical staffing levels as well as their compensation packages. This is one of the areas where the management team has the most control when it comes to costs.
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