One of the advantages that small businesses have over large companies is they can more nimbly implement changes and execute strategies.
Nevertheless, that speed is relative.
Important business decisions still require planning and take time to develop. If a practice runs into trouble, the sooner the problem is spotted, the faster remedial measures can be taken. Do you know the warning signs of a practice in peril?
An empty waiting room is an obvious clue that things are amiss. But there are also subtle indicators that can give you an early alert and spur you to take needed action—while there’s still time.
You know that patients in crisis need urgent help and you can’t waste time with wrong approaches. In like guise, a practice listing to port won’t be righted by a doctor flailing about in panic. Yet practice management experts will consistently tell you they commonly see DCs doing exactly that when they enter a rough patch. A calm, steady hand and the right moves are what will save the day.
Causes for concern
We spoke with some practice turnaround professionals to find out more, because their experiences in helping DCs in trouble might resonate with those in similar straits. Scott Munsterman, DC, observes that changes in the industry over the past decade have altered the practice landscape. So a DC who was doing well in the past may run into problems due to the implementation of the expanded Health Insurance Portability and Accountability Act (HIPAA), electronic health records (EHR), and the Physician Quality Reporting System (PQRS). “If practices have not made accommodations to comply or adapt to these changes, chances are they are either currently experiencing problems or will in the near future,” he says.
And that’s not all. Munsterman points to the new ICD-10 coding regime and the proper coding of CPT codes, and the new quality payment system enacted by the Medicare Access and CHIP Reauthorization Act (MACRA), known as the “doc fix.”
“We see many issues arising from post-payment audits that result from lack of proper coding and documentation,” Munsterman says. “Many DCs do not report PQRS and therefore are unprepared for the new payment system for Medicare.”
Medicare predicts that more than 98 percent of chiropractors will experience reduced payments by 2019. And while fewer than half of DCs are using an EHR system, even those who do have one are likely not using it to its full potential.
Another expert in this area is Brett Penager, who notes the importance of detecting danger early: “Most DCs wait until they are in the downside of new patient acquisition to do anything about it, and then go into crisis mode. But by the time that happens it may be too late to recover your business.” He stresses the importance of consistent marketing programs to avoid the roller-coaster pattern common to many practices.
And Larry Markson, DC, who has coached thousands of chiropractors in practice development, finds that the most common problems chiropractors have tend to be matrimonial or personal issues. It might be an impending divorce, trouble at home, or some other emotional turmoil that follows the doctor into the workplace.
“People say you should hang your problems up before going into the office, but that doesn’t always happen,” Markson says. “Perhaps it’s a death in the family. These kinds of emotional shocks tend to crash a practice quickly.” From a larger perspective, he finds that the risks a DC faces reflect the personality and practice type of the doctor in question.
Sounding the alarm
As explained above, the challenges jeopardizing your practice could be regulatory in origin, come from a breakdown in management or a lack of business systems, or possibly stem from internal conflicts and turmoil.
Whatever the threat to your livelihood, the first decision you’ll need to make is whether to try to solve the problem yourself or lean on outside help.
In Penager’s experience, many DCs make this decision based on their gut instincts or seek the advice of a friend. They might opt to choose a consultant based on the results they see others getting, but fail to ask whether this person would be a good fit for their team and philosophy.
“Self-correction is really about having a purpose with an endgame in mind and a sound plan to make it work,” he says. On the other hand, “As Einstein said, ‘We can’t solve problems by using the same kind of thinking we used when we created them.’ You’ve got to get to a new level of thinking.” And sometimes that requires the outside perspective of a consultant or practice management firm.
On that point, Markson adds that, while the self-correcting approach may appeal to many, it is unlikely to result in radically improved practice growth—even if successful. This is because a doctor is likely to correct only back to the level of performance that existed prior to running into problems. “You have to add additional energy to move beyond that point,” he says.
Taking the temperature
If you do retain a consultant to help you craft a practice turnaround strategy, that person will need to assess your situation. What will he or she be looking for? What are the signs and indicators of a broken business?
Markson always starts with appearance—the physical look of the practice. Is it neat and uncluttered? What are the colors like? Are there Post-It notes stuck around? How are the staff dressed, and how do they greet patients? He wants to see genuine friendliness, warmth, knowledge, and the ability to communicate the chiropractic message.
For his part, Penager starts by taking an honest appraisal of the key metrics of the practice. And the numbers can be worked both ways. You have to work backwards and examine not just income and expenses to see how your practice is doing, but look at your targets and determine what your metrics should look like. “The more data you can collect consistently, the better chance a DC has at self-correction,” Penager says. “Let the truth of the numbers reveal the truth of your practice health.”
It’s surprising to learn that most DCs fail to set clearly defined goals. If the goal is a million-dollar clinic, then Penager has clients work backward to determine the number of new patients needed per day to achieve that objective. “Offices that are clear on their targets can devise a clear plan to reach them.”
When Munsterman is performing an assessment, he studies the practice’s statistics such as the CPT codes being used and the most common ICD-10 codes selected. He’ll conduct a random review of the documentation, a capacity analysis, and look at the financial accounts aging report. “Most offices do not practice by statistics, so most doctors don’t know if their offices are healthy or sick,” he says.
The next key statistic he wants to see is patient satisfaction, the “would- recommend” opinion patients express. The questionnaire he uses offers a Likert scale of 1 to 5, where 1 is “strongly recommend” and 5 is “strongly would not recommend.” In this way, he’ll gain a sense of the patient experience, which clearly relates to referrals.
“We ask a lot of questions, but that’s the big one—patient experience. When you know that patients would recommend you, then you know you’re doing the right things in practice,” he says.
Munsterman also looks at capacity, the layout of the practice, which can be conducive to whether the doctor is seeing 10 or 50 patients a day. If the doctor’s vision is larger than the number of patients being seen, then he looks at capacity to see what’s preventing the practice from reaching that objective.
There’s no question that the success (or failure) of a practice is closely dependent on how well the doctor manages his or her staff, and runs the practice from a business perspective. It isn’t enough to simply be an excellent clinician. The practice owner must have the leader- ship skills and managerial acumen to get the most out of the resources— both human and structural—at hand. Fortunately, these skills can be acquired if you lack them.
As Munsterman explains, you can self-reflect by asking yourself the following questions:
- When is the last time you put fresh paint on the walls?
- How many pieces of broken or outdated equipment are sitting in rooms, halls, or closets?
- Do you hold meaningful staff meetings? Regularly?
- Do you have staff huddles during the day to discuss patient care needs?
“If you are not taking the time to address issues, you are likely not creating a successful, enjoyable work environment,” he says. “Poor staff morale and performance are due to a lack of leadership toward a unified vision and clearly established values within the practice.”
On the other hand, a failure to embrace your responsibilities can result in lost patients, a hostile work environment, high staff turnover, and burnout. Penager agrees that every aspect of a practice suffers when there is poor management of staff.
Markson also concurs that a high rate of staff turnover is a flashing red warning that leadership is lacking.
Employees who love their jobs tend to stay in them, and they perform at a high level of efficiency and accuracy.
“What you want, first, is a decisive doctor making decisions based on the purpose and mission statement of the practice,” Markson says. “And then there’s confrontational tolerance—are patients missing appointments, showing up late, missing payments—what is the doctor willing to allow in the practice?” The owner can’t be afraid of making hard decisions and being firm when it comes to patient management.
While the cat’s away . . .
No examination of practice risks and dangers would be complete without a look at employee fraud and embezzlement. You may personally know of a doctor who took a serious loss or went bankrupt as a result of accounting malfeasance.
Your best safeguard is to “inspect what you expect,” Penager says. It can be tempting to delegate finance and accounting matters to an employee so you can focus on patient care, but don’t go too far. “Some DCs rely so heavily on someone else at crucial points and don’t check to see what is being done that literally tens of thousands can be walking out the door monthly,” he says.
Most doctors turn over all the operations of an office to the office manager, Markson observes. “And I don’t believe in office managers—the doc should be the manager. You should be the one who hires and fires.” You need to enact systems, ask about patients, and check your finances. “Know how many were scheduled, how many showed, up, how many were recalled, and what happened with them. Let the staff know that you are checking all the time to ensure that things are running efficiently,” he says.
At some stage in a turnaround effort, you’ll want to know when you have, in fact, turned things around. What should you be looking for? How will you know when you’re steering clear of danger and smoother seas lie ahead?
It will be when you’re seeing fewer ups and downs in collections, marketing campaigns, staff turnover and emotions, Penager says. “When you know your goal, then you’ll know the metrics and statistics to check to see if you’re getting there.”
For Munsterman, it’s something you’ll sense across the board. “It’s when you place an ad for a position and you have a dozen applicants and your reception room is filled with smiling patients and you look forward to coming into work each day.” He says you’ll know you are on track when you have regained the fun, passion, and excitement of being a doctor of chiropractic.
In Markson’s view also, beyond steady growth, your metric will largely be happiness. And this is something you can track. He suggests you log your telephone calls during the day. Count the number of appointment changes, cancellations, and no-shows. Mark those with a “D” for “down.” Conversely, mark new patients, walk-ins, and patients seen with a “U” for “up.”
You should find that you’re happiest and achieving your targets in strong up months, and these should correlate with your mindset: “Attitude determines your altitude,” he says.
As you can see, risks to your practice can take many forms, from marketing misses to major malfeasance. Your interior and floorplan may need an overhaul. Your leadership and management style could potentially profit from a tune-up. And possibly it’s your outlook and passion that could stand a refresh. Even if you think you’re doing well now, consider a practice audit across all these dimensions and find out where you stand.
Daniel Sosnoski is the editor- in-chief of Chiropractic Economics. He can be reached at 904-567- 1539, email@example.com, or through ChiroEco.com.