Doctor smith, a chiropractor, is panicking.
For the past two years he has watched his revenue decrease.
It started slowly at first, but now it’s accelerating. Smith is not sure if he can survive, let alone continue his current lifestyle.
Is this happening in your practice? Do you feel like the clock is ticking, yet there are few solutions? Today’s Biz Quiz is all about saving the sinking practice.
There are many reasons a practice might be performing poorly or failing, but they tend to fall into two general categories; namely, internal and external. Whatever the cause, it is essential to find out what is going on and why revenue is down.
The internal factors include everything related to infrastructure. These include structural issues such as poor building maintenance, local construction that makes getting to your office difficult, an office that needs updating, or an out-of-date phone system.
Infrastructure also includes staff issues. Unrecognized poor morale is often brushed over, but it is far more important than many doctors think. A bad vibe in the office is infectious and spreads to staff and patients alike.
Poor staff interaction with patients can also cause you to lose money. Did you recently lose a staff member who was loved? Sometimes patents will resist any change in the office routine.
You should run a full check of your office systems and functions such as front desk, booking of appointments, recalls and follow-ups, as well as the time patients spend on the phone or in the waiting room.
Review your billing and collections stats. Hopefully you have been doing this at least monthly, and there should be no surprises. As I’ve mentioned before, these stats can help you to spot trends before a downward trend turns into a downward spiral.
Another cause of decreased revenue is what I call “overhead creep.” This refers to the slow and relentless increase in overhead that occurs over time, usually over a number of years. The increase in the cost chiropractic practices face mirrors the cost of living increases your patients experience. It’s a one-two punch; everything is costing you more in your business, and fewer patients can afford your fees.
If you are thinking of raising your fees, a careful review is in order. Your patients are likely struggling to pay your current rates, and an increase will likely create more no-shows.
For feedback on how your patients will receive a fee increase, consult your office manager and front desk personnel.
Medicare and private payers raising your fees can get you in trouble because they set the fees and the conditions of reimbursement.
These internal issues share one characteristic: they are usually fixable and mostly under your control. It may take a while, but eventually the problem can be resolved without making major expensive changes.
Unfortunately, in the present healthcare arena, most cases of practice underperformance and failure are not due to internal causes. It’s the external factors that are causing the pain.
There are two main types of external causes, which serve as your bread-and-butter codes. Increased deductibles and insurance premiums that affect the patient’s ability to pay you are the first type, and decreasing coverage for codes that you bill for routinely are the second.
Changes in coverage can wipe out a huge portion of your practice’s income. Fixing these external problems require you to become less dependent on third-party payments and begin to build up whatever cash- based services you can realistically add to your practice.
The cash services that will work best for your practice depend on your office and location and your patient demographic. Consider these questions: Do you have enough space to add the new service? Is your office nice enough to attract and retain the target patients you want to attract?
Does your location contain the right patient mix for the new cash-based services? You also want to have a good handle on the competition and what they are charging.
There is a cash-based service that can be fitted into just about every practice. Don’t let fear of change or your unfamiliarity with the prospective new service deter you. These are difficult times, but failure to act can be lethal.
Marc H. Sencer, MD, is the president of MDs for DCs, which provides intensive one-on-one training, medical staffing, and ongoing practice management support to chiropractic integrated practices. He can be contacted at 800-916-1462 or through mdsfordcs.com.