How to fight back against rising wages, a shrinking labor market and inflation with these growth levers
Inflation cuts into your employees’ pocketbooks, which means they need more money to maintain their quality of life. Inflation cuts into your patient’s pocketbooks, leaving them less money to pay for your services. Why must you hedge with your own cash growth levers for rising wages in the future?
- Fewer people are looking to work
- Inflation is getting worse
With fewer people in the labor force, other businesses pay more to retain good people. Many larger corporations can offer benefits that smaller companies cannot afford. Continue tightening up your business and focus on boosting your profitability and streamlining your processes.
Shiny object syndrome
Years ago, a business mentor diagnosed me with “Shiny Object Syndrome” because we had so many services that weren’t complimentary, and I found that 80% of my problems came from 20% of our revenue. For example, we dabbled in aesthetic procedures, clinical trials, and other unrelated items to our pain-relief services. But, since we didn’t do them regularly, it was cumbersome to deliver those services, and it took our focus off our leading service, which was pain relief or wellness visits.
After a couple of tough conversations with my spouse, we decided to start trimming services, and we noticed our profits increased. Our team was also happier because they shined when working on our core services.
I didn’t stop there because we continued trimming services; we also started cutting insurances we accepted, and the attorneys we worked with. Every month we made lists of things we should stop doing, continue doing, or start doing. We had previously mapped out all our processes for our old business, sat with everyone involved, and began eliminating steps in our process.
Office automation and recognizing your cash growth levers
We also took our repetitive, low-value tasks and started automating them. I worked with a tech consultant and a software engineer which eventually led to creating software that we offer to doctors around the country.
Sometimes we get busy doing things and forget to sit back and think about our business and think about what we are great at doing. What would you do if you only got paid on an outcome? What do you love to do, and are there enough of those types of patients in your area?
Once you figure out what your core service is and what you stand for, it’s easy to make business decisions based on that. Then I look at the different cash growth levers in my business. What are the cash growth levers in your business?
- Increase your dollar-per-visit average — what can you raise your prices on? What is a congruent upsell in your business? Weight loss is congruent for musculoskeletal patients because fat creates inflammation and increases joint pain. Look at your existing patients and collect more per visit; can you find more patients like this?
- Increase your volume — if you deliver more services per day, you’ll generate more revenue. If you block schedule your patients after they start a treatment plan, it fills your schedule. If you schedule every patient for their next visit when they arrive, it prevents them from leaving the office without a future visit. You’ll get more volume if you convert more new patients into treatment plans. You’ll have more volume if you convert more active care patients into wellness care. If you think you’re at capacity, maybe you’re not because streamlining your initial visit, examinations, treatment times usually can be simplified in most offices.
- Reduce your accounts receivable — we always priced our services for the next day to ensure that we collected from every patient before receiving the service. Have regular meetings with your insurance department and personal injury team to ensure you collect the services you are delivering.
- Reduce your operating costs — labor is one of the bigger expenses for most offices; your team should focus on their most productive tasks. Too often there is no directive from the leadership team on the most important tasks; each team member should know what they were hired to accomplish and how success is measured. When I was in practice, each team member knew their job and what statistics they were measured on. They had various reports they ran and multiple spreadsheets they used to manage patients. As we grew, I saw the need to automate this and developed a software that took data from our EHR/EMR to automate specific tasks and showed them which patients they should follow-up with that day. This allowed them to be productive in between patients.
- Reduce your inventory and unfinished projects — Inventory on the shelf is an expense; try to keep this at a minimum. Unfinished projects are also expensive; this is why you should only focus on a few projects at a time because until your project is complete, your business will not reap the rewards of your work.
Free-up your front desk
I also found that the front desk spent too much time answering the phone, which seems counterintuitive.
We added online scheduling for new and existing patients, which helped reduce many calls. At the end of our voice mail, we also had a message that said, “For a quicker response, please text.” Before changing the voicemail to this, we would have patients calling back rather than leaving a voicemail. Many of the calls were about moving an appointment or informing our office the patient was running behind. With text, this reduces the time on the phone, and we would reschedule the patient directly or provide a link to pick a time.
If your front desk spends less time answering the phone, they can spend more time with patients in your office or reaching out to patients who haven’t been in for a while. Sometimes you can reduce cost by outsourcing things previously performed by your team that isn’t in their specialty.
Just because you have staff to get work done doesn’t mean that it is a good use of their time. This is why it’s essential to know your core services and each person’s role in your business. Don’t confuse activity with accomplishment, and you should know what your people are working on. In my old office, I found that staff members were working on things that didn’t move the needle, and if I didn’t meet with them one-on-one to discover this, they would have continued wasting time.
These are high-level concepts, but if you review these five cash growth levers for your practice, you will put it in a stronger position by the end of the year.
NAOTA HASHIMOTO, DC is the co-founder of TrackStat, a practice automation software that integrates with your EHR/EMR to get the most out of your practice. He can be reached at support@trackstat.org.
