Providers leaving their private practices
In 2008, 62% of healthcare providers were independent. Now there are less than 33%. That means about half of the providers left their private practices for larger institutions and organizations.
That’s a big drop! Why did they leave their practices? They couldn’t have all retired.
Well you can probably guess it. All of the administrative hassles that providers deal with isn’t exactly what they signed up for when they went to school. Healthcare professionals aren’t trained to run a business, and wearing the business owner or manager hat can be an overwhelming role.
I speak with healthcare providers everyday, who vent to me their problems with billing and other financial matters. The non-stop denials from insurance payers. The ongoing struggle to keep up with new regulations and quality reporting. The long hours they spend going through headache paperwork, dealing with software issues, yeah you know what I mean….
Healthcare has become a confusing game but joining larger facilities isn’t the answer. Working at a hospital takes away a lot of your autonomy as a healthcare provider. You’re just signing up for a schedule with no flexibility and a false sense of job security. It’s not like you’ll be doing less work. I’ve seen it first hand. Healthcare providers often have to do even more administrative work when they join the larger organizations. This is because these organizations have a stricter protocol for compliance that they have to fulfill.
Private practices are better for the market. Whether you’re a capitalist or socialist, you can’t deny that we have a monopoly problem that’s developed in healthcare over the past two decades.
Throw in the towel on your hassles, not your practice
Providers need to be focusing on the one important thing, their patients. Don’t throw in the towel on your practice! Throw in the towel on your hassles.
In all of my articles, I address matters that can educate providers to be better business owners. In this article, I’m going to tell you how to shave off some of your biggest problems.
And believe it or not, this starts with your patients.
Quality vs. Quantity
Some practices seem to have the goal of high volume. But high volume doesn’t mean high income.
Here’s an example of two doctors in the same city that have a very different structure to their operations regarding patients.
Dr. Smith and Dr. Greene are both profitable providers. They’ve been practicing for the same amount of time, with very similar experience.
The big difference is that I’ve seen Dr. Smith work three times the hours as Dr. Greene. Dr. Smith has triple the staff as Dr. Greene. Dr. Smith has a much higher volume of patients. He’s so packed with appointments that he has another doctor working under him to help out.
Yet the interesting thing is that Dr. Greene, being less busy, having less patients, and even having less staff, makes a little bit more income than Dr. Smith.
I didn’t believe it at first. Something had to be off. But when I began looking over their finances, I saw that Dr. Smith had a huge variety of insurance payers. A good portion of Dr. Smith’s patients had low paying insurance plans – often paying nothing at all. Yet, many of these patients were a lot of work. All of the pre-authorizations, the lack of deductibles being paid – It was obvious why Dr. Smith needed so much staff.
I began to see that Dr. Smith was great at bringing in new patients. His salesmanship was phenomenal and he made getting referrals look easy. His big problem, however, is that he’d take anybody. He often treated patients who had been in car accidents when it turned out there was no personal injury protection or liability to bill. No coverage at all – only to figure this out when the EOB denial arrived, after the patient had already been seen five times.
Dr. Greene on the other hand, did not work for free. He made sure that before receiving treatment, a thorough eligibility check was done to assure coverage was available. Dr. Greene was also great at marketing. But he didn’t just market to everyone like Dr. Smith. His strategies were more specific, targeting a type of patient who was motivated to heal, was responsible to show up for appointments, and had an insurance payer with promising coverage.
I also noticed that Dr. Greene’s retention was way better than that of Dr. Smith. Dr. Greene had time to sit down and talk things over with patients, answer their questions, and ultimately make them feel valued. Dr. Smith was quick about his procedures. He made sure his associate doctor was working fast and efficient too. He often put unrealistic time limits on each appointment to make sure he was moving fast. As I looked over the reviews for Dr. Smith’s practice, I noticed that he received a lot of negative feedback from patients. Many commented that they felt rushed, and that they didn’t get the time of day to go over anything they were concerned about.
Dr. Greene had patients he’d been seeing for years. Dr. Smith was lucky if his patients stuck around for a month or two.
Find your deal patient demographic
Okay, so it’s obvious that Dr. Smith has some things to work on. Especially his patient onboarding. Though I can sympathize with him feeling rushed. He is overburdened with work and doesn’t make the kind of money that he should for the amount of work he does. Like many providers, Dr. Smith needs more time and less administrative hassles so he can focus on his patients more. The root of Dr. Smith’s problems isn’t necessarily his behavior, it’s the demographic of patients that he deals with. And that starts with the way he’s marketing.
Not all of your patients are really easy to work with are they? Wouldn’t you love your job more if you could take your top 50 ideal patients and multiply them?
Pareto's Law
This is where the 80-20 rule comes in to play, also known as Pareto’s law.
The 80-20 rule entails that 80% of the profits come from 20% of your time and effort. Likewise, 20% of your hassle patients create 80% of your problems, or take 80% of your time and effort.
Drop Hassle Patients to Retain your Good Patients
Would I dare you to drop patients? Yes! Absolutely! There is such thing as hassle patients. These are the patients who don’t note your advice to take care of themselves, they don’t pay you their copays or deductibles that they owe. They are always calling in with issues and you or your staff can’t seem to do anything right for them. They’re occasional no-shows.
I know doctors that have helped patients long-term for free. Sometimes because they can’t afford the treatment, their insurance won’t cover it, or maybe the doctor isn’t in-network -thus back to coverage issues. All this because the provider feels bad for the patient and doesn’t have the heart to let them go. I’m strongly against free treatment on a long-term basis. This is because patients don’t put in their part when something is free. If someone wants healing, then they will only make an effort when it requires them to pay for it. Yes there are exceptions, but generally, that’s unfortunately how it is. Put a price on your services and you will be perceived for the value that you’re worth.
Your Quality of Work Life Matters
Okay let’s pause. To some, I may sound like a hungry, business guy who only cares about patients who bring in profitability and that money is the only thing that matters. If I sound that way, then you’re missing the entire point of the article. Remember the doctors that left their private practice because things became too difficult? Yeah, that’s going to become you if you’re handling things like Dr. Smith. Providers should not be sacrificing their sanity to help others. You cannot help people if you’re trying to help everyone. Sometimes you need to put yourself first. You need to market smart and selectively because some patients come with this baggage called insurance that can make your work life hell.
Start cutting out the insurance payers that are giving you and your staff nightmares. If a patient wants your treatment but has a nightmare for insurance, kindly tell them you no longer work with their insurance and offer a cash plan that entails automated charges to their account. If that doesn’t work, politely refer the patient to another specialist who doesn’t mind.
As for your current patients, whether it’s the patient or the insurance, begin dropping the ones who are high maintenance and bring you hassles. Do this carefully to avoid a wave of bad reviews retaliating you. Again, telling them that you’re simply not able to work with their insurance anymore is the best way to do this. If that excuse doesn’t fly, I’m sure you can come up with something that won’t be offensive.
Focus on Retaining and Growing Ideal Patient Volume
Next, focus on your ideal patients. See what you can do to improve retention with them.
Lastly, begin marketing to a demographic that you know will come with less baggage. Enjoy your profession again and put your energy where it belongs.
Here’s a basic strategy where you can target your ideal patients. Look over your current insurance payers and select the top three that are paying the most and giving you the least grief. Now list your patients who carry those insurance payers. Next time you see each of them, ask them what work colleagues they have that would benefit from your treatment. Ask them what family they have that would benefit from your treatment. Request their colleague and family’s contact info and make some outreach invitations via mail, email or phone – whatever you’re comfortable with.
If you’re comfortable as a public speaker, request their supervisors’ contact information and offer the employees a free, unbiased health presentation. Now you’re in touch with a demographic that carries the same insurance payer that you like to work with.
For more marketing content and resources, check out my Marketing Strategies article.
There are plenty of other common problems that you might be dealing with in your practice. Listen to my other articles where I’ll address such issues and show you how to tackle them.
If you feel like you need some extra help, request a consultation via my website, businesshealthsmarts.com, and we’ll push through your obstacles together.
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