To share or not to share

One of the most frequent questions I get from owner doctors relates to whether or not critical information should be shared with staff.  The argument usually goes something along the lines of the following: “If I show my income statement to my office manager – who is making $20 per hour—and they see that the net profit in the practice is $250,000, they’ll wonder why I am making $250,000 per year while they are making $40,000.  I’ll either get constant requests for a raise or I’ll have to replace my office manager.”  

On the other hand, you can’t expect a manager or key person to make important decisions for your practice while flying blind.  If you ask a person to handle your purchasing, you cannot reasonably expect a person to buy supplies without knowing the budget, historical spending or important product costs.  If you make decisions without information, you’re pretty much asking for bad decisions.  Also, if you are too guarded with information, the people in the office may think you are hiding something shady.  

Here are some guidelines for information sharing:

4 warnings signs for a failing practice

One of the easiest things to identify from the outside is a struggling practice.  You can look at the numbers and see declines in revenue, new patients, net patient outflows, etc. from month to month and see that things aren’t as they should be.

One of the hardest things to do is to identify that practice while you are in the middle of the storm running the practice.  Oftentimes, an owner will not seek help until it’s way too late.  The last patient has walked out the door and the bank account balance has more numbers after the decimal place than before it.  

Over the years, we’ve heard a number of repeated phrases from owners in denial or with a rather Pollyanna view of the future.  Here are some of them.  If you hear them or find yourself saying them, you might want to review things more closely or seek some further assistance (we’re here to provide that assistance if you wish).

Getting patients to show up: the scheduling solution

We’ve discussed the importance of shortening the time from patient call to appointment in order to improve the rate at which patients show up for appointments.  Without requiring you to read the whole article, let me give you a quick summary.  The prime opportunity to get to show up for a new patient appointment comes within the first 7 days after the call.  After the first 7 days, the chances for a patient to show up fall off and after 14 days, the show up percentage drops precipitously. 

As some evidence of this, I’d like to present the case of an office in a city that shall remain nameless, but is within spitting distance of the happiest place on earth.  In 2013, the office had patients showing up at a nice rate: 72%.  In other words, of every 10 patients that made a new patient appointment, more than 7 of them actually showed up for that appointment.  On average, patients waited 10 days from the time of call to their appointment.  Not a bad rate at all.

In February of this year, things changed.  The show up rate fell from 72% to 50%.  The average wait time from call to appointment ballooned to 25 days.  Of the 148 consultations appointed, 98 of those patients had to wait at least 3 weeks for an appointment.  In this “now” society, 3 weeks leaves plenty of time for a patient to find another option or to fill up their schedule so that a new patient consultation gets pushed back.  Clearly, a result of the drop in show up rate, new patient closings fell off as well.  What happened?

Our summer special offer

Over the last year, we've talked about our offer of services in generic terms.  This was done intentionally simply because different practices have different needs and one size does not fit all.  A large group practice in need of reporting has a completely different set of needs than a single office practice that only has enough cash to last one more month.  But this flies in the face of the advice that we've given which says to provide a concrete offer that a patient can evaluate on his or her own terms.

So, in keeping with our own advice, here's a specific, concrete offer for you (if interested, just e-mail us at bpalmisano2@gmail.com).

Where we think we can be of most value is in improving results in struggling practices.  For these practices, we will come in, visit with you and your team, analyze numbers, find the weak areas, apply our expertise and work with you to implement solutions.  Our history is not to come in firing people (unless necessary) or asking you to spend a bunch of money that you might not have.

If the office has less than $60,000 of annual profit (per office) before owner pay, debt service and personal expenses, our services are free.  If the practice grows past the $60,000 threshold, we will take 25% of the growth only.  So, if the practice grows to $100,000 in annual profit, the $40,000 of excess profit ($100,000 - $60,000) is subject to a fee.  We would take a fee of $10,000, while you enjoy the 75% of growth.  This fee is computed and paid quarterly.

Practice rescue: the nightmare dissapates

So, there we were, in a beautiful, fully staffed, heavily advertised, yet almost empty, office.  And we had our data showing a 4.5% conversion rate which was heavily driven by the fact that only 20.2% of patients showed up for their appointments.

Now, when it comes to getting patients to show up for their appointments, a number of different options emerge.  Some experts will advise you to offer something to patients to entice them to show up (a gift, a chance to win something, etc.).  Others say that you shouldn’t give something away when patients should already be fulfilling commitments made to show up.  Others have specific guidance on when and how to contact patients.  As a more general rule of thumb, find a system that you think will provide the best possible customer service, implement it and monitor it.  

In this case, we simply wanted the office to have a system of some kind to follow up on consultations.  They had none.  We asked that the office take 3 simple steps:

Practice rescue: the nightmare opening

Our next story delves into what I consider to be a practice’s worst nightmare.  Here’s the basic situation: a practice puts big money into a great location, builds out that location with no expense spared, spends big dollars on a high profile marketing campaign, opens the doors and…crickets.  You can see the visual right? Nothing but tumbleweed rolling by the office.

We had this very case in a fine Midwestern city. A brand new strip mail had opened up and this practice had put a gorgeous new 4,000 square foot orthodontic and general dental practice in there.  The initial marketing campaign was strong with TV ads, a nice price promotion, radio promos and a semi-formal grand opening (one can only assume that the champagne was Korbel).  With 8 operatories, this place was ready for the flood of patients that would surely be on the way.  

Except that there was no flood, or a nice stream or even a small babbling brook.  The practice had 0 new patients in month 1, 1 in month 2 and 2 in month 3.  Not exactly a rousing start.  On top of that, the practice was fully staffed anticipating a great start so costs were substantially higher than one with a more modest opening.

Practice rescue: Bringing the patients back

When we last left our story, we had a problem with the front desk staff turning off patients by being dismissive and generally unpleasant.  The doctor was busy in the back trying to treat patients and tended to steer clear of the front desk in his quest to provide the best patient care possible.

Very clearly, our first task was to address these individuals who probably had skills applicable to other areas, but it appeared that making folks feel at home was not one of those skills.  Seemingly, the most obvious solution would be to simply terminate these 3 people and replace them with others who had more of a friendly demeanor about them.  

As a general rule, I do not enjoy firing people nor do I ever look to that as a first solution to a problem.  Personally, I've been fired without having the chance to make a situation right, and it sucks.  In addition, these people had experience in the practice and may have had skills applicable elsewhere.  We’ve dealt with a number of staff people who aren’t the super friendly type when patients walk in the door, but may be absolute superstars when it comes to financial, technological or receivables matters.  That should definitely be explored.

The conversation with the front desk staff began very frankly with a discussion of what we had heard and observed within the office.  That was followed by the standard denials and pushback.  That’s never an issue.  No one likes to hear that they are considered to be the source of a problem, but once we let the dust settle a bit, we were able to get into a discussion of the problems.

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