Current economic news in most communities is anything but positive. Business and consumer spending have declined. The housing market is in shambles with values well below previous levels. Retirement fund values have plummeted as the stock market has plunged.
It has often been said that healthcare providers are "recession resistant" because people keep getting sick. While there is some truth to that statement, experienced physicians and managers know that a downturn in the local economy does, indeed affect individual medical practices. These veterans of previous economic downturns implement a few simple tactics to help weather the storm.
First, tough economic times are a reminder that the complex business of healthcare depends on referrals. Primary care practices are dependent on word-of-mouth referrals from existing patients to grow and maintain adequate new patient volume - the basis for a healthy practice. Specialty physicians are dependent on primary care providers for patient referrals - the lifeblood of a specialty practice. Maintaining the flow of referrals is critical in tough economic times. Enhancing the patient service experience and improving accessibility to primary care providers are critical tactics for every physician and practice manager.
Second, we must be particularly sensitive to increasing the productivity of our current human resources. We must ensure that physicians spend most of their workday in the examination room or the operating room, doing what only physicians can do, rather than in activities that could be completed by others and reviewed/signed by the physician. Clinical assistants should be focused first, on providing high quality clinical care and caring to our patients and, second, on managing the productivity of our physicians in the office setting. We may even need to hire an extra clinical assistant to manage back office telephone issues.
Receptionists should be allowed to receive patients and ensure the proper service experience. Other activities should be delegated, even if that means hiring an additional $15 per hour clinical assistant or clerk to make our $100 per hour physician more effective. This approach, called "Highest and Best Use Staffing," is particularly important during difficult economic times, when revenues are not as plentiful.
Third, like other businesses, physicians and their managers should collect cash. Now is a good time to tune up the revenue cycle process, which starts with effective data verification and point-of-service collections (including copayments and patient-due balances). Physicians should review coding patterns to make sure they are consistent with correct CPT definitions and supported by adequate documentation. Managers should make sure that claims are being processed efficiently and rejections worked expeditiously.
We should work politely and diligently with customers who have patient due balances to ensure that they continue to pay for the services they receive. If patients cannot pay the full amount, payment plans should be encouraged.
Fourth, engaging support staff members in conserving cash is a critical tactic for tough economic times. Staff members can help control expenditures, including incurring overtime. Most employees are happy to protect their jobs by working smarter and harder if we ask for their help. As always, strategies that drive additional volumes and revenue are the most important in the medical practice business. We cannot cost-cut our way to success. Paying extra attention to our patients and referring physicians, providing our services efficiently, collecting our receivables and engaging our support staff in managing costs are great tactics in the best of times and even more critical when the economy stumbles.