How to increase efficiency, productivity and net profit in a private practice

There is an impression with healthcare practitioners everywhere that all a practice has to do to increase production is to increase the number of new patients. More new patients is often the universal solvent for an under-producing office.

However, attracting new patients is only 1 of 7 areas of a practice that lead to the efficiency, productivity and the overall net of a practice. There are 6 other areas of a practice that a doctor/practice owner can improve on to increase the profitability and gross income of an office without seeing a single increase in new patients. This does not mean that attracting new patients should be ignored, but what it does mean is that the other areas of the practice should be addressed with just as much importance as the new patient area. In order to improve those areas one must, for starters, know what those areas are. Below you will see the basic actions of each of these areas.

Personnel: A practice owner should know how to hire the right staff and know when and how to fire staff that aren’t productive. Holding onto non-compliant and under productive staff, at a time when unemployment is still high in most areas of the country and the employment pool is more qualified that it’s been in 25 years, is both poor management and foolish. A practice owner can learn how to monitor staff productivity and not judge staff on “feelings” or what other people say about certain staff. Learning how to objectively manage is a key to a productive, efficient and happy office. Part of this is knowing how to train staff on their jobs with proper job descriptions. Having known and applied office policy can make a staff operate in a coordinated fashion and work together as a team resulting in higher productivity and morale. How you hire, train, monitor and take care of your staff is the basic concept of this area. Making this area work properly requires good job descriptions and office policies that are known and understood by all staff as well as having effective statistical monitoring systems for all areas of the office, a good internal communication system and good communication skills by those managing the practice.

Treatment: Exams must be comprehensive and relationships must be built in a very limited amount of time. Value must be demonstrated through excellent care and communication by all personnel involved in any aspect of treatment delivery. Five minutes of sincere, honest and meaningful communication is worth more than 30 minutes of superficial chitchat. Treatment must be top notch using up to date methods and equipment. This area is the province of the doctor and where the “Doctor Hat” is worn.

Enrollment: A practice can increase the quality of case presentations and show more value for the services they are delivering through very simple, basic communication and sales skills. There is still plenty of money being spent these days. A practice must be better at showing value than a competitor down the street. A successful practice never makes a patient feel uncomfortable or pressured through poor case presentation and sales skills. Proper case presentation results in patients/clients knowing what they need and wanting the service and willing to look at how to work out the economics of the service needed. Also, having a good recall system and an excellent patient reactivation program can increase a practice’s production by one third or more.

Finance: Firm financial policy, known by all staff and patients/clients, will allow a practice to collect, ideally at the time of treatment, for a service rendered. Sending out timely statements and having good collection procedures is required in this area. Insurance must be filed correctly and in a timely mannered with the appropriate codes and documentation and, if rejected, followed up and handled with re-filing the claim correctly. Office payroll and bill payment, as directed by the Financial Planning, is also handled in this area.

Quality Control: You must have a way of objectively evaluating staff beyond perception and reputation. The analysis, evaluation and correction of all administrative functions and how your staff perform those functions is the essence of this area. This would include how patients view the quality of their experience with your office. Knowledge of practice management and basic business skills is required for running effective quality control in your office.

Executive: This is the area that oversees the operation of the entire practice. It is where the “Practice Owner Hat” (which is very different than the “Doctor Hat”) is worn and where the Office Manager operates from. The primary functions of this area are setting and implementing policy, implementing programs to raise the productivity of the office, seeing to policy and program compliance, financial planning for the operation of the office, future planning, and legal and accounting controls.

Marketing for New Patients: Hopefully you can see from the brief descriptions of the areas noted above that improving each of these areas can increase the efficiency, productivity and the net income of a practice. In fact many of the practices we deal with increase their productivity by addressing those areas prior to addressing increasing new patients.

That being said, practice owners do and will continue to ask questions about how to attract more new patients. Should I upgrade my website, put my picture on a supermarket cart, buy space in the Val-Pack coupon book, get a yellow page ad, write a newsletter, send out magnets and glossy brochures, join the Chamber of Commerce, host study clubs, lecture to the general public, buy newer equipment, or buy radio/TV advertising, pay for yelp, google and facebook ads, are many of the common questions we hear.

Some, none, or a combination of all the above may be appropriate for your office but, throughout the country, nothing has been consistently more effective at building an office than a comprehensive pro-active internal marketing program. It is the easiest and most cost effective marketing activity that any office can undertake. In these tough economic times, it is not enough to wait for your patients to refer their friends and family to you. You must be pro-active about it and create a genuine desire in your patients to refer friends and family without badgering them or seeming “needy”. There are many ways to do this. And getting referrals is just one aspect of internal marketing. There are many, many other cost effective internal marketing tools that can easily increase your number of new patients.

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