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Practice Management

Balancing PatientsÍ Needs and Practice Profitability: Can It Be Done?

By Steve Williams, CPA

Making an effort to deal with each patient as a unique individual would seem to be an investment of time for little tangible return—but such is definitely not the case.

In the highly competitive health care market, there is an increasing correlation between patient service and practice growth. In most geographic markets and medical specialties, it is no longer enough to simply be an effective physician. Patients commonly have many options, and can often choose among several different physicians for the same medical need. Those practices that do a better job at fulfilling patients’ needs are often those that grow at a higher rate, thereby improving profitability. Therefore, medical practices must focus on other aspects of patient service beyond the actual care provided by the physician.

Understanding the entire patient experience is of paramount importance. This runs the gamut from the initial visit to billing and collection. You are in a service business, and you offer an “intangible product” (a service). As the product cannot be touched, every aspect of the service must be rendered from the perspective of the “golden rule”—ie, providing the same high-quality service that you would like to receive. If your practice does this on a consistent basis, in conjunction with strong financial management, it will be rewarded with long-term financial health.

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INITIAL VISIT

The old adage of “You never get a second chance to make a first impression” could not be truer for a medical practice. When patients enter the door, they begin to form an impression of your practice. Ask yourself these questions:

• Is the lobby warm and friendly, or cold and stark?
• Is the receptionist preoccupied or waiting to greet the patient in a friendly manner?
• Are all forms clear and non-repetitive?
• Is the entire process of becoming a new patient clear, concise, and ñuser-friendly?î Or is it confusing, laborious, and overwhelming?
• Do patients have to wait long?
• If the patientÍs visit will be delayed, are they called in advance to warn them and given a new time to come (or offered a time to reschedule)?

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TELEPHONE ETIQUETTE

It may be a surprise to some physicians that a lack of telephone etiquette can be a key factor in a practice with a low patient retention rate. The job of answering the telephone is often viewed as a low-level position within the practice, but nothing could be further from the truth. The employee answering the telephone is the point of first contact for any occasion when a patient calls, so any disrespect or other problems reflect poorly on the entire practice. The patient views these interactions very seriously, and the staff should not underestimate them.

The insufficiency of basic manners and etiquette is a common problem in many health care practices. Although the physician may embrace courtesy and friendliness in patient interactions, the staff may need training in these concepts. This is an area where it never pays to assume that your personnel perform appropriately without training and supervision.

A common slogan for countering this problem is, “We can never be too busy for our patients. Patients are our business.” Consider putting this on a plaque next to every telephone. A happy patient is, in part, a patient who is respected, appreciated, and treated in a courteous manner (see Tips for Telephone Etiquette).

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IN-OFFICE INTERACTIONS

Patients are people, but in some practices, they are treated as numbers. Patients who have no options in the selection of a physician must often tolerate such disrespect. However, for patients who do have a choice, lack of personal respect is sure to reduce patient satisfaction and stunt practice growth. What can you do to improve the in-office patient experience?

• Greet patients by name, from the reception desk to the examination room.
• If patients must wait, apologize for the inconvenience.
• Make waiting less painful. Magazines are one option, but many practices are now providing televisions, board games, or a childrenÍs play area.
• Impress on all staff the importance of treating each patient with genuine kindness and friendliness—regardless of that patient's personality.
• All staff should smile and greet each patient as an important part of the practice.
  
• Develop a personal relationship with each patient.
  
• Thank all patients for coming.

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STRATEGIES

From the patient’s perspective, treatment involves not just the physician encounter, but also includes the initial diagnostics (eg, weigh-in, temperature), instructions on pre-examination preparation (disrobing), and any interaction with a “physician extender” (nurse practitioner, physician assistant). Do not make the mistake of minimizing the impact of any phase of this treatment process. Rude or curt behavior on the part of any staff member can hurt your practice in many ways.

Appropriate staffing requires a fine balance between meeting your patients’ needs and maintaining your practice’s profitability. It is not always easy to determine whether you have adequate, inadequate, or excessive staffing. Having too few or too many workers can actually hurt your practice’s bottom line.

Indicators that your medical staff may be too small include low patient-treatment numbers and new-patient appointments scheduled for 6 or more weeks ahead. Many patients are not willing to wait 6 or more weeks for an appointment. If this occurs, consider adding a nurse practitioner or physician assistant. When deciding whether to hire, determine the physician extender’s salary and your practice’s overhead, and then factor in your desired profit rate. For example, if the extender’s salary is $85,000 and the practice has an overhead of 50% plus an expected profit of 15%, the extender would need to generate more than $146,000 of collections to make the investment worthwhile.

The workflow of patients seeking treatment at your practice has a direct effect on your productivity. For example, medical assistants can coordinate patient flow by setting up examination rooms, preparing patients for examination, recording new patient histories, and assisting in minor procedures. Conversely, too few medical assistants can tie up examination rooms and slow patient visits.

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BILLING AND COLLECTIONS

There are effective and ineffective methods for billing and collections (see Williams S. Collecting by the Numbers. The Female Patient. 2007;32(10):23-26). As with medical staff, employing too few people in this department has a direct impact on your practice’s cash flow and profitability. Financial indicators of billing and collections understaffing include charge entry delays, an increase in accounts receivable, and a decrease in gross collection rates.

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FINANCIAL MONITORING

All patient-relations strategies should be implemented in conjunction with financial planning—specifically, profitability planning (see Williams S. Financial Monitoring for the Health of Your Practice. The Female Patient. 2007;32 (4):26-28). Any investment to improve patient relations—such as fixed asset investments (eg, lobby, equipment) or additional staff—should be preceded by a financial statement projection. Likewise, the impact of these investments should also be analyzed to determine their effect on profitability. As improvements in patient relations are implemented, you should review your financial statements to see how they are reflected in the bottom line.

An income (profit-and-loss) statement details revenues and expenses for a given period. It can be set up to compare previous years or months, so that you can easily identify any variations from a like period in the past. Your balance sheet is more compli­cated, but is essentially a “moment-in-time” view of your financial standing. The balance sheet lists your assets, liabilities (debt), and net worth. A qualified financial analyst can help you to understand the financial health of your practice by employing a variety of tools to gauge economic strengths and weaknesses.

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CONCLUSION

Most of the patient-service concepts presented here do not require much of a financial investment, but they do require a “human investment” in effort and caring. If you and your staff focus on placing the patient first in all activities, take ownership of all mistakes, and show your appreciation for each patient, you will be far ahead of the curve and well on the way to a healthy relationship with your clients. This can greatly improve your profitability. Combined with effective financial management, these measures should produce positive indicators of improvement in practice profitability.

TIPS FOR TELEPHONE ETIQUETTE

Treat every call as an important call. It is important to the patient, so it should be important to you. Answer promptly. Display your alertness and efficiency. Greet the patient pleasantly. Be enthusiastic and sincere. Smile when you talk: it will be apparent to the patient. Identify yourself. Patients like to know to whom they are talking. Use the patient’s name. People like to hear their own name, and it makes the encounter more personal. Screen courteously. Never say “Who’s calling?” Use a phrase such as “May I tell him who is calling?” Don’t trust your memory. If there is a message, write it down. Even if there is no message, make a note of who called and at what time. Convey the message to the intended recipient promptly. Write down the complete message. Patients are not to be treated as an inconvenience. Their message is important to them, and should be of the utmost importance to you. Show courtesy by writing down every detail that they wish. Don’t make promises that cannot be kept. Don’t say “I will have Dr Smith return your call right away” if you cannot guarantee it. The patient may be waiting for Dr Smith’s call before doing something else, and will be upset if the doctor does not call. Use basic phrases of courtesy. Say “please,” “thank you,” and “you are welcome.” Transfer properly. Make sure the patient knows she is being transferred and why. Nothing is more irritating than being endlessly transferred from one extension to another. When you get a call, handle it if you can. If you cannot, tell the patient that you will transfer her promptly to the right party. Explain delays. Do not abandon the patient. In a time when voice mail and other delays are prominent, patients dislike being put on endless “hold.” If you cannot transfer promptly, inform the patient and offer to do what is best for her. Be tactful. When it is necessary to refuse a request because of office policy, give a complete and sympathetic explanation. Try to find another way to solve the problem. Apologize for errors or delays. Be genuinely sorry. Keep your promises. Do everything possible to follow through. End calls pleasantly. Say “thank you for calling” before saying “goodbye.” Allow the patient to hang up first, then place the receiver down gently.

Steve Williams, CPA, is partner in charge of health care services at HMWC CPAs & Business Advisors in Tustin, CA, specializing in consulting services to medical pracÆtices, as well as tax and financial planning. He may be contacted at steve@hmwccpa.com.

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