How to solve a genuine practice-building paradox
“We are So busy, that, sometimes, we don’t even stop for lunch,” a doctor recently told one of our advisors.
“Then, why do you complain that you’re not taking home as much money as you think you should, and why do you often have trouble paying your bills?” the advisor questioned.
“I don’t know why, and I certainly don’t have time to figure it out!” the doctor exclaimed.
Yet another classic case of confusing being busy with being financially successful. It’s a genuine practice-building paradox as the doctors who tell us, “My practice has consumed my life, and I need to take it back,” or, “I have to get off this treadmill,” often experience financial difficulties.
THE SHIFT TO BEING BUSY
The reason is clear. The business focus of these doctors has slowly and insidiously shifted away from a goal of being profitable to being busy. Simply seeing patients doesn’t make you profitable or pay the bills. The most non-mercenary, easiest way I can say it is this: What makes you profitable is making and keeping more money. What pays the bills and generates profits? Higher numbers of dollars, not higher numbers of patients. Period. And until those busy doctors recalibrate to focus on the profit count vs. patient count prize, they will continue to struggle.
A PROFITABLE SOLUTION
Here are eight steps those doctors can take to essentially work less and make more.
- Acknowledge the problem, and commit to fixing it. Saying you’re too busy to fix a problem like this is the same as saying, “I’m too busy to make more money.” What’s happening is that you’re too busy doing things that don’t make you money. Once you acknowledge that, you can go to the next step.
- Determine where your highest source of per-patient profit (not gross revenue) comes from. This step is critical before going any further. And even if you “don’t have any time,” it’s imperative that you calculate this. Start with demographic data, such as age and gender, then geographic data, such as zip codes. While it’s likely that most of your total patient base comes from your immediate zip code, your most profitable patients may come from elsewhere.
- Look for employers and any related insurance plans or common referral sources.
- Look for common clinical conditions and their associated solutions.
- Cross-reference steps 2, 3 and 4 to arrive at a composite of your practice’s high-profit patient. It may read something like, “Presbyopic females who live in Smalltown are between the ages of 45 and 54, work at ComputersRUs, had insurance plan ABC, bought a second pair of computer glasses with XYZ filters and provided an average per-patient revenue of $614 with a gross profit of $351.”
- Determine how many patients over what time period fall into this particular category. For example, “We saw 118 of these patients in the last six months.”
- Determine the average gross profit of all your other patients. For example, instead of $351, let’s say it’s $234.
- Target your high-profit group of patients, and set appropriate time-stamped goals. The previous knowledge you acquired allows for this. During the time it takes to do this work, you also know that should you lose four average-profiting ($234) patients, you’ll need to get only three of the $351 patients to increase your gross profit. You have, in effect, made yourself one-fourth less busy and at the same time, improved your profitability. OM