Published - June 2006

By Dave Jakielo, CHBME

PROFITABILITY LEAKS: Three Suggestions for Putting in the Plug

As the late Senator Everett Dirksen once said, “A billion here, a billion there, pretty soon you’re talking real money.” Change the word billion to a hundred and the premise applies to our business and personal lives.

In today’s environment the majority of medical practices and the businesses that support them are facing declining revenues and rising expenses. If we don’t tighten up our business practices, we may all be looking for new career opportunities.

An important concept relating to profitability is that when we reduce our expenditures by a dollar, that dollar goes right to the bottom line. A dollar of additional revenue, however, has only an incremental effect. So why is it we put such an emphasis on growing revenue, but so little effort relating to reducing expenses? Only you can answer that question for yourself; however, I would like to share some ideas that could improve your profitability.

Staffing for Success
The largest expense in any business is personnel. Staffing appropriately provides the biggest opportunity to improve profitability. I often hear managers complain about their staffs, but I don’t see them committing the effort to improve their team members. Here are two suggestions for improvement:

  • Avoid people with negative attitudes. One person with a negative attitude can disrupt a department or poison the entire environment. Inform your staff that they have two choices, they can be positive or neutral, but being negative day in and day out will cause you to have to free them up for other opportunities.
  • When you fire a negative person, two benefits occur: 1) the individual is no longer contaminating your office, and 2) he or she is now making your competitors office a miserable place to work. Remember, having the proper attitude is more important than having the proper skills. Skills can be learned but attitudes can only be changed by the individual.

  • Train, train, and train some more. I know people who claim they have 20 years experience in a particular field but upon further investigation it turns out that they have one year of experience 20 times. Seems they stopped learning the day they received their first paycheck. One common excuse I hear as to why managers don’t have regimented training programs is, “I no sooner get employees trained than they leave.” So the alternative is better—don’t train and they stay?

Personal Technology
Many profit leaks are due to the ever changing technology environment, particularly on an individual level. Written policies should be in place to deal with the personal use of cell phones, e-mail, and the Internet—three areas that weren’t even a concern a few years ago. Without guidelines and expectations people may feel that anything goes. What goes is your profit.

During normal working hours I have observed a payment clerk using the Internet to gamble offshore and employees talking on their personal cell phones to friends while the office phone was ringing off the hook. Unfortunately, I’ve encountered more than one staff member using e-mail to pass around inappropriate sexist and racist jokes and messages.

The advantage or curse of easier and quicker communication tools also means that we need mechanisms to monitor their usage to ensure compliance with company policies. The lost productivity due to technology abuse can never be recaptured, and it’s not fair to employees who are conscientious and hardworking to have to pick up the additional work load from the slackers.

Office Technology As Charles Mingus once said, “Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creative.” Simplification through technology can streamline various office processes. For example, in these wired times, we should all be using technology to:

  • Post payments we receive from major payers electronically.
  • Import demographic information into our systems from hospitals that have already gathered and input the data.
  • Scan documents for retrieval and storage

However, don’t become bedazzled by the latest and greatest office technology toy. One of my many mantras is, “There is nothing worse than doing something efficiently that should not be done at all.” Take time to examine every function to see if it really is necessary. You may need Plain Jane systems without the fancy bells and whistles. Don’t buy what you don’t need.

Dave Jakielo, CHBME, is an International Speaker, Consultant and Author and is celebrating his 11th year as President of Seminars & Consulting. Dave is past president of Healthcare Billing and Management Association and the National Speakers Association Pittsburgh Chapter. You can sign up for his FREE weekly Success Tips at Dave can be reached via email phone 412-921-0976.

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