Published - November 2008
FROM THE ROAD
By Dave Jakielo
It May Not Be the Economy
"You Just May Need To Sharpen Your Saw"
Well, in case you haven't noticed, the economy has been in the news lately. If you have had enough nerve to open your recent 401K statement, I'll bet you've found your retirement target date has just been pushed back. I know, based on the past few quarters, I now plan to retire five years after I'm dead.
However, there could be a positive side to what's occurring. Tough times offer a perfect opportunity to examine how effectively and efficiently your billing operations are running. When times are good we take things for granted and inefficiencies are often over looked. We neglect to consider that there maybe a need, as Stephen Covey has told us, to "sharpen the saw." Lean times provide an incentive to examine exactly how things are running.
I have mentioned in previous columns that when you save one dollar in costs, that dollar drops directly to your bottom line versus collecting an extra dollar for a client, which only adds incrementally to your revenue.
I realize that collections are important and we must always do an excellent job of collecting the receivables for our clients. But you can improve the overall financial health of your company if you also pay attention to your expenses.
Quick fixes to boost your profitability:
- After scanning documents (and keeping a backup copy of the image file offsite in a secure location), shred them. Don't waste office space storing hard copies. You will eliminate the need to pay file clerks to handle paper that they should not be handling in the first place.
- Consider VoIP, Voice over Internet Protocol, as your phone service. This service has greatly improved over the past few years and may be an option available in your area to reduce your long distance charges.
- Review all payment posters' work on a regular basis to ensure they are not applying contractual adjustments to patient's accounts for payers with whom your client does not participate.
- Limit your patient statements to a maximum of two or three. Sending more increases your cost and drags out the collection/bad debt cycle. More mailings won't lead to better collections.
Slightly longer fixes that are equally important:
- E-mail patient statements. This is known as "electronic presentment." The phone and credit card companies have been doing it for years. Even if your clients pay for their own statements, they will appreciate the cost reduction and it may help further cement your client relationship. If you don't offer this service to your clients, your competitor may use this as a differentiator as to steal your business.
- Solicit ideas from all your employees about how the company could save costs and split a percentage of the savings with the originator of the idea.
- Calculate your client profitability every six months. Important variables, such as patient mix, payer reimbursement, and modalities, change.
- Establish productivity standards for every job function and then track individual productivity. I have found that if an office doesn't monitor productivity, it is usually 20 percent overstaffed, not to mention incurring a hefty overtime bill during "end of month" week.
Suggestions to consider for 2009:
- Establish formal training programs. One of the benefits is that you'll be able to standardize your procedures. Given that your employees probably started at various times and were probably trained by different people, they may not all be on the same page. When you train employees you retain employees.
- Monitor your employees e-mail, phone calls, and internet usage. Without oversight of these areas, productivity can be affected. Employees who play by the rules may resent coworkers who are allowed to "put one over on you."
It may be easy to blame the current economy if your profits start to go south, but there probably are other contributing factors. Examining your operations may allow you to make improvements that can help you reverse the slide. You may find that 2009 ends up being your best year yet. The important thing to keep in mind is not to grow complacent. As Tom Peter's said, "If it ain't broke, break it." I wish you "happy profit hunting."
Dave Jakielo, CHBME, is an international speaker, consultant, executive coach, and author and is president of Seminars & Consulting. Dave is past president of Healthcare Billing and Management Association and the National Speakers Association Pittsburgh Chapter. Sign up for his FREE weekly Success Tips at www.Davespeaks.com. Dave can be reached via email Dave@Davespeaks.com; phone 412/921-0976.