When you want to drive your practice revenue and growth forward, what do you do? If you’re smart – and we know you are! – you’re taking a two-sided approach. It’s not just about doing things right – it’s also about not doing things wrong. With some help from several top industry practice management consultants, we’ve identified three potentially destructive behaviors – “revenue killers” that can cause serious problems and keep you from realizing the full impact of your improvement initiatives.
Mistake #1: Failing to Re-Invest
A practice is a near-living thing in an environment – commercial and medical sales – that changes often. Particularly in the optical, the retail aspects of your practice are subject to influences of popular culture, fashion, and social media. Add to that rapid and abundant changes in technology – equipment and products – then you can clearly see that it takes deliberate focus to stay relevant and appealing to your patient base.
Environment: Stop and look around your dispensary and waiting areas. Check your POP, your frame boards, your counter tops and even your chairs. If your physical environment hasn’t had an update in the last 10 years, it’s been too long, and may be a hindrance to your growth. Your practice has to compete, not just in clinical, but also in retail. Review all of your materials frequently to make sure you’re on-trend, and not looking tired.
Training: Invest the time and resources to keep yourself and your staff up-to-date with advances in technology, ophthalmic science, and product improvements. Technology progresses at an exponential rate, but you have great resources available. Take advantage of training wherever you can find it – trade shows, local society meetings, vendor lunch-and-learns, and internet webinars sources. You may even want to consider leveraging your own team to present their newly-learned skills to the rest of the office.
Make training and skills-refinement a priority and treat your team like professionals. Staff who view their occupations as careers – not just jobs – with advancement and learning opportunities are more likely to provide great care to your patients and lower your rate of employee turnover.
Equipment: Stay on top of equipment options with judicious purchases. It is vital to keep the office and providers well-equipped to provide the best care possible to patients. However, new equipment is typically a significant purchase. You must have a clear understanding of where and how new acquisitions will fit into your patient flow, as well as your practice profit centers. There is a big difference between “must have the latest-greatest” and “this will advance my practice and help my patients.” Make your choices wisely, and have your game plan in place before purchasing.
Mistake #2: Inaccurate, Inefficient Billing
Revenue is always the heart of the matter – maintaining healthy, predictable cash flow is a challenge. Revenue flows from two pools into your practice – patient payments (both private and managed care) and third-party sources. It takes time and effort to acquire an effective understanding of how those two sources work together. If your third-party billing is not filed correctly and efficiently, your practice will feel the impact of delayed or denied payments, and that will trickle down to pretty much everything else.
Ensure that your billers and administrative staff are well-versed and effective in four areas:
- Timely accurate billing to 3rd-party payers;
- Accurate patient billing and collections at time of service;
- Timely receipt and posting – especially line-item posting! – of insurance receipts;
- Rapid re-files on claim denials.
Periodic reviews and self-audits are a must!
Mistake #3: Wrong Product Mix for Managed Care
The right product mix is key, especially in the optical. It’s not just about providing fashionable or popular frames, it’s also about making smart selections that perform well under managed care plans.
High Margin Frames: Investigate the wholesale price points that provide your practice with the maximum return, from both patient responsibility, and reimbursement allowances. Seek out frame options that take full advantage of material co-pays, and maintain a healthy margin between purchase price and compensation. Go a step further, and really organize your merchandising and scripting to help patients perceive the value in their vision care plans, and optimize their frame selections. They will generally be happier with their choices long-term, and your bottom line will benefit.
Bundling Lens Options: Practices that leverage bundled pricing with exceptional patient options just do better in terms of lens revenues and patient satisfaction. Line-by-line receipts with lengthy lists of add-ons can cause anxiety for patients, and may even make them question whether all of their purchases are strictly necessary. On the flipside, if you speak to patients in terms of providing clear, comfortable vision, and skip terms like “add-ons,” they are more likely to focus on the advantages of your eyewear solutions, and find your practice to be a trustworthy resource for their needs. Work on developing good lens packages, and then help your team develop a positive script for patient dialog that helps the patients feel good about their purchases, and doesn’t overwhelm them with insurance and coverage language.
As you consider how to keep your practice moving forward and growing from year-to-year, remember to review both sides of the equation – things you need to start doing, and mistakes to be avoided. Your KPIs (Key Performance Indicators) can help you identify processes that need your attention.