In order to successfully navigate the ins and outs of necessities like insurance, technology solutions, and HIPAA compliance, medical practices benefit from establishing a solid growth plan. In the absence of a quality growth plan, practices risk significant loss of revenue, medical professionals, and patients. According to Eye Centers of Tennessee (ECOTN) CEO Ray Mays, many physicians make the critical error of viewing their practice strictly as a medical practice and not as a business. Viewing a medical practice through a business lens leads to streamlined processes, an increase in patients, and ultimately, a profit growth.
Work On, Not In, Your Business
Mays suggests that physicians work on their business rather than in their business. By taking a step back and examining their medical practice, physicians have a better view of both potential problems and potential opportunities. Upon spotting an area that requires changes, physicians must be sure to base those changes on a solid foundation. Mays uses the example of a physician who wants to boost revenue when uncovering extra time in their schedule to see additional patients. This physician must recognize the many implications tied to this change, like those associated with insurance, billing, staffing, and scheduling. Not doing so puts the practice at risk of losing staff, patients, and thus, revenue.
The Friction Coefficient
According to Mays, another helpful intentional growth tactic for a medical practice is a focus on staying ahead of the friction coefficient, which states that the square of the number of people in a particular task equals that tasks level of difficulty. In other words, when six people are involved in an office scenario, there are six mindsets and opinions in the mix. This results in a friction coefficient of 36—evidence of the increased number of complications that can arise when more people are involved. As such, it is crucial to the growth of a medical practice that physicians both establish standard operating procedures and ensure that all parties involved understand those procedures. Failure to do so could result in lost revenue.
Monitoring Cash Flow
Physicians often make the critical error of failing to monitor cash flow. Effective strategies geared toward intentional revenue growth require understanding the practice’s cash flow, revenue projections, and how business operations are affected by cash flow. Rays provides the example of a practice that wants to increase its number of patients, noting that the practice must take a number of issues into account before making the change. The practice must make sure, for instance, that it is receiving payments from current patients and that it has the appropriate staff to handle additional processing work and accounts receivable logistics.
Another crucial element is staying on top of any potential legal complications, as they can be quite costly. According to Mays, the more employees a practice maintains, the more opportunities for legal complications may arise. He recommends that medical practices secure a competent, knowledgeable attorney within their team to safeguard against potential loses.