With all the changes happening with healthcare reform, fee schedules and payor rules it’s vital that the practice owner has a clear strategic plan for success.
APTA’s PPS ‘IMPACT’ magazine’s March 2010 issue focused on ‘Out of the Box Thinking’ for the Practice Manager. Systems4PT was asked to write an article applying out of the box thinking to technology.
The article follows.
Following this article is a sample of Systems4PT’s ‘Pennsylvania Roundup’ for 2009. Systems4PT compiles performance averages and benchmarks for each state we work with.
The benefit of the ‘Thinking Out of the Box’ article followed by actual 2009 practice data is this:
PPS IMPACT Magazine, 3/10
Our market is tightening. Overhead/salaries are increasing while payor reimbursements are declining. For the average practice, if overhead increases 5% and reimbursements decline 5% there’s nothing left but red ink.
Savvy practice owners react by watching statistics, squeezing pennies and treating more patients. Increasingly these tactics fail to keep pace. Working in the technology sector, and having been personally associated with over 10,000,000 patient treatments, I’ve observed a new level of ‘outside of the box’ tactics. And these tactics are succeeding.
Using technology to do what you do now on paper, is usually no faster than the paper approach. To create efficiencies, don’t do what you do today on a computer. The key is to eliminate what you do today, with a computer.
Scheduling, billing, writing notes on a computer aren’t good enough. Best practices now integrate all workflows. Computers communicate between departments. Tasks are automated, busywork (and payroll) are cut. Management is more strategic.
Technology isn’t the answer, it’s a tool. The most successful practices leverage integrated technology with three steps: Create efficiencies, then set goals, and then manage by the moment.
At the front desk: Automate: chart prep, patient dropout identification, unapproved POC’s, benefits near exhausting, re-evals due, copay/deductibles due. Eliminate chart filing altogether. Expect to automate about 3 hours of front desk busywork, per day. (based on 40 pts/day volume).
Therapists document at point of care. Improper coding identified, real time - compliance measurably improved. 15% faster than hand written notes.
In the billing office: Automate charge entry, checking codes, adding modifiers, submitting claims. WC/MV attachments submit electronically with claims. Payor adjudication is available in hours. Payments autopost. One billing employee can manage 1,500 patient visits per month – if the busy work is automated.
Expect it to take two to four months to achieve these levels of efficiencies.
Next, jealously focus these freed-up hours on specific, high-yield goals. Focus the front desk staff on copay and deductibles at check in. Increase front desk copay collection from the average, 85% to 90% and net profit increases 120%. (Economics supplied on request).
Cancellations/no shows. 13% is the average cancellation rate. Focus free time on this issue. Reducing patient cancellation rate from 13% to 10% increases net profit by 56%.
Typically about 10% of prescribed visits are not booked. Technology identifies when a plan of care prescribed three visits/week, but the patient is booked for two. Changing this stat from 10% to 6% increases net profit by 8%.
Technology can guide your therapists through PQRI, queuing them on the questions to ask and the codes to submit. The 2% Medicare rebate yields a 7% increase in net profit.
Technology can enable your less experienced therapists to document like your senior clinicians. Patients’ benefit and compliance improves.
Automated reports identify which therapists are most profitable. With your compliance manger’s assistance, leverage technology to enable other therapists to follow these coding techniques. There’s an average 9% discrepancy in payments/visit by therapist.
In the billing office, set the goal that freed-up time is spent calling all unpaid claims. Address automated broken payor promise lists. Insist that (including self pay) < 20% of A.R. is past due. Reducing past due A.R. from 35% of total to 20% will increase free cash by over four months worth of profit.
Marketing: Don’t simply automate referral stats. Quantify pretax profit, by Dr. On average, 35% of referral sources lose money. Shift your marketing emphasis to profitable referral sources vs. losers. Reduce your referrals that lose money from 35% of total to 25% and you will increase net profit by 27%
Internet, yellow pages, seminars, advertising: Measure profit by marketing campaign. Deemphasize the campaigns that don’t pay.
You can’t win if you don’t know the score. Base your strategic decisions on cash, because that’s the stat that matters.
Integrated technology, efficiency and goals will fail to offset tightening market factors without one last component – Managing by the moment.
A friend once said, “To succeed, you must think less like a P.T. and learn to think more like a business owner”. Good management realizes that improving efficiencies is a multi month process. Only then can newfound efficiencies be focused on high yield goals. And then these goals will be realized a fraction of a percentage point at a time over many, many, many months
Technology that works, keeps the manager informed. Data update meetings are eliminated because vital stats are updated real time. The manager succeeds when s/he masters the concept that, “Employees perform to the expectations that you set”. There are no ‘copay meetings’. Copay is discussed four times a day, every day. Everyone has the stats. No place to hide. What get’s measured, improves.
Management reinforces the team, celebrating every tenth of a point gain as if it were nirvana. Every day.
Let’s return to our scenario where costs increase 5% and fee schedules are squeezed by 5%. The practice that makes the changes outlined above, will increase net profit by 62%, (including the 5% cost, 5% reimbursement hits), with no increase in patient volume.
That’s the beauty of ‘out of the box’ thinking: When it’s legitimate, it yields ‘out of the box’ results!
Dan Alloway
Vice President
Systems4PT
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