Staying Afloat in Tough Economic Waters Part 2

So, continuing on with my tale of my little business…I left off describing how ExtraMD ( my local locums company) was going to weather these stormy economic times.  I have noticed a drastic drop in shift requests.  Over the past two years, we have typically had 10 shifts per month unfilled, almost enough for a full time physician.  However, over the last 3 months, I have seen a distinct drop, such that by December we only had 2 shifts that went unfilled.

Scary.

Next, an urgent care cancelled a shift, saying they were so far behind in their receivables, they couldn’t afford any more debt.  We haven’t yet received the money owed for work we did there.

Scarier.

In addition, a large clinic system cancelled over 16 shifts for one month, leaving 4 doctors with out work for February.  They emailed me, saying, “Good news for our clinic…we’ve hired a full time physician, so won’t need coverage.”  Bad news for us.  We do have a 30 day cancellation policy, but the clinic squeaked in at 31 days, so didn’t have to pay the full cancellation fee.

Scariest.

So, what will we do?   How will I find work for my  docs, keep my company afloat and sleep at night?

Here’s my plan:

  1. Calm down.
  2. Send out a post card mailing, advertising a birthday discount.  (ExtraMD is turning 5.)  Something cute and eye catching will be on the postcard,  like a birthday cake.
  3. Email our clients, letting them know we have a birthday  celebration discount going on.
  4. Consider taking  birthday cupcakes to our best customers.
  5. Put an ad in the local medical journals.
  6. Talk to the other physicians in our group about leaving business cards and chatting up the business at practices where they are working.  As the physician owner, I have done all the marketing myself, but hey, it’s worth a try.
  7. Create a press release targeting the local market about ExtraMD’s birthday celebration and discount.  Let practices know that we are a  good interim solution during tough times–it’s cheaper to use us than hire another physician, especially if  a practice isn’t certain it can support another full time physician.

I’ll keep you posted as to the results.  How is YOUR practice doing in these tough times?

What Will You Be Thankful for NEXT Year?

I work with a business coach, aka the EntrepreneurialMD, who is a physician that helps other physicians who want to think outside the box of medicine.  She sent me a list of questions to ponder.  I have edited them somewhat to tailor them strictly to physicians in medical practice.  Following are items to contemplate as you enjoy that last piece of pie, the sip of wine and the companionship that is Thanksgiving.  If you are really motivated, you might even consider writing down the answers.  (You could do that between commercials during football games.)

– What’s your biggest business/professional objective in 2009?

– What are your biggest opportunities right now?

– Where do you see a gap in your “market” –what’s not being offered?

– What do your “people” (patients/practice partners/employees) complain most about?

– Where are you leaving money on the table?

– What are your top 3 time eaters and energy drainers?

– What is your “Biggest Opportunity Project” for 2009?

– What are the top 5 business/career development strategies you’ll focus on?

– How will you know you’ve had a great year?

 

And to all of our brethren working on Thanksgiving, I give a whole hearted thanks and God Bless.  We have all walked in your shoes, and are grateful for all you do.  Happy Thanksgiving!

See www.entrepreneurialmd.com for more.

10 Reasons Your Medical Practice is Failing, and How to Fix It

As the ExtraMD, PookieMD has seen lots of practices.  I have also been asked to evaluate failing practices to see where they got off track.  There are some common themes amongst failing practices.  For once, I will NOT carry on about reimbursement, but rather focus on where the physician owners of these failing practices went wrong. Here are my top ten reasons primary care practices fail:

  1. No budget.  With out fail, every time I have asked failing practices about a budget, I get a vague answer, along the lines of, “Well, we look at the numbers.”  NO!  A budget is not something your book keeper or office manager creates, and then places on a dusty shelf!  You need to look at it as a tool, and analyze where your practice’s money is going, where you want your practice to go, and why you are (or are not) getting there.  You must analyze variances and figure out why they are occurring.  When I say you, I mean YOU!  Yes, you must understand this process to guide your practice/business!
  2. Serious lack of planning.  We physicians are masters at trying to anticipate and forecast what happens with patients.  This same skill MUST be applied to cash flow.  You must forecast your cash flow  so you can plan ahead.  Good examples of bad planning: not anticipating paying your staff for holidays/vacations, not planning for the lost revenues while YOU are on vacation, not planning on HOW you will pay your new partner before s/he is generating enough to cover her salary. 
  3. Huge empty offices.  I worked at one office where one exam room was crammed with free give aways from drug reps.  You couldn’t even use the room.  Yup, pens, cute pedometers, plastic clip boards, heart shaped watches were stuffed into the exam room, rendering it unusable.  Yikes!  Who can afford that?
  4. Top heavy staff.  If you are a small office, you really need to examine how much staff you have, and how much your really use and need.
  5. Buying sprees.  Before you invest in what ever new gizmo you think will earn the big dollars, do a thorough market analysis and cash flow projection.  (Worst example I’ve seen: a gazillion dollar laser that a practice bought but never used!)  Don’t just believe what ever a vendor is telling you.
  6. Investing in an EMR and not using it.   I have worked for 4 different practices that bought EMRs and were too busy to a) use them at all b) wrote notes and then typed them in later, c) persistently scanned notes in.  I’m not kidding.  If you are going to get an EMR, commit!  Realize it will take oodles of time to make it useful, but for Pete’s sake, don’t buy it and have it sit there!
  7. Not putting in the hours.  All of the practices I have been asked to review had physicians that felt like they were working quite hard, but were only putting in 6 hours a day.  Many offices would open at 9:00 am, take a 1.5 hour lunch, and then the office would close at 4:30. 
  8. This is not your father’s practice.  Back in the day, the “GP” hung out his shingle, saw 10  patients a day, gave a shot of penicillin in the behind for everything and perscribed milk for ulcers.  If you think the business of medicine is that simple you are in the wrong profession.  Physicians must understand the complexities of today’s medical/legal/business world.
  9. Poor location/top heavy lease.  It’s tantalyzing to have the medical office suite with the fancy furniture and custom wall hangings etc., but get real.  See #1, BUDGET!
  10. No advisors.  We physicians are smart, but not smart enough to know everything.  The practices I have evaluated typically had physician owners that were trying to do everything themselves, with out utilizing advisor such as bookkeepers, accountants and business attorneys.  You must know enough to understand your advisors, but you also need to trust them to guide you.

If you see your practice here, get busy making changes!  Today’s climate is tough, so we need to get tough in how we run our practices businesses.