Making the Most of Your Relationships
Marketing in a revenue cycle management world.
By Sturdy McKee, PT, MPT
Most businesses generate the majority of their revenue from a few customers or clients. I prefer the term client, as it refers to a long-term, ongoing partnership, whereas customer is usually considered transactional. For most of us in physical therapy private practice, those clients are our referring providers. Of course our patients are our clients too, but for the purpose of this article we will stick with referring providers as our focus, and we’re going to look at reports and data about those referring providers to guide our decisions.
From your revenue cycle management (RCM) platform, pull your Referral Revenue Report, or whatever your system can create, that tracks the charges or collected amounts by referring providers. Notice I said revenue report and not number of new patients. By pulling both of these numbers on the same report, and comparing, you can start to ask more informed questions around your relationships and marketing efforts. Now, export your report to Excel. Sort it. Share it with your business partners and have a discussion. Is it what you expected? Did you find any surprises?
The providers at the top of this list obviously like you and your practice. From a business standpoint they have a certain worth. It’s typical to see the top 12 referring providers account for 30 percent or more of a practice’s revenue. And for the next 12 to account for another 10 percent. This is in a practice that has 300-400 referring providers in the course of a year. If you track this metric, what you may learn is that 10 percent of the providers who refer to you account for over 45 percent of your practice’s revenue. If that’s the case, where should you be spending your time? How do you take care of your top 10 percent? And why is that important?
The numbers in the table (below) are “based on a true story.” They are “real” numbers. As you can see, not all are tracked effectively. Some patients don’t have a referring provider assigned. But this is the real world, and you can begin to see some numbers that may affect your future decisions.
Nearly 5 percent of patients do not have a referring provider assigned, which tells us there may be room for process improvement and training to have staff better track where referrals are coming from. But notice that the top doctor refers enough patients to represent over 7 percent of all charges generated by this practice, and the top 3 doctors account for nearly 19 percent. There are 328 referring providers or “doctors” on this list. The top 12 referring providers account for over 32 percent of this practice’s annual revenue. That’s 3.7 percent of the referring providers accounting for more than 30 percent of all charges generated in the course of a year.
If this is the case for your practice, when is the last time you talked to your top 12 referring providers? Did you talk with all of them? What did you talk about, you or them? Is everything okay in their practice and world? Are any of them moving offices? Are any hiring new people? Are they frustrated with their referrals? What are their current challenges? And how can you help?
Oh wait, did you think this was going to be about postcards, seminars, and automation? It’s about relationships. It’s about conversations. It’s about prioritizing your high touch activities. Automated conversations are hard to have and at that point, do you really get to call them conversations? There’s a lot you can automate or create systems around and I urge you to do that. Creating this report is something you may be able to automate. Or you may be able to create a system so someone else can fetch the report, sort it, and share it. But the conversations are yours. Relationships are about people. And it’s our job as owners to take care of those who take care of us. So find out who they are and take care of them—and then find more like them that you can take care of.
Why is this all-important? You are building relationships. When you spend the time to build those relationships, they know you care about them and their patients. You’re opening lines of communication. Having done this, you’re continuing to build trust over time, and this may in itself generate more patient referrals. It may help your biggest fans to talk about you more with their colleagues. On the flip side, it will also help when something goes wrong, like when you get a bad Yelp review, or a patient complains. It means they are more likely to engage you when you let a physical therapist go, or you decide to opt out of a lousy payer contract. This also puts you in a better position to have more meaningful conversations and further advance the relationship.
All of these things will happen if you stay in business long enough. The question is, how will your top referring providers react after you’ve invested time in the relationship?
Take note, all of these things will also happen with your competition. Are they investing in the relationships the way you are? If not, when one of these things happens in their world, what position will you and your practice be in? A position of trust and a solid reputation will help you build your practice, and weather the rough times and mishaps—perhaps better than your competition.
Sturdy McKee, PT, MPT, loves helping physical therapist practice owners achieve their goals. He is cofounder and CEO of ScheduleDoc.co and San Francisco Sport and Spine Physical Therapy. He can be reached at Sturdy@ScheduleDoc.co or @Sturdy on Twitter.