Top of Your Game
Leadership strategies for improving your bottom line.
By Janet Lanham, RN
I have worked in health care for over 30 years, first as a registered nurse, then as an administrator, and ultimately as a revenue cycle management expert. Over the years, running a healthy practice has become increasingly complex and challenging. In the old days (like the 1990s) you opened an office, saw patients, submitted a claim, and got paid. Easy!
Then Medicare decided to introduce Sustainable Growth Rate (SGR), Correct Coding Initiative (CCI), Multiple Procedure Payment Reduction (MPPR), Physician Quality Reporting System (PQRS), and Council for Affordable Quality Healthcare (CAQH) regulations. Each new acronym meant a reduction in reimbursement. As Impact contributor, physical therapist, and business owner Sturdy McKee often says, today’s practice owner must think about working “on the business” as well as “in the business.”
Unfortunately, physical therapists are simply not a “bottom line–oriented” group. In order to achieve financial sustainability—and prosperity—you must change the way you view the revenue-generating, financial part of your professional life.
Over the past three decades, I have observed practices successfully make this shift and prioritize their bottom line. Below are some of their most effective leadership strategies for cultivating a financially healthy practice:
- Protect Your Time: Your time is your most precious, perishable asset. Manage it relentlessly. As part of your time management, make sure that you are spending part of every day working on important, strategic initiatives.
- Delegate the Right Things: Delegate anything that does not require your direct attention.
- Invest in Your Hiring Process: You cannot delegate anything if you have not hired the right team. Invest in recruiting. Consider hiring the right person an investment in your future, and make sure you understand what motivates your team. (It often is not money.)
- Coach for Continuous Improvement: John Woolf, PT, ATC, COMT, of ProActive Physical Therapy in Tucson, meets with his team regularly to review key metrics. They assess what is going well, what is not going well, and identify areas for improvement. John says, “I like to call this ‘watching game film.’ An accurate game film [business metrics in the form of clear reporting] lets us know where we are as a team relative to our goals. Analyzing the game film together helps us generate discussion about the potential root causes of any issues and inspires self-correction.”
He goes on to say “How effective is the football coach who stands on the sidelines during the game and screams: “Block!” “Tackle!” “Catch the ball!” compared with a coach that uses game film and practice effectively so that the players actually feel and understand how to block, tackle, and catch? The football coach who screams from the sidelines is like the manager who tells therapists they should be more productive or do a better job managing their caseload. A great coach will frame it for them, teach them the right moves, and what it looks like after every game. As a team, we all need to see where we are, and how each individual contributed to the result of the team.”
- Integrate Clinical and Financial Data: Health care in general, and physical therapy in particular, is too complex a business to run without an information system that integrates clinical and financial data to provide meaningful practice metrics.
- Measure What Matters: Decide what really matters and measure it routinely. Measuring units per visit may be an important productivity metric, but how important is it if you also have a high cancellation rate or if your patients do not typically complete their plan of care? Make sure that you look at “what matters” holistically before deciding what you are going to measure.
- Focus on Your Patients: Unfortunately, the short-term financial incentives in our fee-for-service system today often do not align with the best interests of our patients. As fee for service is gradually replaced by pay for performance initiatives, the financial incentives should align better with what is best for our patients. Keeping patients’ interests as the focus of managing your practice is critical today, but will become even more critical for your long-term success.
- Know Your Strengths: I often see small practices that “specialize” in everything from pediatrics to sports to geriatrics. Find your true strength, build on it, and excel at it rather than try to be all things to all people.
- Keep It Simple: There are times when less is more. A simple process that is 95 percent effective is much preferable to a complex process that is 96 percent effective.
Using simple systems to manage your time, a few key metrics to gauge your business health, a practical process like John Woolf’s “game film” talks to institute improvements, and a relentless focus on your patients is guaranteed to improve your bottom line.
Janet Lanham, RN, is a vice president of service delivery at Clinicient. She can be reached at email@example.com.