Feel like you’re working ever harder, but still not reaping the financial benefits? Do you have a nagging suspicion that whilst your clinic hours have increased, your net earnings have actually decreased in real terms? You’re by no means alone in feeling this.
Maybe you recognise this scenario:
You started out with good intentions, tried to be thrifty with toner cartridges, and you definitely didn’t make any down payments on a Maserati. Your accountant tells you that by the end of the month, you need to have scraped together £32K for a corporate tax bill, and you experience that slightly sickening, sinking feel when you realise you have just £26K in the account, and you’ll have to rob Peter to pay Paul.
How does this this all come about?
Private Practice is a business, just like any other business. Yes, we (hopefully) went into medicine to help people, but running a bespoke service for patients brings with it expenses and cash flow headaches. ‘But I’m a Doctor’, ‘Not a business manager’ you might be thinking. Time to wise up.
The good news is you can be an ethical, empathetic expert and run a profitable practice.
Whilst you don’t need to enrol on an MBA course, you do need to start getting an appreciation for financial numbers in your practice.So.. first things first. Are you recording how money flows into your practice and out of your practice? And are you, yourself, looking at those figures on a very regular basis, and understanding their significance?
This is an absolute must. Waiting to see how much ends up in the bank account after six months has flown by, is not keeping an eye on the finances – so it’s time to change this passive way of thinking.
Many Doctors have little real time understanding of how much they are earning week to week, and how much they are expending week to week. So, if this you, you need a system in place to measure this. Real time. There are many fabulous tools enabling you to do this. When it comes to expenses, using a human-friendly software package such as ‘Freshbooks’ can be a great way to easily record and monitor your expenses – you can literally take a snap on your smart phone of a receipt and it will be uploaded to a web-based platform, which can be accessed from anywhere. You can get instant feedback on exactly how much you’re spending on room rental, conference travelling expenses and nifty laptops.
So what about the money coming into your practice?
In private medicine, the process of invoicing insurance companies and self-funding patients can create a disconnect with reality, because it there may well be a lengthy pause between submitting the invoice, and receiving payment (more about this in another post). But if you’re tempted to hide behind the excuse of ‘well I can’t get a feel for incomings, because I don’t know when the payment is going to come through’, it’s time to look for another metric.
It’s very possible, to be measuring the amounts invoiced each month, and you need to diarise (yep, that means putting it in the diary) an hour each month when you review these figures, so you can look at how well you are, or aren’t doing.
Another way to ‘dipstick’ the process is to record the number of new patients, and follow up patients you are seeing each week. It’s very likely that you will be able to calculate an average income per patient figure, if you reflect back over a couple of months – and it’s a surprisingly accurate way of anticipating your monthly earnings.
The reason this is particularly useful, is that it starts helping you get your head around the numbers of patients you need to be seeing each week, in order to hit a financial target.
So if your goal is 30 patients per week, and by the Wednesday you’ve seen 24, think where you might be able to ‘find’ those extra six patients. Is there a patient who could be assisted to get some super-fast turnaround on MRI imaging? Might it even be worth liaising with the MRI department to ask them to regularly ring fence a couple of slots at your peak times, so that they undergo their initial appointment, imaging, and a follow up within a day or two?
All too often we leave patients to their own devices when booking in for a review.
How many of your patients have been through a procedure, but have been lost to follow up? Many are doing well, and so don’t bother, and some may have not returned because they didn’t think anything else was on offer when they didn’t make a miracle recovery.
You and your patients are missing out through the lack of scheduling, and it might be as much as one in three patients. Imagine if you’re your secretary were set up every follow up, and then what if your practice management software then texted the patient the day before that appointment to remind them?
A little more work for your admin team maybe, but it could mean a very easy way to boost your profits by as much as third.
What are you waiting for? Start now!
Sometimes, we all need a little extra help in building our practices – from a business perspective, as well as a clinical one.
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