These factors enhance goodwill value and boost the profits of the clinic: PR and Marketing with stress on patient referrals, Organization, and Cash Flow. Control of these three areas gives you your most important asset – Power of Choice.
It might even help you to remember these three – patient referrals, organization, and cash flow as “POC Factors,” which, oddly enough, also are the letters in Power Of Choice. POC as an acronym, you see, not only stands for the above three general categories of practice development, but also for Power Of Choice.
Let’s look at the “C” section of the acronym:
By survey, the number one issue among today’s health care practices with regard to their finances is insurance and reimbursement problems. Second is the issue of how to build profitability in the practice. These are intimately related.
Lack of control at each vital point in the reimbursement process costs many practices hundreds of thousands of dollars.
Tightening each control point in the practice should be part of your day-to-day operation as well as your eventual exit strategy. Thorough review and reorganization of the entire process saves enormous sums of money. This includes analyzing which companies you choose to affiliate with and how your office staff handle patients, obtain patient information, handle claim submissions, etc.
Every clinic needs to have firm financial planning. Done correctly, a practice grows with strong reserves, salaries and perks increase, investments can be made and overall practice value grows.
It is a very large liability, particularly at time of exit, for an owner to have been paying his staff but not himself, and any knowledgeable buyer will see this. On the other hand, when you have been successfully operating your clinic at arm’s length for years and receiving a healthy management fee, a buyer is much more attracted to the deal.
The secrets to monitoring and improving profitability is through proper financial planning considerations. Exactly how to bonus staff to boost productivity without losing your shirt and other strategies are in Section Four, the last part of this book.
When it comes to the three POC factors and attaining true Power of Choice, put yourself in that rocking chair and see what you want to have accomplished. Or put yourself in the shoes of a potential, savvy buyer. Determine the actual goal that would be a win for you, for your staff, even for the buyer.
Set your intended financial objectives for one year and three years in terms of:
- What Gross Income will you have?
- What profitability percentage will you have?
- What is the ideal value that your practice will have, at the time you turn it over, which will lead you toward financial independence?
In his own words… Results!
“As I write this, I am in Florida. I have been here for eight of the last fourteen months pursuing personal interests while my practice in Kansas grows.
That dream of a 4,000 sq. ft. facility blossomed to three locations, two of which are 12,000 square feet. We deliver about 600 standard PT treatments weekly with about 200 visits in cash and niche programs: speed training, sports enhancement, wellness programs, a balance and vestibular program, and others.
For several years now, I’ve been able to chair the Kansas APTA chapter Legislative Committee, do Church work, help raise my family, coach and other sporting activities.
This was made possible because the tech and strategies related to PR and Marketing, Patient Referrals, Organization and Cash Flow are solidly in place in my practice, providing power and stability. Specifically:
PR and Marketing, Patient Referrals: I implemented the referral program and then PR and marketing to the hilt. With an army of referral sources we have attained true opinion leader status in the community.
Organization: While I formulate the practice goals, purposes, policies and plans, my executives operate on written programs. I have built a true team of competent managers that control and grow the business so I can operate at arm’s length. Even the machine of training staff and executives is in place with an in-house course room that trains 15 to 20 students weekly.
Cash Control: I have always been profitable, but by putting in the Billings and Collections program and through proper financial planning, my wife and I were able to build a very healthy reserve to provide a secure base for practice expansion as well as our family.
The final step I did, the Power of Choice module, has enabled me to operate completely exterior to the practice. Two months after completing it I arrived in Florida to pursue my other interests. That was no accident.
Of all this, I have gained total certainty on two major and powerful facts:
1. Training and putting an executive structure in place that knows the Hubbard® Administrative tech, combined with profession-specific job descriptions and applications based on those principles, was the key to building my organization.
2. As one achieves his or her goals, sometimes surpassing the Ideal Scenes first envisioned, one needs to constantly raise those goals and envision greater ideal scenes.
The real benefit for me personally, is the certainty of the technology. I have the solutions and tools to create the effects I want. That adds to my life, and peace of mind comes withknowing that I know. And, the best part—it’s available to anyone bright enough to learn and use it. That would be you.”
– Paul Silovsky, PT Rebound Physical Therapy
Excerpted from “The Keys to Private Practice Success”.