Practice Management Alert

Rely on evaluations and engagement to bolster your healthcare business.

“One of the things impacting margins is the cost of everything in healthcare going up: staffing expenses, supplies. But the payers aren’t paying any additional dollars, so the more your expenses go up and your revenues stay stagnant, that’s when your losses increase,” said Karen Bowman, FACMPE, CPC, CPMA, CPCO, in her AAPC HEALTHCON 2024 presentation, “Sustaining Margins in Challenging Times: Leveraging Team Engagement and Process Innovation.”

While you might be tempted to go for high-dollar budget adjustments like salaries to preserve your margins, Bowman recommended getting creative to preserve those expensive investments in budget hogs like staffing.

Investigate What’s Going On

The first step is to identify the symptoms, Bowman said. There are four categories you should evaluate: Revenue, expenses, turnover and engagement, and patient satisfaction.

This means looking at different facets of revenue, including your payer mix, the amount of money, the work your clinicians are doing, and the relative value unit (RVU) percentage of your contracted rate, she said.

“You have to be careful with your contracts, because sometimes [payers] sneak in these rate adjustments,” she warned. Your practice or clinician might get an innocuous letter but inside there’s an alert that the reimbursement rate will change as of a certain date.

Don’t forget to look over other aspects of your practice’s financial health, like bad debts and underpayments, and, if applicable to your practice, the volume of visits you’re accommodating by service line, location, and type of visit, she said.

Look at expenses, too. Anecdotally, it may seem like costs have skyrocketed since the Covid pandemic started. Get some actual data by looking at the numbers and seeing what has increased, both in total and proportionally. The biggest areas might be staffing, supplies, equipment, and information technology (IT), according to Bowman.

For example, Bowman noted that almost all practices are now using electronic health records (EHR), many of which are managed via vendor-provided software. Staff using these EHR programs may require more tech support, and that means you need to either have someone on staff or to farm out those costs to a vendor. That’s an expense your practice wouldn’t have had at all before healthcare became so digitized, and it can be costly.

Staffing is another major expense, and one you must balance, Bowman said.

“It’s hard to take care of patients if you’re not fully staffed, because somebody is having to pitch in and take care of those patients. And then … you’re shorthanded a lot. And that’s when your staff gets burned out,” Bowman warned.

During the session, she asked attendees to raise their hands if they practice had lost a provider in the last 2 years, and most attendees put up their hands. Bowman emphasized that burnout is affecting every single provider, whether they’re retiring or moving to a different organization. The causes are hitting everyone — there are always more mandates to meet, reimbursement tends to be lower, and costs are going up.

To highlight any of these concerns, Bowman suggested utilizing patient satisfaction surveys. If your staff are burned out, if you’re having trouble with wait times, if your office is feeling dingy or unclean because there are other bills you’re trying to pay first, patients are going to notice and will probably tell you if you ask.

Bowman suggested some ways to elicit feedback, including QR codes, simple online surveys, or invitations to post Google Reviews. While most patients probably don’t have the time or bandwidth to fill out a detailed, multiple-page survey, many are probably happy to answer targeted questions about the ease or difficulty in scheduling an appointment or the time they spent in the waiting room.

Pay Special Attention to Providers

Nonclinical staff are crucial for getting patients into the office, keeping things running smoothly, and facilitating payment, but providers are the staff members bringing in money. It’s crucial to evaluate provider productivity. Bowman recommended looking at the following data points and then benchmarking across industry by specialty, and within your practice per each provider:

• Visits per session or per day
• WRVUs per session or day or clinical full-time employee
• Dollars per WRVU or dollars per patient encounter
• Patient visits, procedures/surgical volumes and yield

“This could be an eye-opening thing, where some providers aren’t really pulling their weight,” she said.

Benchmarking is especially important to evaluate each provider fairly because of how their schedules, and, thus, workloads, may vary.

The patients they see will affect the money coming in. Bowman suggested looking at the employers in your town and noting what payers are common, and whether there are any big disparities in payment rates. Having this information at hand can help if you’re accepting new patients and wanting to distribute the reimbursement potential more evenly between providers.

You Reap What You Sow

Bowman emphasized that a lot of these measures are actually a reflection of your workplace culture. This means you can work toward certain outcomes by focusing on particular measures.

“You get what you focus on. Behaviors often align with cultural norms and organization, and things that are not aligned will drive behaviors you don’t want,” she warned.

One incentive idea is a bonus plan. Bowman’s practice has a quarterly bonus that isn’t a huge amount of money but is awarded when certain criteria are met, including a 98 percent net collection rate.

If you provide a bonus plan incentive for all staff, you may be able to  incentivize lower performers across departments, which may not give you a tangible difference in dollars coming in but will probably smooth your office’s workflow and possibly ease interoffice resentments.

Another tip she offered: Get serious about documentation, and delegate responsibilities to make sure all the necessary tasks are  accomplished. This isn’t just for encounters, but for leases or scheduling or payroll — all those general business matters.

“If it’s something really important in your business line or in your practice, you’re going to have to make sure somebody’s handling that,” she said.

Some situations may call for branching out in ways that may not make immediate sense in terms of bookkeeping. Bowman mentioned a story of a team member whose child died and how she advocated that that team member got two weeks of paid time off to begin to process that grief. That kind of empathy demonstrates engagement with employees as people, not just workers, and can engender a lot of loyalty. 

“Choose measures that will move the needle. You don’t want to be stagnant — you want to be able to move it and make a difference. Choose measures that can influence and make your practice better for your patients. Because, after all, that’s what we’re here for: taking care of patients,” she said.

Rachel Dorrell, MA, MS, CPC-A, CPPM, Development Editor, AAPC