16 years of practice management tips

[Doowai]

I think this thread is really very helpful! thanks!
And just have a stupid question, if you are the only doctor in that clinic, what happen if you are sick or have other emergency issue that you have to be absent for a long period of time? (like months) What can you do?

Not a stupid question. I had 3 chiropractic friends (remember, all chiropractors basically work part time) and we had agreements to fill in or each other free of charge. This usually happened 2 or 3 times a year and involved going into the office on afternoons or 2 days a week or something like that - there was kind of a game we played in which we really went over the top in patient service with the others patients. I would come in and my patients would say "Wow, he was a very smart fellow. Has he been practicing longer than you?" or conversely "did he just graduate, he knew all sorts of things you never told me" - and my friend would come in and spout all sorts fo facts etc that made him look smart. I would go over board showing his patients home exercises (my thing) that could help cure their problems without so many chiropractic visits - my friend would come back and he would call me up and be like "dang, my patients thought you were the greatest guy in the world showing them all those home rehab exercises". It was a sort of back stabbing game, but there was a friendly spirit to it.

I also occassionally used a locum tenens doctor - I paid a few hundred dollars a day.

A chiropractor has to bend over, and push and shove etc a patient - its pretty physical. If you are a PCP, you can simply cut the patient load to patients who need nothing more than a prescription or tests ordered. I would have to be really sick not to be able to do that. I was working within a week of blowing out some discs, I once worked with a broken hand that was in a cast.

I would say use friends who are 15 miles away or locum tenens. I don't think you want to use a friend that is 1 mile away - you might lose patients.

Others may have better ideas. Its not a problem I had very often and certainly never for months. Yikes

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[Doowai]

http://forums.studentdoctor.net/showthread.php?p=6513410#post6513410

Post 16, concerns with software license if you buy an existing practice.

 

[MeowMix]

I really like this thread. Thanks.

 

[Doowai]

Starting a business requires some paperwork. But its not that hard - just go to your accountant and they can pretty much tell you everything you need to fill out : city business license, Tax ID number, filing a fictitious name with the secretary of state, etc.

I have never found attorneys all that helpful. I used one once when I had a board complaint - he only chimed in once to say "I object, that is a mischaracterization of my client" - $1000 for one hour. I paid one to incorporate me into a LLC - after realizing it provided no real safety against a law suit, no real tax breaks I then paid an attorney to disincorporate me. And I once paid an attorney to help me collect a large bill owed me - big mistake, never used any sort of collections service again.

The paperwork for starting a business is really not all that much.

 

[Doowai]

Most people who start a business do not start their own business. They simply start their own job - they are the one working. You may think the lady answering your phone works for you - wrong. You work for her - you have to work to make money to give her. She makes no money, most of the time.

People do not come in to see your staff, they come in to see you. No money comes in unless you are there. The front desk person cannot charge for what she does (well she charges you).

People who work for you, actually bring money in. They make money to give you. Massage therapists, acupuncturists, psychologists, etc - they provide services they bill for, and you get part. Plus they bring patients in the office that you otherwise might not get.

A good front staff person though will be taught to work for you. If you change front desk staff - and the new one gets 2% more of the weekly patients to keep their appointments, she has worked for you by keeping you from losing appointments from missed appointments.

You really do not own a business until it runs like a McDonalds - in other words it makes money even when you are not there. If you are the only reason money is flowing in, then you do not own a business - you own a job. You need to personally be in their for money to come in. Once you have people on staff that bring money in , even when you are at home chilling, THEN you own a business. Massage therapists, psychologists etc etc that come in during hours you are not there are truly working for you. Others may lighten your load (like a medical assistant), but you still must work to pay them - you are working for them.

Keep the number of people you must work to provide for down, and the number of people who independantly generate income up. Especially people who are symbiotic - bring in people you normally would not get.

 

[Doowai]

Whew I hate when I type in a long post and somehow my connection times out and when I hit "submit" it tells me I do not have permission to do this and it has lost my post and I have to retype it. This has happened a ton while creating this thread and its very frustrating. I just wrote a long post about collections and tried to post it and lost it....aaaggghhh

Anyway, second time - Collections.

If you have a good system in place, if your prices are reasonable, and you provide good service, your collections can be very good. I think near 100%.

I think we will continue to see a great amount of private pay collections, as insurance pays less or declines to pay, and/or as fewer people have insurance.

I bought a Medicare based practice that I then owned for something like 5 years. Many of the medicare patiens had supplemental and secondary insurances. The practice had been there 12 years or so, I don't exactly remember anymore, but well over a decade. Many of the patients had been coming in since the very beginning. The previous owner gave out alot of NOOPE's (No Out Of Pocket Expense) - meaning patients actually paid for nothing, insurance alone paid the bill for many of these people. The first thing I did was make sure everyone was paying co-pays and deductibles. One might think I would lose patients by requiring they all start paying cash for their portion - not the case. In fact many of them valued the care more. people do not value what they get free as much as what they earn.

Then the state Medicare carrier changed and I had heard alot of bad things about the new carrier and read alot about what many felt was abusive practices in other states. I did not want to deal with that, and literally would have rathered shoveled horse manure than put up with it. So I went all cash. Patients paid me, and I would bill their insurances for them and they could have the insurance checks. Again - did not lose any patients.

Nonetheless, regardless of how tight your collection system is, you will get stiffed. SOmeone does not want to pay. Or they get the insurance check instead of you and cash it. Of they give you a bad check. This really did not happen much to me, but it did happen.

Do you want to use an outside collection agency. If you do, I recommend you do not pay more than 1/3 of the account to them on the high end. There are agencies you can sell the account to - I do not recommend it as many of these use VERY aggressive practices and this can cause ill will to you in the community, and if they are not located in your state they may not have to follow certain state laws you are bound to regarding collections, and you could end up in trouble.

Collection laws vary from time to time, and from state to state - check with local and current laws.

Like all offices I had some basic paper work that all patients had to fill out. I tried to keep this very minimal with no redundancies. The basic paperwork had name, address, birthday, place of employment, how they heard of us (helped us track what marketing was being effective), etc. It had 2 places for signatures. One was if they had an insurance we were to bill. The other signature was for everyone, and gave us permission to treat, listed things that could go wrong such as aggravating their condition and even possibly death, but also gave us permission to contact their employer and garnish wages. Again, be sure to check with local laws to make sure you can do this.

I only used this a small number of times. But it really worked. People did not want us to contact their employer. After trying other ways to collect we would send a letter that basically said something like, "We have tried to collect this overdue debt several times , we do not want to, but our next action will be to contact your employer and garnish your wages" - with a photocopy of their signature authorizing us to do so. I never had to contact an employer.


The IRS and collections -

To be continued

 

[Doowai]

Accumulating wealth over simplified:

If you make $500 and spend $500 you are broke

If you make $1000 and spent $1001 - you are in debt, and are a slave to someone until you pay your debt

If you make $100 and spend $50 - you have more of a wad than either of the first two



(sure it depends on what you spent your money on - freeing yourself from debt, things with tangible worth etc, but please get the overall idea. You want to accumulate wealth).

 

[Doowai]

Anyway, second time - Collections.

to contact an employer.


The IRS and collections -

To be continued

I had a friend who had a form from the IRS he used for collections. I will see if I can find it, and get the form number in case you are interested. Anyway, apparently the IRS considers it income if you receive a significant amount of services but don't pay for it. If for example, someone has a $1000 bill for medical services they never paid for, the IRS considers it income, and tax them something like $250. You fill out the form, send it in to the IRS and the IRS takes care of the rest - contact the person and requesting payment OR ELSE!

My friend said it really helped his delinquent collections. If someone owed him a grand, he sent a letter saying something like pay half your bill within 10 working days or else this goes to the IRS. He said most people paid - even though it was cheaper to pay the IRS 1/4 than 1/2 , most people for some reason did not want the IRS to come a calling. I never used it.

I did use the hot potato technique for collecting. The hot potato refers to someone who picks up a potato that they later feel is too hot for them to hold, so they had it to you to hold. You did not pick it up, its not your problems - but somehow you are left holding the problem.I learned this technique from SECRETS OF POWER NEGOTIATING by Roger Dawson from Nightingale Conant.

Mr.Dawson among other things owned some apartments. Occassionally he had a tenant that went delinquent on rent. It was very hard in that state to evict them. So he would approach them. The renters might say something like; sorry can't pay you because money is too tight right now. He was left holding a hot potato that was really the renters problem, they picked it up and they need to deal with it. So Mr.Dawson would say something like ; I know you wanted your apartment refurbished. What if I get you new appliances and carpet etc - if I did these things for you, do you think you could come up with the back rent you owe? Often they replied yes. Then he would say, I will check with the corporate office. I cannot okay this directly, but I will check with corporation, and push to have this done for you. In the meantime get the back rent in and I will see what I can do. Mr.Dawson was the corporation, he was incorporated but he owned it. But the renters did not know that and he used it in his favor so as not to be the bad guy. Once he had their back rent he would tell them something like, sorry corporation said its not in the budget now. Or , corp would not approve everything but I did score you a new oven and range.

I used this a few times. Someone owed money and I knew they wanted something - free xrays, reduced prices for a family member they wanted to bring in etc. I found this hot potato approach worked. My wife felt this was not honest since I had little or no intention of giving them what I knew they wanted. But I was in it for the business, and she never complained so much that she refused to spend the money.

 

[deleted87716]

IRS considers it income if you receive a significant amount of services but don't pay for it. If for example, someone has a $1000 bill for medical services they never paid for, the IRS considers it income, and tax them something like $250. You fill out the form, send it in to the IRS and the IRS takes care of the rest - contact the person and requesting payment OR ELSE!

Why bother? If somebody doesn't pay you, dismiss them from your practice and send them to collections.

I'm always willing to work things out with people who have a genuine hardship, but in my experience, nearly all of the people I've dismissed for non-payment could've easily paid their bill...they simply chose not to.

 

[Doowai]

Why bother? If somebody doesn't pay you, dismiss them from your practice and send them to collections.

I'm always willing to work things out with people who have a genuine hardship, but in my experience, nearly all of the people I've dismissed for non-payment could've easily paid their bill...they simply chose not to.

I agree, you have to be willing to lose a few patients to grow your practice.

I never used the IRS form, but my friend thought it wa great. I never used a collection agency either - and my collections were always in the 90% range except for a year or two in which I was all cash and collections were 100%.

 

[Doowai]

FREE RENT

I practiced for a year in an office rent free. The office was on the corner of Scottsdale and Shea in Scottsdale Arizona. Still one of the most exclusive areas of Arizona, and certainly in 1999, it was probably the most exclusive piece of real estate in Arizona.

At the time I relied primarily on my 4 year undergraduate degree in nutrition. I pretty much worked exclusively with type 2 diabetics, tweaking their diet and motivating them to exercise. My goal was to remove inteference that was keeping them from having better blood sugar control and better A1C's. For type 2's, exercise and diet control can do alot - a ton of people on medications could do better, but they do not exercise and they really don't watch their diet. I was there to motivate them. I saw alot of A1C's come from 11 or 12 down to 6 or 7. This was Scottsdale and I charged roughly $300 an hour for consulting plus had some ancillary services as well. I "rented" out of a chiropractors office.

I exchanged sweat equity in lieu of paying money. I referred my patients needing chiropractic care or PT to them. Each chiro patient was worth about a grand to them, so this was more than rent. Although I am and was a chiropractor, I was not competing with them for typical chiropractic patients.

An MD could do this easily. Many chiropractors and PT's etc would love to have an MD in office. The MD could trade sweat equity in the form of writing a limited script for pain meds on an acute patient, evaluating patients to determine if they needed other care, looking at a suspicious skin mole on their back they notice etc - and since many PT and chiro patients might come from auto accidents, doing an independant exam to determine level of injury in case it goes to court. An MD's testimony will stand up in a court of law far better than a chiro's or PT. Doing this on a few patients a day will easily justify no rent.

Plus in a chiropractors office you will have access to an x-ray machine most of the time. Plus physical therapy equipment.

So you could have a room in a well equipped office. The chiropractor would refer you some patients, and you would provide some minimal serice for their patients - and get free rent and free use of equipment like x-ray.


Not a bad deal. The referrel of their sprain/strain patients to you could net many new patients in your practice (they usually have an established patient base - you would not be competing with them for patients), plus you would save the cost of rent.

 

[Richie Truxillo]

Great thread! Going to read this tomorrow at work on my last day as a lowly MS IV student Got 3 years of FM and a fellowship to go but I'll be thinking about all this practice management stuff years in advance.

Thanks for sharing,
Richie

 

[Doowai]

Thanks, I am glad you might find it useful

 

[Doowai]

Oh why I think a Medicare/geriatric practice is ideal for a working mother :

http://forums.studentdoctor.net/showthread.php?p=6981044#post6981044