physician practice revenue/growth: strategies for success

PHYSICIAN PRACTICE/REVENUE

GROWTH: STRATEGIES FOR SUCCESS

A Workshop Presented By Patrick T. Buckley, President and CEO, PB HealthCare Business Solutions LLC

PB Healthcare Business Solutions LLCStrategy, Marketing, Management for Health Care®

©2009 PB Healthcare Business Solutions

LLC

The material contained herein is protected

and intended for use by clients and

associates of PB Healthcare Business

Solutions LLC, and may not be reproduced

or distributed without the expressed written

consent and permission of PB Healthcare

Business Solutions LLC.

Topics For Today’s Workshop• The New World Of Physician Group

Practice Management• Understanding Our Customers’ Universe• Using Marketing Information To

Facilitate Revenue Generation• The Interdependence of Marketing and

Operations• Marketing Communications• Managing Cash And The Revenue Cycle• Revenue-Generating Opportunities• Putting Strategies Into Action• Summing It All Up

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PB Healthcare Business Solutions LLC

Strategy, Marketing, Management for Health Care®

Increasing Pressures on Physician Practice Income

• Inadequate reimbursement

• Higher malpractice premiums

• Increasing administrative/overhead

• Longer receivable cycles

• Displacement of income-generating procedures through new technologies

Imaging advances have replaced need for some higher-reimbursed procedures and surgeries

• Competition from retail clinics and “lifestyle enhancement” alternatives

Health clinics and quick care centers (e.g Walgreens’ Take Care™, Minute Clinics)

Patients are becoming more involved with programs that eliminate or reduce pain (pain centers, chiropractors,), improve well-being/quality of life (fitness centers, massage centers), and improve their appearance (vein centers, cosmetic surgery, weight management programs)

Employers are becoming more active in health promotion

Move toward new health management models (medical home, integrative medicine)

Consumers are engaging more pre-actively in their health care diagnosis, treatment, and health maintenance

3The New World Of Physician Group Practice Management

The Equations They Probably

Didn’t Teach You In Medical School

Greater number of patients + Less Time To Interact With Patients + Impaired Cash Flow

=

Major Stress!

Excellent Service + Efficient Operations + Customer Satisfaction

= Opportunity For Profit

The New World Of Physician Group Practice Management 4



The Doctor of the Future:

• The doctor is online

• Half man, half machine

• A diagnostic search engine

• In two places at once

Article location:http://www.fastcompany.com/magazine/135/the-doctor-of-the-future.html

May 1, 2009

Tags: Innovation, Technology, Leadership, doctor

The New World Of Physician Group Practice Management 5



http://www.fastcompany.com/magazine/135/the-doctor-of-the-future.html









http://www.fastcompany.com/tag/innovation-2

http://www.fastcompany.com/tag/technology-1

http://www.fastcompany.com/tag/leadership-2

http://www.fastcompany.com/tag/doctor

The Marketplace Is Always Shopping

6

“I need to control my out- of- pocket”

“Will this fit my

family’s schedule?”

“I want to be treated with courtesy

and respect”

“Can my doctor diagnose quickly and

prescribe the right treatment?”

“Help me help myself”

“Does my doctor relate to what it’s

like to be a patient?”

“Will I get enough time to go

over all my issues?”

Understanding Our Customers’ Universe

How People Choose Physicians

(primary care practices)

SOURCES

Self

Personal Endorsers

Caregivers

Organizations

30%

40%

20%

10%

7Understanding Our Customers’ Universe



Decision StaySwitch

AWARENESS OF PRACTICE

WILLINGNESS TO TRY

Anywhere from 5 to 20% of Current Patients Are “In Play”

BRAND EQUITY/REPUTATION

SERVICE “PERSONAL BRANDS”

RELATIONSHIP MANAGEMENTASSESSMENT OF

EXPERIENCE

MARKETING STAGE

REPEAT CUSTOMER

Understanding Our Customers’ Universe 8



Top 10 Reasons Patients Switch PhysiciansI. Poor Communication

II. Practice Style (Rushed Or Slow)

III.Insurance Plan Dictates Who I Can See

IV. Inconvenience Factors E.G. Location, Parking

V. Scheduling Issues

VI. Long Waiting Times

VII.Doesn’t Always See The Same Physician

VIII.Lack Of Confidence In Ability To Treat

IX. Doesn’t Seem To Listen Or Remember Key Details

X. Insensitivity Or Paternalistic Attitude

Source: PBHBS focus groups

9Understanding Our Customers’ Universe



Top 10 Reasons Patients Keep Physicians

I. Switching Costs Are High

II. Helpfulness And Respect Of Office Staff

III.Physician Communicates Well

IV. Person Is Not Rushed

V. Professional Competence

VI. Convenience And Amenities

VII.Scheduling Options

VIII.Reasonable Waiting Times

IX. Continuity In Care

X. Understandable Bills And Payment Flexibility

Source: PBHBS focus groups

Understanding Our Customers’ Universe 10



Consumers Are Participating In Online Communities

Understanding Our Customers’ Universe

11PB Healthcare Business Solutions LLC


Medical Group

Practice

SOCIAL MEDIA MESSAGING

Multi-directional

Immediate

All demos

Inexpensive

Easy consumer

interaction

12



Using Marketing Information

To Facilitate Revenue Generation

• Auditing The Practice:

What is the potential for further growth, and what areas do we want to grow in?

Can we handle any incremental growth without compromising service standards?

Who are our best performers and how do

we leverage them?

Are we doing everything possible to satisfy our customers, and to give our staff a supportive environment?

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Assessing Your Marketing Prowess:

The 5 C’s Of Successful Medical Practice Marketing

The 1st C: Clinical Knowledge and Experience

▫ Are patients able to get unbiased information on the performance of the physicians?

▫ Does the physician or group practice have a reputation for clinical excellence?

▫ Does the practice maintain data that demonstrate how it performs with respect to quality measures?

▫ Are data on the number of procedures performed and their outcomes made available to patients in an easy to understand format?

▫ Does the group foster a practice style that encourages patients to ask their physicians questions?

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The 2nd C: Customer Service and Convenience

▫ Are evening hours, weekends, or walk-in appointments available?

▫ Are physicians keeping to their appointment times with patients?

▫ Is the reception service courteous, helpful, and responsive?

▫ Does the office follow-up with patients after the office visit?

▫ If the practice uses electronic record management, are patients given the opportunity to review the accuracy of information prior to leaving the office?

▫ Is patient privacy maintained throughout the patient’s visit?

The 5 C’s Of Successful Medical Practice Marketing 15



The 3rd C: Cultivation Of Patient Trust And Practice Relationship

--Does the practice maintain strong consultative and referral relationships with other specialists and subspecialists?

--Does the practice provide amenities for seniors, such as facilitative chairs, reading materials, and assistance with transportation?

--Does the practice schedule multiple consults if needed for patients during the patient’s visit?

--Does the practice employ integrative health coaching?




The 4th C: Communications

▫ Does the practice provide educations information for its patients in print, electronic, and internet-based media?

▫ Can patients access their personal physician via e-mail?

▫ Does the practice have a cogent brand message?

▫ Are communications consistent with respect to tone, look, and feel?

▫ Are communications materials, such as collateral and magazines, kept organized and up to date?

▫ Do the physicians speak at community health forums and events?

▫ Do the physicians participate in healthcare prevention screenings?




The 5th C: Costs and collections

▫ Does the practice provide consumers with sufficient information prior to the visit regarding pricing and collection?

▫ Are billing practices comprehendible?

▫ Are the physicians in the group practice in most consumer health care plans?




CASE STUDY: “DOCS INC.”

Service Area Description

Doctors Inc. is a family practice medical group located in a gentrifying neighborhood of Milwaukee (see map 3).

The area immediately surrounding the practice is re-vitalizing with residential and new small business developments.

In this area, residents are primarily white (86%), followed by African American (7%), and Hispanic (5.7%).

About 5% of housing units are vacant, a figure that compares favorably with the nation rate of 9%.

Approximately 2.5% of residents are foreign-born and 10% speak a language besides English.

Map 1: Total Service Area Map 2: Core Area Map 3: Census Tract

19Using Marketing Information To Facilitate Revenue Generation



Market Snapshot

Customer Profile

Over 50% of the practice’s patients are between the ages of 18 and 44.

The top five reasons for patient visits are well woman visits, well child exams, well man exam, upper respiratory infection, and hypertension. Other diagnoses are distributed among several categories.

The practice has twice as many female patients as males. About half of the patients reside in the core area (zip code 53208). Approximately 20% live in the secondary service area (zip code 53213), and the last third live within nine zip code areas that contribute 5% or fewer of the practice’s volume.

Patients average approximately 2 visits per year, which is below the national average of 3.2 patient visits per patient per year.




TABLE 2: DOCS INC. CUSTOMER PROFILE

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Zip code Male Female Total

<18 18-44 45-64 65+ <18 18-44 45-64 65+

53206 1 1 1 3

53207 1 3 4

53208 3 13 4 2 8 19 9 3 61

53209 1 2 3

53210 1 1 1 4 4 11

53213 3 7 2 12 1 1 26

53214 1 2 3

53216 1 1 1 2 2 7

53217 1 1 1 1 4

53218 2 1 1 4

53223 1 1 1 3

53224 2 1 3

TOTALS 9 26 8 2 15 47 20 5 132

Age Percent<18 18.1%18-44 55.3%45-64 21.2%65+ 5.3%

Market Snapshot



TABLE 1: KEY DEMOGRAPHICS OF SERVICE AREA

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Population

Characteristic

Core Area

(Zip Code

53208: Approx.

47% of patient

origin)

Secondary

Service Area

(Zip Code

53210: approx.

28% of patient

origin)

Wisconsin US Census Tract

94—Vliet

Street so.

Lloyd St. no.

N. 60th St.

west

N. 52nd St.

east (1.1

miles w-e)

Total Service

Area

(approx.

25% of

patient

origin)

Total Population 35,150 30,509 5,363,675 2,489 821,015

Median Age 27.7 26.6 36.0 35.3 34.4 33.1

Age 65+ 6.7% 6.1% 13.1% 12.4% 10.1% 12.9%

Avg. Hshld Size 2.68 2.91 2.5 2.59 2.18 2.42

Owner-Occ. Units 33.5% 44.7% 68.4 66.2% 55.2% NA*

College or Higher 18.8% 18.5% 22.4 24.4% 35.1% NA*

Median Hshld

Income

26,436 32,340 43,791 41,994 43,005 NA*

Per Capita Income 13,018 13,908 21,271 21,587 22,419 NA*

Families < Poverty 29.5% 22.3% 9.2 1.5% NA*

(U.S. Census Bureau, American FactFinder, Census 2000)

*U.S. Census 3-digit zip code tabulation areas (ZCTA) do not track this information for 2000 census

Using Marketing Information To Facilitate Revenue Generation

TABLE 3: PRODUCTION CAPACITY AND GROWTH POTENTIAL FOR SOLO FAMILY

PRACTICE*

National average (NACS, advanced data # 365, 2003)

317.3 visits per 100 persons per year =3.2 visits per person per year

Practice rate 2.045 per person per year

Population in total service area 821,015

Total estimated patient office visits from service area

262,723

Estimated current market share for practice .1%

National rate applied to practice (with no increase in patients)

422 patient visits

Incremental visits needed from current clientele to achieve national visit rate

152

Incremental customers needed to reach national rate (assuming no increase in visit rate)

74

Per day patient volume capacity 10

Total potential visits based on daily volume capacity (240 days x 10 patients/day)

2,400

Proposed Target Market Share .2%

Additional visits beyond 270 to achieve market share(.002 x 262,723)

255

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*Visit rates are assumed to stay constant at 3.2 per patient. Estimates for additional visits are based upon the most recent NACS national norms, which may not be reflective of actual utilization characteristics for the service area in 2008

Using Marketing Information To Facilitate Revenue Generation

VISIT RATES FOR SELECTED DIAGNOSES




ESTIMATING SPECIALTY CARE OFFICE-BASED MARKET SHARE

Cardiovascular Specialists, SC

Yearly patient office visits for

cardiovascular services…………………………….30,500

National average (National Ambulatory Care

Survey, Advance Data No. 374, June 23, 2006)…8.0 visits per 100 persons per year

Population in service area………………………… 1,400,000

Total patient visits in the service area estimate….112,000

Market share estimate…………………………… 26.7%

Using Marketing Information To Facilitate Revenue Generation 25



MEDICAL GROUP PRACTICE

MARKETING/OPERATIONS ASSESSMENT

CLINICAL PRACTICE PROFILE

• Describe the group practice’s scope of services with respect to:

Diagnostic

Preventive

Therapeutic Care

• Describe the special capabilities of individual physicians

• Describe any newer methods of clinical care, e.g. minimally invasive procedures

• What are the group practice’s strengths and areas for improvement?

MARKET REVIEW

• Describe the marketplace dynamics with respect to market position, competitive challenges, and growth opportunities for the practice.

• Is your primary competitor’s business steady, increasing, or decreasing? Why?

• How does your practice compare to your competitors’

▫ In length of time in business?

▫ In patient volume?

▫ In size and number of employees, suppliers, and support staff?

▫ In similarities or dissimilarities?

• On what basis will you compete for patient volume?

▫ Clinical uniqueness

▫ Patient Convenience

▫ Service delivery

▫ Price

▫ Technology/innovation

▫ Other

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MARKETING/OPERATIONS ASSESSMENTREFERRAL SOURCES

• What are your principal referral sources?

• Who among the group practice have “rainmaker” capability?

GROUP PRACTICE GOALS

• List three primary marketing goals for the group practice. Think in measurable terms; e.g., maintain current book of business, grow patient volume by 5 percent.

PRACTICE OPERATIONS

• Describe the opportunities for patient/provider interactions—how they happen and how well they are performed:

Initial call by consumer to make an appointment

Can the caller “break through” voice mail protocols?

Is the call handled promptly and courteously?

Is the caller given a choice of physicians?

Reception/Waiting

Is the signage easy to follow?

Is the patient greeted in a welcoming manner and are voices kept down to assure privacy?

Is the patient kept apprised of his or her status at least every 15 minutes?

Is the waiting room big enough to accommodate all patients during peak hours?

Can expectant mothers wait in an area away from pediatrics?

Are reading materials up to date and nicely organized?

Are there readily available waste receptacles for patients with coughs and respiratory problems?

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MARKETING/OPERATIONS ASSESSMENT

In The Exam Room

Is the patient seen within five minutes of entering the exam room by the physician?

Is the exam room equipped with everything it should have?

MARKETING COMMUNICATIONS

• Does the group practice have a dynamic web site?

• Can patients get information on the physicians—their training, experience, volumes of procedures and outcomes?

• Does the group practice have a e-newsletter or hard-copy newsletter?

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Marketing Communications

Enlivening Your Brand

Traditional and Social Media

Internal Marketing

Guerilla Marketing

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SCORING KEY QUESTIONS IF NOT A “5”, WHY NOT? ACTION TO BE TAKEN: WHO,

WHAT, WHEN

Has the practice developed a

positioning platform to guide its

internal and external communications?

Does the name of the practice provide

sufficient information so that

consumers immediately know the

practice’s purpose?

Does the positioning platform express

a specific attribute or attributes for

which the practice wants to be known?

Is the brand identity (look, tone, feel of

communications) creating a sense of

cohesiveness for the group practice?

Does the group know its brand image?

Are consumers’ perceptions of the

image consonant with internal

perceptions?

Do the operations of the group and

fulfill the brand promise?

Has consumer perceptions research

been conducted on a systematic basis

to determine awareness and

preference gains?

Is your brand message strong and

does it reflect the brand image you

want people to have about you?

BRANDING YOUR MEDICAL GROUP PRACTICE:

ASSESSING YOUR EFFECTIVENESS

0=Not at all

3=Yes, but not completely

5= Absolutely

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Communications Vehicle

Description Significant Competitor Presence

Relative ROI/Cost Primary Use Best For Target Group

Recommendations

Directories Yellow PagesSpecialty DirectoriesInternet Directories

Yes Low/High Ability to locate practice Seniors Consider advertising in directories butstreamline

Website Basic web site Yes High/Med. Explain practice styleProvide description of services

All Consider enhancing the web site

Blogs and other Social Media

Personalized communications on web site

No Low/Low Communicate with patients Patients Not recommended

Internet sponsorships Google-type banner or box ads on web sites frequented by target demographic groups

No Low/Med. Used mostly by non-medical businesses

All Not recommended

Traditional sponsorships Sponsorship of speaker programs, sports teams,etc.

No Low/Varies Mostly for brand image development

Consider as it can build visibility but limit to strategic support

Collateral Written material such as brochure, display cards

NA Low/Varies Give to patients after they join practice

Patients, esp. seniors Consider as a leave behind piece

Outdoor Transit, vinyl and electronic boards

No Low/High Reminder medium and image

All Not recommended

Practice Newsletter (hardcopy or e-zine)

Monthly, bi-monthly, or quarterly.

No Medium/High Keep practice visibleStrengthen affinity with community

Consider in six months

Direct Mail Post-card, letter,CD or brochure. Use to get people to a free screening or to an open house for practice

No, but needs to be different from others so it isn’t junked

Low/Low Attract new move-ins, announce new services,

All Consider—make sure the call to action is a strong one

Special Events Holding an open house, screenings, health fairs

No High/Low To get people to experience something about the practice

All These are good “press the flesh” type settings and provide opportunities for would-be customers to ask questions directly

Advertising (print, electronic)

Ads in newspapers, magazines, radio, tv

Some Low/High Control and place the message

Certain vehicles work best with different groups

Consider as a supplement to other promotional options

Publicity Coverage in local news, medical journals, and newsletters. Eg: Metro-Parent, Milwaukee Woman

Varies High/Low Gives third party “endorsement” which is more believable than advertising

All Highly recommend

Personal Selling Housecalls, speaking engagements

High/Med

31Marketing Communications Matrix For Medical Group Practice

Physicians Are Collaborating Online

In Ways Never Before Possible

• Learning in real time from peers across geographies and across specialties

• Sharing ideas and discussing new practices

• Accessing collective insights and experience from a broader group

• Disseminating information more quickly and more efficiently

“The New Social Media For Patients and Providers”, Jason Bhan, M.D.

32



Physician Collaboration Through Social

Media

• Accessing the collective wisdom of your peers▫ Asking Questions

▫ Social Bookmarking

▫ Case Presentations

▫ Wiki Collaboration

• Networking▫ Know who you are collaborating with

▫ Build a referral base or network


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Comparing The Major Social Networking SitesSocial Medium

Strengths of this Medium

Weaknesses of this Medium

To Whom This Medium Most Appeals

Relative Value ForPhysicians

Lots of good press and credibility with big playersFastest-growingCan blast messages out to many

Message must be short Baby boomersGen X’ers

Excellent for professinalnetworking and recruitment of professionals.

Not as viral as other mediaPrimarily individual career/ business people

Young and Mid-level Professionals

“Warmest” medium; likes pictures and non-commercial type infoFastest growing medium for women over 55

Friending can be awkward

Gen X’ers and growing with baby boomers

Good way to showcase procedures, present compelling stories through podcasts and video.

Still has a little of the “jackass” image with some people

All age groups

Well-known among younger generation and musicians

Not taken seriously by the older adult population

Millenials Not recommended

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Physicians On Facebook


35



And On YouTube

• http://www.youtube.com/watch?v=-MJP37xL0gY

36



http://www.youtube.com/watch?v=-MJP37xL0gY



Five Basic Criteria For A Physician Practice Web

Site

Searchability

Can the consumer quickly find the web site directly or via the major search engines?

Navigation

When on the site, can the consumer move easily within pages? Is there a consistent navigation structure? Is the navigation intuitive to users and user friendly?

Content

What information is provided?What information should be provided, and what should not?Is there a role for frequently asked questions (FAQ)?Are links related to site provided?Is the content being updated on a regular basis?Is the information informative?

Design

Does the home page draw the user in?Are the content and navigation buttons displayed on each page?Does the site layout enhance the user’s ability to gain information easily?Does each page fit coherently in the site? Do the design and look of the site convey the right feel or message?Are colors consistent across browsers? Is there design integrity within the page and from page to page?

Interactivity

Can the consumer take action on the site, such as sign up for lunch with the Doctor, send e-mailto a faculty member, ask questions about current research?

Source: Physician Entrepreneurs: Marketing Toolkit, by Patrick T. Buckley MPA, ©2008 HCPro

37

Medical Group Practice Marketing Plan

The Marketing Plan Should Include These Elements:

I. Market Situation

II. Target Market Segments

III. Strengths, Weaknesses, Opportunities

IV. Positioning for the Medical Group

V. Goals and Objectives

VI. Strategies and Tactics

VII.Assignment of Accountabilities

VIII.Provision of Resources

IX. Monitoring, Evaluation, and Control

38



39

Timely Billing

Appropriate Coding

More Effective

Collections Practices

Provide more or

enhance services

Retention Strategies

Increase Volume

Generating Top Line Practice Revenue

Optimize Payer Mix

Internal Marketing

Increased Throughput

Scheduling Efficiencies

Evidence-Based Practices

Costs

R

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v

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n

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s

Recruitment of key

providersPB Healthcare Business Solutions LLC


Increasing New Volume: Best Practices

• Build The “Customer First” Brand

• Eliminate The Information Silos

• Virtual Office Solutions

• Smart Promotion Using Old and New

Techniques

• Referral Source Development

40


Increase New Volume

Internal Marketing

Optimize Payer Mix

Provide more or

enhance services

Assessing Revenue-Generating Opportunities



Retention Strategies: Best Practices

• Say “Thank You”—(Duh!)

• Manage Throughput Without Upsetting

The Customer-First Orientation

• Retain Open Slots For Same Day Traffic

• Cross-selling And Data Mining

• Stop Leakage Out Of The Group Practice

• Install An “Evergreen” Customer Service Program

Regular notification of patients waiting for

physician

Attentiveness at reception desk

Fix problems on spot before escalation

Note: 43% of customers who leave a business leave because of a service issue and 77% of the

service issues are due to employees’ attitude or behavior (Maritz Market Research, 2008)

41


Increase Volume

Internal Marketing

Optimize Payer Mix

Provide more or

enhance services




Internal Marketing: Best Practices

• Create and foster a nutritive environment

• Have a staff “meet and greet” with all physicians

• Cultivate a “servant leadership” management

philosophy and work-style

• Develop internal customer workchart

• Conduct self-image gap analysis

• Reward staff initiatives meaningfully

• Maintain weekly progress checklist

• Celebrate team accomplishments

42


Increase Volume

Internal Marketing

Optimize Payer Mix

Provide more or

enhance services




Optimize Payer Mix: Best Practices

• Analyze the Demographics

• Target specific promotional vehicles

43


Increase Volume

Internal Marketing

Optimize Payer Mix

Provide more or

enhance services




Provide More Or Enhance

Services: Best Practices

• Connections with alternative providers

• Analyze utilization patterns by diagnosis

• Focus on one or two specialty areas and

make them special

44


Increase Volume

Internal Marketing

Optimize Payer Mix

Provide more or

enhance services




GoalSupport

Physicians Patients/Consumers

Employees

3 X

4 X

2 X

2 X X

1 X X

3 X

1 X X

4 X

4 X

4 X

Putting Strategies Into Action: XYZ Multi-Specialty

Physicians Group

Growth Goals, Strategies, Targets

STRATEGIES TO GROW AND SUSTAIN REVENUE

Practice Development1. Assign “mentors” and role models for the

newer physicians who do not have built-up practices.

2. Provide opportunities for newer physicians to be introduced within the physician community, as well as to the public.

3. Provide scripts for the front line staff to introduce new physicians to new patients seeking an initial appointment.

4. Institute program for newly-recruited physicians to meet with office staff when they come on board.

Internal Marketing1. Develop employees service awards program

2. Infuse operational enhancements with customer service philosophy

Community Outreach/Personal Selling1. Implement physician relations program

2. Conduct visits to key referrers’ offices

Communications

1. Conduct direct mail campaign to new move-ins

Customer Service/Satisfaction1. Implement retention strategies e.g. annual

recognition letters to established patients, screening reminders, etc.

CUSTOMER DEVELOPMENT GOALS:1. To Build Unaided Awareness2. To Create A “5 Star” Service Environment3. To Increase Percentage Of Referring

Physicians Who Positively Rate Our Services

4. To Increase Overall Patient Volume External Customers Internal Customers

©Copyright 2007 PB Healthcare Business Solutions LLC

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PB Healthcare Business Solutions LLCStrategy, Marketing, Management for Health Care™

773-458-8662

www.pbhealthbiz.com

physician practice revenue/growth: strategies for success

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