Same-Day Surgery Manager: Questions and answers on increasing cash flow
Questions and answers on increasing cash flow
By Stephen W. Earnhart, MS
CEO
Earnhart & Associates
Austin, TX
Question: Over the past eight months, we have noticed a huge drop in collections from our patients' copay insurance. We are struggling as a result of this cash flow issue. How are others dealing with this dilemma?
Answer: First, you are not alone. That's some comfort anyway. There is a difference between patients who do not have insurance (self-pay) and the patient responsibility of their insurance (copay). There is a big difference in how you handle the two. You can negotiate the self-pay patient to collect as much as you think you can get up front. However, with the copay patient, you have to make attempts to collect — part of your deal with the insurance carrier. Your solution is that you absolutely need to collect this money up front before surgery. You have earned it. It is yours. You have a right to expect it.
Question: After your article last month, our team sat down and explored new sources of revenue. We discovered that, on average, our facility fees were about $200 higher than the other surgery center in town. As a result, almost all the plastic surgeons use that center. We are trying to come up with a marketing strategy to entice them to our center as we have lower turnover time, higher patient satisfaction, and a nicer facility than the competing center. Thoughts?
Answer: Your marketing strategy is to lower your cost by $250. During these "interesting times," sometimes the only thing that matters is more money in the surgeons' pockets by lowering fees for his/her patients.
Question: We just opened our new center. While we build our volume, we have excess staff on hand, as we want to accommodate a surgeon that might want to book cases. Our management company is telling us we have to lay off that staff until cases increase. We showed them your article about not focusing on expenses but rather revenue. They laughed at your suggestion and want to know if you are going to pay for our staff. Now what?
Answer: You have a great opportunity to use your excess staff to go out and "market" your center to area surgeons. Don't wait for them to respond to your fliers. Send the staff out in teams and hit every office in your community. Let the surgeon know what you have to offer, but spend the time with their staff that actually book the cases. Send the profits from those cases to me.
Question: Can our center bill do the billing for our anesthesia personnel?
Answer: Of course. You have most the demographic information to do the billing anyway. Your anesthesia staff are probably paying about 6%-8% to someone else to bill for them. Offer to do it for 5%. Based upon your numbers (we talked), that will add about $120,000 to your bottom line. This is a good way to expand your revenue with minimal additional costs.
Question: We are booked solid on Fridays and Mondays in our surgery department, mostly with plastic cases. As a result, we have to turn away higher-revenue cases for those days. We are light on the other days of the week, but the surgeons don't want those blocks because they compete with their block at other locations. The plastic surgeons don't want to give up their time on Friday and Mondays, but their blocks are more flexible. Ugh! We cannot afford to run off the plastics but need to get the other surgeons in. Any ideas that focus on revenue for us?
Answer: Offer your plastic surgeons a 20% reduction in your fees if they will do their cases on Tuesdays, Wednesdays, or Thursdays. Since most aesthetic cases have a narrow profit margin anyway, this change is equivalent to a 20% raise for the surgeons. They will switch, and you will more than make up for that revenue with the other surgeries that will fill that gap.
Question: I need to come up with some additional revenue sources for our facility. Got any ideas? My equipment budget is zero, so it has to be something that doesn't cost me anything.
Answer: Tattoo removal. There are firms out that supply the equipment, and I think the break-even is about eight cases per month. If you have been to the beach lately, you can see why this procedure has potential, for many reasons!
[Editor's note: What ideas has your outpatient surgery program developed for surviving the economic downturn? Contact Joy Daughtery Dickinson, Editor, at [email protected]. Phone: (229) 551-9195. Earnhart & Associates is an ambulatory surgery consulting firm specializing in all aspects of outpatient surgery development and management. Contact Earnhart at 13492 Research Blvd., Suite 120-258, Austin, TX 78750-2254. E-mail: [email protected]. Web: www.earnhart.com.]
Question: Over the past eight months, we have noticed a huge drop in collections from our patients' copay insurance. We are struggling as a result of this cash flow issue. How are others dealing with this dilemma?Subscribe Now for Access
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