I made many mistakes when I first started practicing, and that’s okay because errors forced me to learn.
I jumped on an opportunity to buy my first practice, only to realize that it was one of the worst decisions I could’ve made. I was fooled into thinking the existing practice was more stable and profitable than it actually was.
The doctor who sold me the practice combined the income from two businesses she owned onto one tax return that we used to assess the profitability of the practice. The bulk of her income came from her other business, not the practice I purchased.
Then, I ran the gamut of typical early mistakes:
I worked too many hours.
I did all of my own marketing efforts which proved to be highly ineffective.
Hired new staff and didn’t know how to set up proper expectations and get them to produce.
Spent a lot of money on advertising, which brought in very few prospective new patients.
Didn’t manage my time correctly and thought I could do more than I actually could.
Struggled with hectic administrative paperwork and billing procedures.
Then, I decided that I need help.
I hired a whole slew of consultants and coaches.
I wasted even more money and gained very little insight.
So after many years of struggle and purely grinding away, I threw out all the rule books and decided to start running my practice based on numbers and quantifiable metrics that I defined – this is the decision that made all the difference.
After developing systems in my practice that was based entirely on quantification regarding essential events, I was able to measure every area of my business, find the bottlenecks, tweak strategies, implement changes and measure the results until every aspect of my business was running smoothly, continually meeting and breaking quotas.
Here are five common mistakes I made initially, and continue to see healthcare practice owners making on a regular basis:
1. Not knowing the numbers behind their business
This is the absolute worst mistake you can make as a healthcare practice owner. You should know every number, metric and percentage that immediately pertains to your business. If numbers are not measuring your business, you will be swayed by emotion, flawed theories, and wrong opinions. The numbers NEVER lie.
To name a few, you should know these metrics like the back of your hand:
ROI (Return on Investment)- for each dollar you spend
CPA (Cost Per Acquisition)- for each patient that comes through your door
ARPP/C (Average Revenue Per Patient/Client)- The lifetime value of a patient/client
Conversion Ratio – Percentage of prospective new patients/clients that convert to paying patients (should be at least 75%)
2. Complete dependency on insurance billing
If your accounts receivable is comprised mostly of insurance billing, this will one day lead to trouble and financial loss. This means that your livelihood is at the whim of insurance companies – you’re not in control of your practice’s bottom line.
It would be best if you had a practice that is more cash than insurance, whereas many practices are the opposite. This creates a more stable and dependable cash flow. For every dollar you spend on marketing, you’ll be able to gauge your expected return better.
3. Hiring consultants that don’t produce results
Eventually, I’ll write a whole book on this subject alone.
It’s a big topic, but a quick and easy breakdown is this:
Most healthcare practice coaches and consultants aren’t worth the money or the time invested.
It’s like the parable of the blind men and the elephant. Each person is touching a different part of the elephant and stating different descriptions of what an elephant is. None of the blind men are entirely wrong, but they are only touching a small part of what actually is.
It’s the same idea with many coaches and consultants; they are only touching part of the problem. Hired help tends to address one small part of the problem and state that fixing that problem will save your practice. Alternatively, coaches and consultants will have a more comprehensive solution, yet they have a one-size-fits-all approach that doesn’t take into account the different needs of each individual practice.
If you need a simple test for determining if a coach is worth the expense, ask these three questions:
1. Is their program based on standardized and defined metrics?
Everything they’re saying should be backed up by numbers that have been STANDARDIZED AND DEFINED. You should be able to measure the progress you’re making while working with them and use tracking data to make data-driven decisions administratively for your practice. This is absolutely essential to understanding your business. If this is not part of their program, there will be holes in your understanding of the problem, and even worse, theirs. We know this is severely lacking in the coaching/consulting world and it has been detrimental to many practices.
We ensure our clients’ practices against this weakness as we’ve developed a standardized approach and have developed proprietary software (TAOPP’s Analytics Center™) each client uses to fill this gap. To the best of our knowledge, no other healthcare coach or consultant has taken the time, much less invested in the expense, to develop such a system for the benefit of their clients. At best, they replace this critical discipline with ‘frameworks’ and ‘concepts’ that get lost in translation with each client. We have found that this piece alone is critical to our client’s longstanding success and financial gain.
2. Do they address every area of your practice?
If not, don’t work with them. They should be complete with an administrative discipline, marketing, staffing, patient/client communication, and systems of leverage for scaling. If they don’t have a comprehensive and cohesive approach to every area of your practice, their solution will be a band-aid at best. The road to prosperity has to be comprehensive and cohesive. Otherwise, all types of inefficiencies can ensue meaning less profit and more stress for the practice owner.
3. Do they engineer themselves out of necessity?
At the end of your time working with them, you should never need to hire them again or pay for another coach or consultant. You should know everything you need to run every area of your practice and be prepared with sound business principals that will allow you to adapt to any changes that happen in your practice’s performance.
4. Inconsistent marketing strategies
This is the bane of every healthcare practice owner’s existence, except for the very few that have cracked the code.
Everyone has been inundated with this idea of “automated marketing,” and that’s great, but if you’re only doing done-for-you services, it won’t work as well.
Here is a hint: In-house marketing and management.
You need to create a system of marketing that is effective and controlled by you via payroll. No outside company will give you the consistent results you need. No advertising solution will provide you with the results or ROI that you need. Marketing has to be done in-house so that you have COMPLETE CONTROL over the process, understand what does and doesn’t work, and when you find the winning formula, crank up the volume. Once your marketing SOP’s are refined, you’ll become unassailable in the marketplace.
5. Lack of one-on-one attention and support.
Without one-on-one attention and support, there are too many nuances and variables to consider that can go left unnoticed and unhandled lending to confusion, unwarranted stress and financial loss – the logistics of a coaching or consulting program matter considerably. We pride ourselves on the format of delivery and the guaranteed consumption we afford our clients for their maximum benefit – and it shows on their bottom line!
After all, this is our clients’ livelihoods we’re talking about here, and it’s not something we take lightly!
6. Ineffective Staff Management
You and your staff are the faces of your practice. No one will care about your practice as much as you will, so how do you ensure that your team treats your patients/clients as well as you would like for them to?
1. Proper training
If you don’t adequately invest in your staff training then you will never get the results that you want because you have set them up for failure from day one. Train them how to do their job as well as you would do it, if not better. If you’re currently unable to do that, find someone that will train you how to do the job, so that you can always teach someone else how to do it properly in the future.
2. Defined expectations
If you don’t have defined expectations for your staff, you are setting them and yourself up for disappointment. If they don’t know precisely what you need from them, they will always fall short because they can’t anticipate all of your needs much less what is a viable level of production for your practice.
If you want an employee that is not just good, but great, there needs to be an incentive program in place. People are self-interested, and as much as they may like you and your practice, they will never perform at an optimal level if there is not a prize for extra effort. If every staff member has an incentive at the end of the month for exceptional performance, you can expect better performance that more than makes up for the cost of the bonus.
You’ve most likely been in practice for some years and experienced many of these mistakes. That’s okay, it’s part of the learning process. But if you’re still facing these mistakes, seek to change your practice around as soon as possible. There is a way to make your practice profitable, sustainable and enjoyable; and we have THE SOLUTION.
If you have any questions or are facing a problem in your practice that you think we might be able to help you with, please feel free to reach out. You can book in a quick call to ask us whatever questions you’d like by CLICKING HERE.
All our best,
Jonathan and The Art of Practice Prosperity Team