A while back I had the opportunity to work with a physician practice in south Texas community. This little town had but one significant employer (and one main payer), a large regional manufacturing plant – and the plant was rumored to be on the chopping block, as the company began off-shoring many of its manufacturing operations. Things were not looking good for these employees or their hometown.
You would think this would have also spelled doom for the practice. But, as it turns out, the future still looked very bright. The practice team had already planned ahead for the possibility of the plant closing. They understood that, even if the plant closed, the town’s population was aging and unlikely to relocate – and they’d need services. So, they developed a strong Medicare patient base, and positioned themselves to be the Medicare practice-of-choice for locals as they reached 65. They also established a satellite office in an underserved nearby town, opened a much-needed ambulatory surgery center, and explored a variety of new marketing approaches. As a result, the practice was actually booming – and well-positioned to keep thriving – despite the looming threat.
Handling these sorts of environmental changes – which can seem like they come from out of the blue – is critical to the long-term profitability of your practice. In the current economy, medical practices can be “collateral damage” when big employers struggle or close up shop.
Planning for ways to reach new patients – like my client did – is one way to protect and build your medical practice. Another important step is to be extra vigilant about verifying insurance – and confirming patient payment responsibilities – when a major local employer begins laying off employees or closes a facility. Remember that, because of typical processing delays and the impact of COBRA, terminated employees can appear to be covered by their previous policies for several months past their termination date. If you’re not updating and verifying patient employment information at every visit, your exposure to payment retractions for terminated plans is growing.
Stay informed about business activity in your local area
Above all, it’s important to stay informed about business activity in your local area that can impact your practice indirectly. Most US cities offer a business publication such as the Business Journal (which offers scannable email newsletters with local business news for 40+ metro areas), or a local newspaper with business coverage. To stay current on-the-go, Google Alerts are a handy resource – just enter keywords about your local market (e.g., local businesses, business leaders or key lawmakers), and Google will send you tailored news-links at the interval that works best for you.
Keep in mind, also, that staying current on local business news won’t just help you avoid problems – it can also help you spot opportunities. A few years ago here on the West Coast, an initiative by the mayor to reduce the tax burden on start-up companies made big headlines because it encouraged Twitter, one of the hottest Internet companies, to remain here – and to expand in an area of town that is desperate for redevelopment. The expansion of a company known for attracting hard-working young professionals should have caught the attention of family practitioners, OB/GYNs and pediatricians – because those Twitter employees represent practice growth now and several years down the road. What’s more, the Twitter decision kicked off an influx of fast-growing Internet companies to Twitter’s neighborhood and surrounding areas – a trend that’s expected to continue. A savvy practice could find lots of ways to capitalize on this type of information – by considering opening an office in Twitter’s previously undesirable neighborhood, for example, or by creating marketing programs targeted towards the new employees coming into town.
Now is the time for you and your physician practice to start thinking Out of the Box!!