Many group practice owners are struggling to hire clinicians in the wake of COVID-19, and it can be tricky to figure out how you’ll grow when you can’t add to your team. Let’s talk about increasing revenue, as well as profits, without actually adding any services.
There are a handful of different ways that you can easily increase your revenue, as well as potentially increase your profits, without having to add any new therapists or bring any new people on. (Because remember, those are two separate things!)
Request a Rate Increase
My first suggestion is to request a rate increase with insurance providers. It's one thing to ask for a rate increase, but it's completely another thing to actually get that rate increase. I suggest putting the request on a formal letterhead. Insurance companies are more likely to take a rate increase request into consideration when it looks formal, versus just sending an email to the network representative. Even though it adds an extra step, it can result in a bigger payoff than just sending your request via email. What's really important is having measurable data inside of the body of your message. Insurance companies are not emotion based, so if you appeal to their emotions, you're less likely to get a rate increase because they want measurable facts and data that supports the need for an increase.
This will vary from practice to practice, but include things like what your practice offers that would be considered unique, any specialties, specific types of services, clinicians who speak different languages, if your practice serves a lot of that insurance company’s customers, the specific CPT codes you’d like an increase for, comparable rates from competing insurance companies, and so on. It can really help to give them all the things that they need to make their decision in one message so that they don't need to go back and forth with you. I request an increased rate from insurances every single year, so I'll either request $10 or 10% increases each time, whichever is more. Be prepared to negotiate, counteroffer, and appeal a denial so you can get what you’re requesting.
Request Discounts for Operating Expenses
This is one I have a lot of fun with. Make a list of all of your operating expenses. If you need help tallying them all up, you can reference your credit card and checking accounts, and make note of all the bills that have been paid. I keep the list in one place, and then one by one I contact each account and request a discount. It’s definitely time consuming, but it is absolutely worth asking.
In 2020, I saved about $300 a month by requesting discounts on my operating expenses, which, over the course of 12 months, is pretty significant. And that is all profits, right? Because you were paying for that, and now you don’t have to spend that money.
Become an Affiliate, Partner, or Referral Source
There are different terms for this, but essentially, you're receiving a discount in fees or compensation for referring friends, family or other business owners to their services. It's important to note that I only recommend doing this for services that you actually use and love. I'm not a fan of affiliate marketing, where you can get money for referring people to things that you aren't using yourself or don't actually recommend. Check out the options you have with businesses you already use—your EHR or payroll service might have a program like this.
Eliminate
When it comes to eliminating, you want to eliminate expenses that aren't serving you. One example would be marketing expenses that aren't yielding a return on investment (ROI). The key here is to figure out what ROI means for you and your business specifically. It might not always be about converting a new client, but it could be about building community relationships or networking. Take a look at subscriptions like magazines, therapist directories, and software to make sure you’re still using what you’re paying for. You can also see if you can adjust your expenses instead of eliminating them - paying less for social media ads, for example, instead of eliminating them altogether. You might also find you can save some money by paying for things yearly rather than month to month. Or switching levels-you might find that you can shift down to a basic level of something you once needed full service support in. For example, we were able to shift from Concierge to Basic level for my payroll company because I now have a HR consultant, which eliminated the need for the Concierge level.
Track Your Marketing Costs and Return on Investment
There are three metrics to look at that can help you track ROI for digital marketing. First, you want to figure out what your cost per acquisition is. This metric measures how much it costs to acquire a new client. In its simplest form, cost per acquisition is calculated by dividing the number of total marketing costs for a certain time period by the total number of customers acquired. The next metric that is really important is the customer lifetime value. The cost per attaining each new client only tells part of the story, because you also need to know, on average, how long clients stay with your business. This is the average value of each customer over a period of time. Your cost per acquisition needs to be less than the customer lifetime value, or it can indicate a negative return on marketing investments. To understand your return on a marketing investment, you'll divide the revenue that you generated from marketing by the total marketing cost.
Simplify
Simplifying processes reduces the amount of time that you spend on things which, in turn, also reduces the amount of money that you're spending. Your admin or your clinical team is spending less time doing work, which means you're spending less money on those things. You want to find the simplest route to go from A to B, or A to Z. Every year I look at our intake process, our billing process, our digital and social media process, our leadership or supervision process, and our onboarding process to see if there are any parts of these processes that can be simplified or made easier.
Automate
Automation is the process of reducing the amount of time that you're spending on tasks, which can also save money. Instead of hiring someone to do something, you can use technology to fill that role. It's essentially taking things away from actual people, reducing human error, and allowing systems or technology to do some of that work. An EHR is a great example of this. Google Workspace is another example of automation, because it lets you make team folders that all of your employees can access, which then reduces the back and forth communication of team members asking where things are. So take some time to go through your systems and decide what can be automated.
Delegate
Lastly, delegate anything that you can't eliminate, simplify, or automate. Look at what your role in your business is supposed to be versus what you want it to be. Why are we business owners, if not to do the things that we love? Many of us would benefit by delegating tasks so we’re left with the big picture type of stuff, unless there’s an aspect of your role that you really love and want to keep as yours. When you free up your time to take over big picture tasks, you can put your focus on growing the business in other ways.
It is possible to increase your revenue without adding new clinicians or services, so don’t despair if you’re struggling to hire right now. You’ve got this!
