Medical Practice Solutions To Survive The Perfect Economic Storm
The purpose of this letter is to describe the economic situation faced by medical practice owners and managers and the solutions available to offset these challenges. As well we have added an Appendix of our most relevant Best Practices Videos for Patient Acquisition from our Education content.
As expected from the last 6 months the economic headwinds we face as a nation and practice continue. The upward pressure of increased consumer living expenses from rising interest rates has decreased consumer interest and capability in pursuing reimbursed and cash-pay medical procedures. It is important that you evaluate your current practice performance and optimize it towards solutions that can offset that decrease in consumer demand and ultimately practice cash flow that is expected for at least another 18 months.
In short, you should prepare for equal or less revenue and equal or higher expenses over the coming 18 months as compared to the last 18 months; this means harsh pressure on cash flow and profits. The positive factor in the current environment is that technology is providing practices more solutions than ever with respect to understanding their situation (analytics) and being able to attack the challenges of this economic storm with automation and more efficient than ever marketing channels.
Your review should include a full analysis of your Patient Acquisition Process:
- Patient Inquiries – Analyze inbound patient flow and sources to ensure maximum delivery
- Patient Scheduling – Analyze inbound inquiries to schedule rates to ensure process efficiency and schedule availability
- Patient Purchases – Analyze conversion rates by provider/procedure to ensure optimal purchase rates and post-appointment follow-up process
- Patient Retention – Analyze patient recall (retention) activities to ensure you are facilitating the most optimal patient journeys through your practice services in order to create the best patient outcome and lifetime value
THE PERFECT ECONOMIC STORM
|Trickle Down Unit Measured
|Fed Funds Interest Rate
|Consumer Cash Flow
|Down due to Interest Rate
|Up due to Interest Rate
|Perfect Economic Storm
MEDICAL FACILITIES & SERVICES SEARCH VOLUME = -10.7% DECREASE SINCE 2019 SOURCE GOOGLE TRENDS
COSMETIC SURGERY SEARCH VOLUME = 18% DECREASE SINCE 2021 – SOURCE GOOGLE TRENDS
FEDERAL FUNDS INTEREST RATE = 250% INCREASE SINCE 2022
Economic Issue Review: Increasing interest rates over the last 2 years have made it more difficult for consumers to pay co-pays/deductibles and/or purchase cash-pay-related medical services due to less spending power. Whether with less cash on hand due to increased daily expenses or less borrowing power, the average consumer is in a much more challenging purchasing power position than 2 years ago. This has a direct correlation to consumer medical interest and financial capability to pursue treatment.
Google Trends reports that the “Medical Facilities & Services” search volume has dropped -7.4% since 2021 and -10.7% since 2019. Consumer search volume in the Google Search Group of “Cosmetic Surgery” related terms has dropped 18% since the post-Covid high of 2021. Obviously, there is a decrease due to Post Covid, but if you look further this search volume is reaching post-2008 financial crisis lows.
The average consumer’s ability to spend money outside of necessities has dropped faster than the decrease in search volume due to rising interest rates and increases in costs across nearly every aspect of their life (rent, mortgage, food, gas, etc.). Interest rates have increased by over 300% since 2019.
Ultimately this means the average practice will feel a larger negative impact than the search volume numbers above as this does not take into account the decreased purchasing power of the consumers who are searching for education but do not have the financial capabilities necessary to move ahead with treatment.
We have seen many practices this year have a decreased appointment to purchase rate of 30%-50% from last year alone due to this hidden double negative of consumer purchasing power. That being said, it is clear that those practices that have maintained a consistent and aggressive marketing plan to new patients and existing have performed much better than those that have not. Their marketing plans are nominal in cost as they revolve around the website (nominal cost), social media (no media cost), and existing patient recall (no media cost).
The above practice challenges are compounded by increased practice costs, decreasing insurance reimbursement, and personnel retention. As practices, we are looking into the “Perfect Economic Storm”…
SOLUTIONS TO NAVIGATE THE PERFECT STORM
Many of us in this current environment are going through at least our 4th such storm (2001 internet collapse, 2008 housing crisis, Covid). We know we can make it to the other side and life will go on! Additionally, our ability to navigate the storm is better than ever with the rapid increase in value of technology to allow our teams to do “more with less” compounded by the advantage of media channels and solutions that are less expensive and higher performing than what our piers had before us. I.e. Social Media vs. Bill Boards/Radio/TV, email/text vs. direct mail, etc.
Your Patient Acquisition audit should include the following:
|Key Performance Indicator (KPI)
|Measurement Year Over Year Monthly/Quarterly
|Solutions to Improve KPI’s
Source of Inquiry
Revenue vs. Ad Spend (ROI)
|Patient Recall Automation
Missed Phone Calls
Web Inquiry Response Time
Inquiry to Schedule Rate
Lead Date To Appointment Date
Attendance/No Show/Cancel Rates
|CRM (integrate phone/text/PM/email communication)
Patient Messaging Automation
Schedule Capacity Optimization
Marketing Source Performance
|Attendance to Purchase Rate
Revenue Per Appointment
Cost Per Appointment
Consumer Financing Solutions
Repeat Patient Revenue
|Patient Recall/Journey Mapping
Patient Recall Automation
Do you have these 14 KPIs available on a daily basis? Does your team have them available in regard to their key responsibilities? If not you are running into the storm blind… Just as important protecting your practice against “opportunity cost” within the good times provides just as much value with these metrics integrated into your business operations.
This memo discusses the top 20 Solutions to KPI issues in patient acquisition you may be having. There are certainly more, however, you should ensure that at a minimum you have the above solutions integrated deeply into your daily business systems. Advanced technology has led to automation in many of these solutions in a way that is patient and practice-friendly creating improved engagement, patient outcomes, and practice scale.
Your business meeting cadences should include these metrics in review at various levels on a daily, weekly, and monthly basis. There should be no surprises in performance at the end of any month or quarter. This level of transparency in KPI performance and communication will allow your practice to “proactively” resolve issues as they begin and long before they severely impact cash flow.
The storm is here for many already or is looming near. Fight back aggressively and quickly with the implementation of the above KPIs and automation, you will make it through to the next sunny day.
CEO and Founder, Red Spot Interactive
- Return On Investment (ROI) Analytics –
- Patient Acquisition
- Optimizing Patient Acquisition Check List
- Auditing Patient Acquisition Challenges
- Understanding Phone Abandonment Rate
- Lead Management and Patient Scheduling
- Patient Engagement Drives Patient Acquisition
- Consumer Financing – Don’t Leave Money on the Table!
- Understanding Your Patient Conversion Rate
- Understanding Patient Retention Software
- The Value of Lead Created Date
- Understanding Patient Lifetime Value
- Increasing Patient Attendance and Purchase Rates
- Generate Referrals
- Team Management