Feb 25 2008
Is it a service or a business?
There is an interesting conversation going on a popular NP list about health care. We all know providers that will not see patients with particular insurances, and those that will see everyone.
I happened to mention that as a business owner; sometimes you have to make decisions in order to keep your doors open. Someone else brought up the question is health care a service or a business?
Personally, I think of health care as a service business. But like all businesses, if you don’t get reimbursed enough, your cash flow suffers and you run the risk of having to close your doors. Cash flow is always on the mind of business owners.
So, if you have a practice…do you consider it a business or a service or both.
Tags: business, NP practice issues, service business
I consider it both. I take all insurances and also see those that have no insurance and give a huge cash discount. I also use a lab that matches my discount rate. I believe we all deserve respect and care. I have even bartered and given care for free. I am going to start a free clinic in the near future one to two nights a month. I believe in Karma, what goes around…which in turn will keep my doors open.
Grace
I view health care as being both a service and a business. I too am having to offer some discounts in pricing so that my patients can at least start on the road to better health. It does me no good to continue checking someones blood pressure at a church blood pressure screening and know that the person continues to have high blood pressure because she/he lacks health insurance and has not purchased any medicine. I was blessed to be able to open the clinic that I now have and it is truly a struggle right now but I continue to be blessed and I try to offer alternatives for my patients. What God has for me it is for me… I know without a doubt that he will bring me out…
I view healthcare as a service and a business. I also agree with those above. My goal has been to get financially caught up to pay my bills, to offer a free clinic. I also do offer substantial cash discounts on a sliding fee scale off my regular prices for patients with no insurance or for those with those huge deductibles and hsa plans.
I unfortunately had an outsourced biller who did not communicate with me, and as she was not in my office, she did not know or see my patients. They were just names on a page, and she sent out a bunch of “bills” without telling me, after Christmas, and it startled about 15 of my patients, who either cancelled or will never call or come back, because she never showed me what her bills looked like, and she put my practice name on them, and as she was behind, the bills came to the patients about 2 months after their dos, so they were shocked, and so was I. This was a good learning experience, but not pleasant. Things are shaky, but starting to get back into shape now, as we re- group. Still doing most of the work myself..with an ma who works about 10 hrs a week.. Carla
All healthcare is a business - whether it is a for profit or not for profit- whether you get paid by the patient, a third party payer, a grant or by donations or barters. As a business owner, you decide your prices, how you will get paid and what your policy will be when you don’t get paid. If you can’t pay your bills you have to close and that means no one gets services.
It still amazes me that nurses have such a hard time with money - charging for their services and collecting what’s due them (whether it is from an insurer or the patient). When we were RN’s we had no idea we were generating revenue for the hospital we worked in because our services were included in the room rate. How empowering it would have been to have known how much we generetaed when it came to salary negotiation time. Most NP’s dont know how to figure out what they generate and so dont recognize their value to an employer.
As an NP business owner, you can’t even do a business plan or operational budget unless you grasp these fundamentals of income and expenses. As a business owner, you make the policy about collections and if you outsource it, it is your responsibility to know how they will do so. You need to decide from the beginning what you are. Are you a free clinic? Are you a sliding fee scale? Are you cash only? Your patients need to know it too. Some of them will take advantage of you. Once you have a reputation as someone who doesn’t bill timely or collect what’s expected - you are sunk. Practices get reputations.
My financial policies are very clear and the patient makes the decision to come to my practice knowing this. I accept third party payment or full payment at time of service unless arrangements have been made ahead of time. My visits are longer and more comprehensive than practices that charge double what I do. I will work out payment plans with patients - take equal barter, take credit cards.
And I do send some patients to a collection agency when they are unable to meet their financial promises. Sound harsh? I don’t think so. Patient’s don’t always tell you the truth and will try to take advantage of you. How do you determine a patient’s eligibility to pay? Do you just take their word for it? Patients can and will take advantage of your good will. I can refer patients to agencies that offer indigent or government subsidized care - so these people don’t go without. I can’t be everything to everyone and I don’t try.
Being in business doesn’t mean you don’t care, aren’t generous, or have to feel guilty charging for your services.
Nancy, while I agree with some of what you state, we also need to be more trusting of patients and their intent to pay. I give the benefit of doubt when seeing new patients and have not been burned often. The ones I feel we need to worry about more with finances are the people we choose to hire. I have been burned by my biller more than I have patients. If we always expect and treat our patients as if we are not going to get paid, then we may be doing a disservice to our business. It is also true that how you treat patients gets around also and that in turn brings in new business.
Good luck to all in business or thinking of opening a practice. It is rewarding, but we need to do our homeowork to stay in business and always remember, we will learn new things on a regular basis that will help you make the adjustments needed to survive.
Hi Grace,
I’m not sure you heard what I said. I didn’t say that I treat patients as if I am expecting not to get paid. I tell them what they can expect from me as their PCP and I tell them what I expect from them. After 23 years of running an NP practice with over 3,000 patients, I have had many more problems with patients than staff.
I have had three secretaries in 23 years. The middle one only stayed 1.5 mon. We didn’t fit. All new employees are on a 3 month probationary period to really see what they can do.
As an employer, you must oversee what your employees do and supervise them. I check my practice analysis and day sheets daily. I check my deposits daily. I check my patient aging reports monthly. Every day I can tell you what my accounts receivables are and know what my claims turn around time is as well as my clean claims rate. My average days to get paid is 10 days. When my secretary is on vacation, I can enter a patient claim, submit it electronically, adjudicate claims, and make deposits.
Each month I reconcile my bookeeping, and prepare a balance sheet and profit and loss statement. I do my own payroll and payroll returns. I have never been burned by any staff member.
If you don’t choose to do all these tasks yourself (and isn’t hard to learn with great software), you need to know how to run the business side of your practice and supervise those who do these tasks. The most common mistake I see NP’s in business make is that they know how to be good NP’s and they think that is all they need to do to run a successfull practice.
Nancy
Nancy,
Some of your initial email did sound very harsh, but I do applaud the second half of the next email. I truly did not know what my out sourced biller did as I had never done this before… she had billed for 5 years.. and the first time I got a denied claim because it went to a patients deductible, and the biller said “oh yea, you should have known that, doctor so and so always takes a deposit”…And I said “you know what, I did not know, I was new, my ma was new, but you could have been helpful and told us some tips..” I learned on my own what “registration was”….
So I never made that mistake again , and started to learn from then on… I also agree with Grace that some of what we learn, is literally by experience, and it is our job to learn. I agree that we are not just to see the patients but to know every avenue of our business. In the last 2 months, after having started to question my out sourced biller (at the very beginning you truly do not know the questions to ask, if no one tells you), she did not answer. That is when I began to wonder. I started asking around. Realized I had not received an aging report. (I did not know what it was, never heard of the term, but quickly learned) I was being the active one, and she was being passive agressive. I realized she wanted to keep me in the dark. With my new biller, and using a new clearing house, literally within one month, I have done all the posting, pulled the aging report, started working with the new biller, become familiar with all the claims addresses, and made sure they are on the proper forms for the biller, learned how to correct claims, and while I may not know every speck of accounts receivable, as it has only been a few weeks and our other biller left us in the lurch, I feel eons ahead of where I was. I feel that I know my patients, and I also feel that things can change.
You are right , some will take advantage, but once they know before they step in the door, that you know they have a deductible, and you show them you have a financial policy, and a cash policy that is consistent, they start to respect. But I disagree with hard collections. If it is for someone that ignores hundreds of dollars of co insurance, that is different. But as my first biller was literally not sending claims for 3 mos, patients did not even know they owed (as I did not know) until after they had come in for the 3rd or 4th time…
And yet you are right, they play coy, like they dont know how to read an eob. ..I also have struggled with the “nurse” issue, about co pays etc…because I am in such a tiny office, with a very passive front desk person, and I am so front line.. but I have become more hardline, even with the girls who work in the same building as me. I tell them, it is a legal issue, and that co pays and deductibles and co insurances have to be paid… but as a provider I will do my best for them…
But for most of my patients, they respect me, and they may test the waters, but they know I deserve to get paid.. and in return, I will not do hard collections. When I was ill and unemployed, I was sent to collections after two weeks for 20.00, on my credit for 10 years… There was no need for that. Only for those that refuse to commmunicate with you, and if I was not clear in the very beginning because I was learning, than for those first few patients, I will not take it out on them.
For example a couple mos ago, I did not have insurance. I do now. 438.00 a month premium with a deductible that I will tell people up front. But before that I went to an urgent care for a migraine. I told them up front I had no insurance.. I was told that the “normal” cash price was 135.00 but the front desk person took of 15.00 and I paid 120.00. That gave me the impression that was my total bill. Then I started getting bills from the billing dept for 45.00. One month later it was 55.00, then 65.00. I finally spoke to this biller and told her that the billing dept and the front desk need to be in line. If I had been told that my bill would probably go up after seeing the doctor, and it was not a guarranteed amount, than why discount me 15.00? It made no sense. It is all about communication.
But when you are brand new you make mistakes. And I can happily say, we have a long way to go, but I have learned a ton, and now know so much more about my business, and yet do not want to physically have to do every inch of it, but know now that I can! Carla
Hi Carla,
You are right it is all about communication which sets the expectations. I feel there is a role for a collection agency but certainly not after 2 weeks for $20. (There may even be state laws about that one.) But here again, the person who sent you to collections was the business owner - who set a policy. Now maybe an employee screwed up but ultimately the employer is responsible. I hope you brought it to the owner’s attention and amends were made on your behalf.
I set the policy about who goes to collect and review every one before it is sent. Last year out of 3,000 clients I sent three to collection. The point is you need to have a policy about your billing and enforce it. That’s not harsh. That’s running a business.
When anyone starts any business, you can’t be expected to know everything so you consult with the experts - an accountant, an insurance agent and a lawyer and set it up right from the start. Your accountant can set up your books and help you decide who will do the book keeping tasks if you dont want to. Some even help you with the hiring process for your business help. Using a clearinghouse may be the right decision but have you done a cost analysis? Are you doing paper or electronic claims? In house or outsource? There are great, reasonably priced billing software companies out there and they offer training and installation for you to to it in house.
Being a buisness owner means you are the boss - not a co-worker. It doesn’t sound like you don’t like your front end person. You say she is passive. Is that what you want in a front end person? Is she meeting your needs? Are you collecting everyone’s copay at the time of visit? If not, it is your job to find out why she isn’t doing this and take any appropriate action - greater supervision, education and training, maybe you’ll need to let her go.
As business owners it is our responsibility to supervise and ask if tasks have been done and check to see that they have. It is vital that you set up the business as a business correctly at the onset. You may think you don’t have the money but it will cost you in time, lost revenue and even higher accounting bills to fix it all later.
You have learned alot of this the hard way and it sounds like you are making progress. I feel bad that you had to have all this additional stress in the beginning. What advise would you give to someone just starting to avoid this? Nancy
Thanks Nancy and Carla, it is good to hear from the both of you on what you have learned and your experiences.
I have also been learning as I go along. I know I have lost a significant amount of money from my past billing experience, but I will never let that happen again. I am going to make sure I keep on top of what is being done in regards to my billing and receiving. I never wanted to focus on that side of the business but now know I have to be involved or close my doors. In my 18 months of business only one statement was sent out and no aging report ever done. I had no idea what a aging report was or how to start one. When I mentioned to my biller that we needed to be sending statements out she said she knew what she was doing and I should keep doing the patient care. I tried to tell her that even with my limited knowledge of billing I knew that was not acceptable practice, that conversation never made a difference in her billing practices. And on top of all that she was very slow to get to the daily billing.
As of this month I have taking over and am now learning from my new biller, whom I know is skilled and talented. I cant change the past but I can make my practice financially sound from here on out.
I have had a few problems with patients not paying at time of service, my fault and theirs, but I have gotten firmer with my payment up front at time of service policy and have had no complaints from any patients yet.
Nancy, I am always ready to hear new ways to help my practice grow and with your many years of experience I welcome any pearls of wisdom or suggestions you are willing to give.
By the way, where is your practice located?
Grace
Many of us learn as we go - we’ve not been exposed to the ins and out of running a practice, or any business for that matter. That education, has not been included in our degree programs. And that is the purpose of this site, and even more so, our new site at http://www.NPBusinessOwner.com.
Nancy has lots of wisdom to share with us all.
The announcement for next weeks call is due to go out tomorrow, but I’ll tell you now Grace…Nancy will be talking with us next Sunday (16th) on NPInterviews. I for one am really looking forward to this interview.
Barbara
http://www.NPInterviews.com
http://www.NPBusinessOwner.com
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Thank you Barbara. I am really looking forward to that interview and I am thankful to be off that Sunday.
Hi Nancy, and Grace. For Nancy, yes your insights are spot on. I have learned a ton, and some of it, may have been that I did not start with enough research at the beginning, but the beginning was kind of rocky. The space for the practice opened up where I live, and for that kind of rent, etc, nothing had been open for 5 years, and my dad died at the same time, and even though I wasn’t ready yet with the business plan, and as much knowledge as I should have had, I just had to jump right in, as you have heard the saying “best laid plans”..well, sometimes they go awry.
So for insight for others, I would say, if at all possible be prepared BEFORE opening, but kind of like the stock market or housing market, sometimes when an opportunity presents itself, you have to jump in, and learning comes afterwards, backwards or not.
My front end person suddenly made a turn around too. I think she was so distracted from her personal life, and we had a big talk, and she met the new biller, and suddenly I think she felt like she was part of a team, and she now wanted to be part of that team. She is more assertive, but also has gained confidence, and is able to laugh, interact better with myself and the patients. She realizes that this is my business and my philosophy and that how she acts in person and on the phone reflects me. She recently said it was a “blessing for her to be working for me”. She was not honest at the beginning due to insecurity, but now she realizes that by straight up telling me what she was shown in the past, or not shown, gets the best response from me, and then I am willing to teach her.
As you said it is all about communication. I am the owner, and I have had so many other things in my life happen all at once, that when it became apparent that the other biller was hiding soemthing, perhaps a lot of things, at first it was too much to take. But then I started to get stronger and realized that I have to just move right on through the muck, and now I feel empowered, as I have learned so much and we are getting caught up. Actually my old biller did me a favor, as I am no longer in the dark.
I knew by instinct that the biller and the owner have to have frequent communication, and be on the same side of the fence, and I did not have that with the old biller. My new biller and I talk by email or phone 5 x a week, and are starting to meet weekly. We are using a brand new clearing house Office Ally, so we are having to learn this, but they do have billing software to view claims, and stuatus, etc. We are doing electronic claims, and would like them all that way, but it turns out that Providence Insurance does not recognize Office Ally as one of their accepted clearing houses, so we will either use a second clearing house for them, or mail by paper and see how long it takes. I am just now starting to set some Policies for billing. I made up a very clear Sliding Fee Scale (SFS) for those that are uninsured, or cash pay. It is laminated, and I showed it to my biller, and my ma. I made it clear we are all to be on the same page with our billing policies. My new biller knows she works for me, the old biller somehow did not grasp that concept! We are setting a policy, that of course registration should be done on ALL PATIENTS BEFORE THE VISIT, but if for some reason money is owed by the patient, we send out a Reminder letter, written by me initially, and now the biller can put it on her computer, signed by “the billing department for Healing Presence” with her phone number…. We have agreed that things go in a monthly sequence. For example, we send out the reminder letter with a copy of the patient’s eob and their portion due circled. We give them one month to respond. Then there will be a stronger “bill or statement”, and if in one more month no response, a harder line may be taken. We have not gotten to that point yet. I think that is wonderful that Nancy out of 3,000 only 3 went to collections.
You made a very important point. I DID NOT HAVE AN ACCOUNTANT! Or office manager, or anyone doing bookkeeping. So this is something I would say as critical advice to an NP starting out to get this at the beginning. I tried several months ago, but some accountants referred to me, were not familiar with healthcare, or no longer taking new clients. Then, things came up, and I did not get back to it until tax time. If I may ask you Nancy, you mention bookkeeping and accounting. What role should the accountant play? I am getting someone of course for my taxes, but I hope he is able to be there for me for the practice, and for the entire year. I incorporated initially, but then “backwards again”, wanted to be an S corp, and never got around to getting to the attorney /accountant part, so I am a C corp by default. I am hoping to change that this new year, so I can take a “draw” or salary, and put the rest into the business. I have a payroll service, ADP, which right now, I do the payroll for my one ma, and once I get myself set up as an S corp, I will put myself on the payroll too so I can get paid a regular bi monthly check.
Regarding Grace, that is great that you have found a wonderful biller. They are like gold. Would love to hear your progress as you move along. Thanks again, and look forward to your interview, Nancy. Regards, Carla