August 15, 2021
What is profit and does your clinic need it?
Kate and Celia chat about how to uncover your hidden profit and the identify the leaks which are costing you #WealthWednesdays
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Kate Markland: Good afternoon and welcome to Wednesday, 18th of November. Today we are talking about discovering the hidden profits in your healthcare business. Our theme on Wednesday is all about wealth, wealth creation in your clinic. So where are the hidden profits? So many clinicians and clinic owners run at breakeven or making a loss , or even just a very small profit and they might well not be playing themselves. Maybe even not as much as they could have been if they stayed in the public health sector and it is not okay, obviously. And it’s also not sustainable. So today we want to be thinking about every Wednesday, how are you going to find more profit within your clinic so that you can reward yourself and reinvest. so today we are going where the obvious places to go find the hidden profits.
Celia Champion: Well, I think one of the key areas, as you know, in order to kind of make more money, is to put your prices up. A lot of clinic owners do not review their prices for awfully long time. And then when they do, they agonize over whether they’re going to put them up or not, have a look at the different revenue streams of your business as well. So, are you heavily reliant on insurance? Are you getting paid enough for those insurance patients? How long are those insurance patients taking you compared to private patients? So stop look and seeing where you should be focusing more on. Self payers and then very obvious other place to look. Then it is just be very aware of all your expenses and, don’t just be the person to renew your contracts year in, year out. Such as your telephones or your utilities, look around at your insurances, have a look around and see that you’re all getting, the most competitive price for the service that you get. And I’m not saying that you should get the cheapest, because you still want to get the right service. So it is just making sure that you are getting the most competitive price for the type of service that you’re offering.
Kate Markland: I think one of the most effective ways to help cut costs is to share them, to list all of your expenses and share them with somebody else, because that helps you become really accountable and to explain why the expense is or isn’t needed then you can reduce your expenses. But I think sharing expenses will help you challenge yourself and help them challenge you. So really do need that subscription or not that you just haven’t renewed, just have a look around for bit.
Celia Champion: And I think the other thing to consider is looking at, your contacts with your team members. So, you know, I think a lot of clinics, the kind of standard model in the past has always been, associate model and some, some of the contracts are extortionately high in the favour of the associate, and it just does not make business sense to be paying an associate 60, 70% of the revenue because, you know, you’ve still got to sustain your business. You’ve got to make the business profitable so that you can continue operating. And, sometimes an employed model is a better, more cost effective model. And it certainly is worth looking into that as well. I’ve had a few clients that have changed over, and haven’t looked back.
Kate Markland: The other thing that Celia brought up is looking at your income and your sources of revenue and having, a review of those. So looking at what your pricing structure is, and whether it can be addressed, adjusting your price for existing clients, but also reviewing the price and structure that you have for insurance companies and to have courage to stop. It is really worthwhile taking time to understand what your profitability is on each appointment, because then you can start to see which insurance companies are probably actually costing you to deliver the care to, and then will not have an issue. If you realize it’s costing you to deliver some of those insurance appointments write to that insurance company within new pricing structure. And you can very firmly tell them as of the 1st of January, these are the prices . You take two charge. If you want my clinics still deliver with services, this is the prices or not,
Celia Champion: Another probably indirect place where your profits might lie is how you are running your time. So if you’re kind of thinking I’m going to save money by doing the cleaning, by doing the bookkeeping,
by doing every single job in the set under the sun in your clinic, actually what you’re doing is you’re detracting away from you being able to build your practice and get more patients through the door and, you know, build a much more sustainable business because you’re spending your time. Cleaning for example you could get a cleaner for, I don’t know, 15, 20 pounds an hour. You could get a bookkeeper for 20, 25 pounds an hour. And even if you just looked at that in terms of, if you could treat patients, instead of doing that, let’s say if you’re charging 50 pounds a session for your, treatment, you’d be earning a hundred pounds an hour compared to, using five hours to do your bookkeeping. So whilst you might think I’m not saving money actually in the long-term you are. So you need to also make short-term decisions for long-term benefits.
Kate Markland: Wonderful. So if your looking at your pricing and have confidence to put your pricing structure where it should go, and have the confidence to understand the profitability on your insurance companies, on the contracts with them. And negotiate the same with your expenses, reviewing all their expenses and seeing what you can cut because it’s unnecessary. Which of the contracts can you renegotiate or restructure and that’s not just with expenses like the telephone but also with your team. And then finally having to look at where you’re spending time, doing tasks that are low paid tasks. Somebody is far, far better off doing then you
, so you can be doing higher revenue activities. I hope that’s given you some tips and help to find new profits in your clinic. Tomorrow is continuing on the thankful thursday theme. And we’re looking at all the things that we can be grateful for. So take care. I hope you enjoyed that and we’ll see you tomorrow. Bye bye for now.
Celia Champion: See you tomorrow. Bye.
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