Strategies for healthcare finance pros to find revenue in all the right places
Healthcare organizations are managing financial challenges on multiple fronts: reimbursements are declining, new business models like value-based care and telehealth are on the rise, and pandemic-related disruptions to procedures ebb and flow. As a result, healthcare finance leaders are tasked with looking for predictable, repeatable streams of revenue to maintain the health of the business.
Across the industry, we see healthcare organizations trying new and innovative ways to generate revenue. For example, dental organizations are offering more whitening products and toothbrushes, senior care organizations are piloting food delivery services, and a variety of specialties and primary care physicians are offering memberships that provide patients with VIP care, prime appointment times and more, just to name a few.
I recently explored this topic at our Transform conference with two healthcare finance leaders, Blair Myers, Vice President of Finance & Accounting at Vets Pets, which owns and operates 26 veterinary hospitals in the state of North Carolina; and Anthony Scaltreto, currently an independent contractor and the former Manager of Finance for Walden Behavioral Care, which operates mental health facilities specializing in eating disorder treatments.
For Anthony and Walden, the ability to offer telehealth in the mental health space helped increase patient access to care during the pandemic and allowed the company to streamline its use of physical locations while still growing tremendously, something they never would’ve been able to do before given previous laws and regulations around telehealth. Amidst the unknowns of how long the pandemic would last, Anthony and his team had some apprehension around starting telehealth, given the need to invest in the capabilities, and uncertainty around if and how reimbursements would continue. By analyzing Walden’s telehealth revenue by locations using Sage Intacct, Anthony and his team were able to determine which locations and patient populations the service was best suited for and adjust accordingly.
Anthony told me, “We could not have done this without Sage Intacct’s Budgeting and Planning (SIBP) module. Our executives asked us what we expected to happen to the company if we switched to telehealth, which you can imagine was a scary moment. The SIBP module really helped us to forecast what was going to happen to our organization and allowed us to develop a few different models where we said, ‘What if we don’t do telehealth for a month?’ Or, ‘What if we close all the clinics for a month and hope that this two week stay-at-home dissipates?’ Which we now know did not happen…”
Walden also looked for new ways to treat patients, exploring partnerships with other area organizations to open larger inpatient and residential facilities, licensing providers to administer intravenous medications in-house instead of transferring patients out to the hospital, and expanding pharmacy services to ensure patients could pick-up regular medications from their trusted providers.
Exploring the world of pet care, Blair’s experience largely mirrored that of human healthcare in many ways. With the pandemic spurring a significant increase in pet adoption, Vets Pets experienced 50-70 percent growth over the last 12 months (compared to 10-15 percent during non-pandemic years) largely in the ER and 24-hour practices, with no end in sight. In determining new areas for growth, Blair and her team explored a combination of new practices and locations, opening much-needed emergency facilities, and expanding hours at existing practices to meet demand, and also examined ways to offer new services.
Some of Vets Pets new service offerings include wellness plans, which involve a regular monthly fee and come with unlimited exams and other perks. This is something that we at Sage Intacct are starting to see grow in other areas of the industry, including primary care. The addition of four ultrasound machines (which used to only be available at their ER locations) at general practices now allows this in-demand specialty service to be completed, in a timely manner and not in an overwhelmingly busy emergency setting. When deciding on whether to offer the service, Blair and her team used Sage Intacct to help weigh the cost of the machines, the doctors, the techs, and the demand to determine if their desired pricing and margins made sense. What’s to come? Outpatient ultrasound in 2022 along with expansion in new markets.
Strikingly similar to Walden, Blair and her team have launched a program with their veterinarians called “Flip the Script” – which aims to keep prescription revenue in the practices. They are doing this by partnering with a veterinary pharmacy company and offering their own home delivery service, rather than losing prescription revenue to online retailers like Chewy.
Both Blair and Anthony shared some good advice for peers who are tasked with finding new streams of revenue for their organizations:
- Experiment and measure the results. To the extent that your organizational culture allows you to conduct a pilot program, be bold and see what happens. At Walden, telemedicine was a scary but successful shift during the pandemic. That same shift at Vets Pets had varying results by location. You won’t know until you try – and then analyze the data.
- Go into the field for ideas. Blair explained to me that she regularly goes into the field and meets with the operations team and her partner veterinarians and asks them basic questions like, “What’s working in the day-to-day? What’s not? Do you have an idea of how you want to grow?”
- Try new technology. Both Blair and Anthony utilized new technology to drive new revenue. With Walden, it was Zoom so that they could continue seeing patients during shut-down; at Vets Pets, it was a new scheduling tool so that sister hospitals could see each other’s schedules and divert patients so as not to lose the service and associated revenue.
- Use the data to create buy-in. Both Blair and Anthony had to get executives on board with new ideas and develop models for potential outcomes. In her discussions in the field, Blair brings KPIs, dashboards and reports from Sage Intacct and other critical systems to explain growth, production, revenue per patient, number of new patients and active patients, and forward bookings so her partner veterinarians feel informed. At Walden, Anthony used SIBP to forecast the potential impact of using telehealth in a variety of scenarios.
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