Published - April 2013

By Dave Jakielo

Lead, Follow or Turn Out the Lights

I was re-reading the booklet written in 1988 by Pritchett and Pound, Business as Unusual. Its premise is how to survive in an ever-changing environment similar to our current medical billing marketplace. It is hard to believe it was published over a quarter century ago but it couldn't be more relevant based on what we are facing today.

Let's take a look at the past, present and future of our industry.

In the PAST, billing companies enjoyed a high-profit margin even if they weren't very efficient. Some characteristics of a typical company from these days gone by were:

  • A stable, long-term client base.
  • Little pressure to reduce management fees.
  • Low employee turnover (and some folks we employed could be slackers).
  • You sent out a bill or insurance claim form and someone paid it the first time.
  • Paper, paper and more paper passing from workstation to workstation. We would date stamp it, alphabetize it, file it and store it forever.

Companies made money because there was so much fat in the system. Even poorly run companies could turn a profit.

PRESENTLY, billing companies are noticing that profits might be shrinking and margins are being squeezed due to lower reimbursements and higher operating costs. One example is when Pritchett and Pound published their booklet, first class postage was 25 cents and today it's 46 cents. Other issues facing us today are:

  • An ever-changing client base, as acquisitions and mergers are prevalent in many medical practices.
  • &Management fee pressures prevail as rates are dropping due to some companies becoming more efficient.
  • Moderate-to-high employee turnover depending on the economy in the area your company is located. We still put up with people who don't give 100 percent.
  • A substantial increase in third party rejections, denials and patient deductibles.
  • Still too much paper handling, which increases costs and hinders productivity.

Companies are finding it more challenging to maintain the margins and profits they enjoyed only a decade ago. Because of the ever-changing rules and regulations, we are also learning that there is no such thing as an Experienced Biller.

So, what lies ahead in the FUTURE? The billing industry won't go away. There will always be a need for our services, but it will go away as we know it today. Companies will be larger and there will be fewer of them.

  • You'll need to be prepared to work with larger and larger clients.
  • Pressure to reduce fees is here to stay and we will always need to find ways to do more with less.
  • Your employees will expect job diversity. People won't want to do the same function for 40 hours a week. Plus, everyone will need to be highly productive.
  • The following will need to become second nature in your company 270-271 and 276-277 and patient portals. If you don't know what I'm referring to just do a Google search.
  • You'll need to adopt a totally paperless environment. Deal with only with the exceptions and allow technology to handle the bulk of the work.

Conservatively speaking, I predict that about 30 percent of the companies in business today will disappear. And your company may be one of the fatalities unless you are always on the path of continuous improvement. This isn't a prediction, it's a calculated guesstimate based on what is going on around us. The key is to constantly examine each and every process in your firm and asked yourself these questions:

  • How can I eliminate this function, policy or procedure?
  • How can I improve on this function and make it faster and cheaper?
  • What other revenue generating services should I be offering to my clients?

In summary, we need to: 1) Lead, by continually growing business revenue 10 to 15 percent per year; or 2) Follow, by merging with a company who has similar goals, objectives and values.

Or, you can do neither, and the only task left at your office will be to turn out the lights.

Dave Jakielo, CHBME, is an International Speaker, Consultant, Executive Coach, and Author, and is President of Seminars & Consulting. Dave has been helping Companies grow and improve their profitability for over four Decades. Sign up for his FREE weekly Success Tips at Dave can be reached at or 412-921-0976.

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