Business as Unusual
By Dave Jakielo

I was rereading the booklet written in 1988 by Pritchett and Pound entitled Business as Unusual. Its premise is how to survive in an ever-changing environment like our current medical billing marketplace. It is hard to believe it was published over 35 years ago, but it could not be more relevant, considering what we are facing today.

Let us look at the Past, Present and Future of our industry. In the PAST, billing companies enjoyed a high profit margin even if they were not very efficient. Some of the characteristics of a typical company from days gone by include:

• A stable, long-term client base
• Not much pressure to reduce management fees
• Low employee turnover, including some employees who could be slackers
• Mainly working on one practice management system which may have been your proprietary system
• Mailing out a bill or insurance claim form that was usually paid the first time around
• 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 that even poorly run companies could turn a profit.

PRESENTLY, billing companies are noticing that profits may be shrinking, and margins are being squeezed due to lower reimbursements, an increased number of denials, and higher operating costs. One example is when Pritchett and Pound published their booklet, first class postage was 25 cents; today it is 73 cents. Other issues facing us today include:

• An ever-changing client base as acquisitions, mergers, and retirements are prevalent in many medical practices
• Management fee pressures prevail as rates are dropping due to some companies increasing their efficiencies
• Moderate to high employee turnover, depending on the economy in the area where your company is located; we still tolerate employees who do not give 100 percent
• Working on multiple practice management systems in addition to your own
• Employees requesting to work from home full or part-time
• A substantial increase in third party rejections, denials, and patient deductibles
• There is 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 the term “experienced biller� can no longer be used.

So, what lies ahead in the FUTURE? The billing industry is not going away. There will always be a need for our services; however, the number of companies will be reduced, as we know them today. Companies will be larger and there will be fewer of them.

• You will 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 will not want to do the same function for 40 hours a week. Plus, everyone will need to be highly productive.
• You will need to employ more professionals and fewer clerically skilled FTEs.
• The following will need to become second nature in your company; working with Robotic Process Automation and Artificial Intelligence.
• You will need to adopt a paperless environment. Deal with paper only as an exception 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 is not a prediction – rather it is a calculated guesstimate based on what is going on around us. The key is to constantly examine every process in your firm and ask yourself the following questions:

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

In summary, you will need to continually grow your businesses revenue 10 to 15 percent per year. Or, you can merge with a company that has similar goals, objectives, and values and become an employee. Another option is to develop an exit strategy and sell your company. However, if you do not complete one of the above two goals/action steps, then you will need to turn off the lights when your last client leaves.

Dave Jakielo is an International Speaker, Consultant, Executive Coach, and Author, and is president of Seminars & Consulting. Dave is past president of Healthcare Business and Management Association and the National Speakers Association Pittsburgh Chapter. Sign up for his FREE weekly Success Tips at www.Davespeaks.com. Dave can be reached via email Dave@Davespeaks.com; phone 412-921-0976.