Much of the attention in the healthcare industry has been directed towards the arrival of the Patient Affordable Care Act. Planning for mandated changes and implementing systems to support them has kept providers and their industry partners busy.
Yet, the pressure for growth and opportunity offered by innovative products and services that often underpin growth must extend well beyond governmental and regulatory changes. To find those breakthrough growth opportunities, healthcare leaders must remember some of the changing economic conditions, evolving customer demands and increasingly sophisticated technology in their industry. For example:
Consumer Paradox. According to an American Osteopathic Association survey, 30% of patients are skipping primary care visits to save money and 50% are considering budgets before making health care decisions.1 At the same time, the American Society of Aesthetic Plastic Surgery's Market Report found that aesthetic medicine has grown to more than 11 million procedures annually, with 12 percent annual growth.2
New Outlets for Receiving Care. As with many industries, convenience is driving healthcare development. Retail based walk-in clinics have become accepted such that by 2015, it is estimated that 10% of primary outpatient care will be done at retail clinics according to the Deloitte Center for Health Solution's Retail Clinics: Facts, Trends and Implications report.3
Growth in Overall Population and Aging Patients. The U.S. Census Bureau reports that between 2010 and 2050, the U.S. population is expected to grow by 31% with the aging portion of that population increasing from 13% to 20% and doubling in size to 81 million people. 4
Growth in Physician Adoption of Technology. By 2014 90% of physicians will use a smartphone, while 53% are using tablet computers in their practices as found in Epocrates 2013 Mobile Trends Report.5
Health companies that can find innovative and adaptive strategies to address these changes will have significant growth opportunities over the coming years.
Increase profitability from your existing services
Using a cost accounting product or service analysis, (Resource Based Relative Value Scale (RBRVS) would be the process of choice for providers) which compares the resources necessary to provide a service, you can review existing services to identify those that produce the highest revenue and profit. With analysis in hand, your company can then make determinations on how to handle under- and over-performing services. You may consider eliminating low-profit services, or simply focus on promoting high-profit services to your existing customer base and external audiences in an effort to increase volume and profit from an existing area of strength.
Add new services or extend to new geographic markets
New services can strengthen the delivery of value to existing clients while offering revenue growth to the business. Analyzing your existing customer base to determine needs and wants is a smart way to identify product extensions. For example, convenience-minded patients may make adding "one-stop" services such as lab work or conventional radiology services very profitable. Likewise, recurrent issues within your patient base such as obesity or diabetes could make the addition of nutrition counseling services a profitable competitive advantage.
New locations, if chosen wisely, can also increase volume and enhance profit. Growing or changing neighborhoods with similar demographics to your existing customer base will be best suited to replicate the business model already in place. Creating a new unit with the same core functions and operating principles as the original location will make opening and operating a new site seamless.
Leverage IT to manage cash flow and increase profitability
Cash flow is one of the most difficult things to manage in the healthcare business considering the multitude of payers and benefit plans with which office staff are forced to deal. Employing an electronic billing system can offer more efficiencies in cost and cash management as it speeds payments and collections directly into your bank accounts. Healthcare lockbox services should also be considered as part of the mix to handle automated claims processing, patient payments and point of service transactions. By imaging EOBs and related patient payments, as well as reconciling deposits, lockbox services make it easier to view and manage the complete payment process.
Increasing your facility space to better serve your patients with additional staff and services can have a strong impact on customer retention, delivering value and, in turn, profitability. With larger facilities, your business will have the flexibility to make the improvements necessary to operate more effectively and efficiently. In today's environment, it may also be a benefit to purchase a facility instead of leasing. Owning a facility provides your business with an asset that could be leveraged for additional capital, possible tax advantages and/or potential diversification of your revenue stream if there is space available for rent to other entities.
Create strategic advantages from change
Companies who address the many changes underway in the market have a great opportunity to optimize revenue, manage costs and improve profitability. To do so, you might ask yourself questions like:
- What are the major changing technologies, customer behaviors or competitive changes that we should be following?
- What current programs should we invest more in to drive revenue, lower cost or gain competitive changes?
- What ideas have we got that we should be piloting and learning about?
By capitalizing on emerging technologies and shifting customer demands and habits, your business can minimize the impact of variable regulations and tighter cost controls while establishing a framework for long-term success in the healthcare marketplace.