An email arrived last week asking me to call a prospective new client.
He’d been reading my blogs and wanted help to grow his practice.
In particular, he wanted a review of the performance of his practice and asked if I would call and arrange to go see him.
In his email, he said he thought he should be seeing more patients and his current patients should be paying quicker too.
I don’t even charge for this as occasionally there are only minor items that require attention.
So I called the telephone number provided and was promptly put on hold.
Nobody expects to have a phone answered immediately every single time. It’s not normally a problem.
Or is it?
Where I did have a problem with this particular call was being told “your call is important to us” every 15 seconds whilst listening to awful music.
Whilst listening I looked at the consultant’s website.
It was very good and promoted the consultant really well. Details of his practice were impressive. The photograph of him on his website was very professional. The contact page was really good.
A “Frequently Asked Questions” page was very comprehensive. A “contact us” page contained phone number, email address, and location. They were all available for the patient to see.
Meanwhile, I was still being told: “your call is important to us”.
Then I started to think about it from that point of view.
If I’d have been a patient wishing to make an appointment I might well have hung up by now and called another consultant.
The patient may have been referred to that particular consultant by his/her GP or even by an insurance company so from that point of view the patient remains on hold and waits.
But what would happen if the patient had not been referred to the consultant by a GP or an insurance company?
In other words, he had a choice.
All patients have a choice.
A private consultant surgeon is in the service industry. It may be medical but it is still a service. And that means the service must be first class. Not just first-class medical treatment.
The level of customer or patient service is a big factor in the patient’s choice.
Every single part of the patient’s journey, therefore, MUST be 1st class.
That most definitely includes having the phone answered promptly.
It’s the little steps that matter when you are running a business and a private medical practice is a business.
Charge the right fee.
Make sure you invoice quickly.
Take steps to collect all outstanding shortfalls and excess amounts.
If the practice is difficult to contact the number of patients will drop.
When I finally got through and spoke with the consultant we agreed to meet next Wednesday.
One of the items for discussion will be his patients struggling to actually speak to his practice in the first place.
If you want a quick review of your practice send me an email!
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I left school more years ago than I care to remember.
Then as now I make sure I do my homework though.
The only difference is now I do it for private medical consultants some of whom are thinking about starting a private practice.
All of you have done your fair share of homework in the past.
The journey to becoming a surgeon is not exactly an easy one.
Lots and lots of work, study and long, arduous hours. There is lots of homework on the way too. Followed by even more work, study and long arduous hours. There is even more homework thrown in after that.
Then you are qualified.
But to start a private practice add on about five years of post-qualification experience and hey presto you decide to open a private practice!
That is more or less the path a surgeon (friend of a current MHM client) took.
I was asked to go chat with him about starting a private practice.
As the geographic area concerned contained a major urban conurbation, the population numbers were high. So that ticked the first box!.
There were three private hospitals within a 25-mile hospital too. The second box ticked.
When I checked the number of consultants at each hospital (Google is a mine of information) there were 22 at the first, 15 at the second and 15 at the third. The third box ticked.
I’d done my homework and established there was a demand for my surgeon’s specialism within the area.
The surgeon, when we spoke, was really pleased to hear the results and was in no doubt my homework confirmed he would be able to start a successful private practice.
It was that last item – the number of consultants already in place – that concerned me.
Could it be that the demand for his specialism was already being satisfied by the 52 consultants already providing his specialism?
My surgeon friend would have to compete with those consultants.
He would have to market himself to potential patients and see enough patients to make his private practice pay.
His fees from private insurance companies would have to be sufficient to cover his costs AND make a profit.
He would have to provide all the support facilities to run his private practice which would cost money.
Then he would, of course, have to pay tax on whatever was left.
Let me be clear I was NOT saying don’t start a private practice.
I was suggesting that the demand for his specialism might already be satisfied by his competitors.
He should, therefore, be fully aware of the difficulties he would face BEFORE he started his private practice.
All because I had done my homework.
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Every time I give a presentation to consultants wishing to start a private practice it’s pretty much guaranteed, I’ll get asked about having a website. In particular, I’ll be asked – do I need one?
Short answer: YES!!
Ah! – Comes the response from a fellow presenter with a very well established practice – I don’t have one. I don’t need one. That may be so because he is well established. But for someone just starting out being on the private hospital’s website, just being on the PMI website or on a directory of consultants is not enough. Neither is, although still a big source of referrals, having patients referred only by a GP.
Patients are much, much more switched on these days. They will trawl the Internet looking for whom they consider being a suitable surgeon with whom to book a consultation. They may still ask their GP for an opinion. And then be concerned if the GP recommends another surgeon because the surgeon is a friend of the GP. What does the GP do if he doesn’t know a suitable surgeon? Yep – he goes to the Internet too.
The bad news is that it is not just a case of building a website. I call it the “build it and they will come” principle. Websites need to be maintained and refreshed – at least every six months. Then there is the question of social media.
MHM doesn’t build websites nor do we manage social media for its clients. It’s far too complicated. We just pass on the requirement to one of our partner organisations.
Based on the analysis of MHM clients with a website and those without, it is pretty clear those with a website see more patients.
You sure you can’t be bothered with all this Internet stuff?? How many of you still rely on GP referrals only?
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A consultant surgeon came up to me after a recent presentation asking for my opinion on a situation he’d found himself in.
Having successfully operated within the NHS for some time he decided to open a private practice. Before he jumped in the water, he never considered such questions as “how deep the water was?”!
Therefore he’d contracted to pay room rental.
He had employed a medical secretary
. His website was built.
He may well need all of these at some point.
He had not, however, stepped back and researched, for example, how many colleagues already had a private practice in the same specialism as he did.
If he had, he would have discovered there were 8 of them. Great. There is obviously a demand for that specialism.
BUT the flip side is that the demand is already being satisfied.
He had however asked a well-established colleague how many patients the colleague saw and how much he charged. About 12 a week with a £200 initial consultation fee and a £150 follow up fee i.e. average of £175 per patient, came the response. Circa £2,000 a week’s worth.
So the consultant surgeon was concerned as to why he was only seeing 2 or 3 patients a week and his consultation fees had been set at £136 initial and £75 follow up from a major insurance company. An average of £105.50 per consultation.
Well, his colleague had been recognised by the private insurance companies as far back as 2012 and his private practice had built up over the years.
So there are various points he failed to consider before opening his private practice.
None of which means don’t open the practice but they do mean seriously think about issues before deciding to open such a private practice.
Or in other words, make sure you know how deep the water is before you jump in.
How many of you have found yourself in a similar situation?
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Following on from yesterday’s post a consultant emailed me regarding his goals for 2018.
We’d known each other for a while. Indeed we had begun speaking when he had not achieved his 2016 goals. Because they were actually wishes. More money. Increased number of patients. Sadly even if they had been specific goals, the chances are he wouldn’t have achieved them anyway. Why?
In any business, 20% of what you do, results in 80 % of your profits. It does not have to be 80/20. It can be 60/40 or 70/30. But the overriding rule is that some things contribute more to a business than others. Flipping that on its head means 80% of what you are doing could only be resulting in 20% of your profits.
That is precisely what the private consultant surgeon was facing.
This consultant had private practicing rights in three different hospitals. On the two days a week he opened his clinics or attended theatre, he drove to hospital A. After this clinic, he got in his car and drove for an hour to Hospital B. Once his clinic at Hospital B was over, he got back in his car and drove for another hour to Hospital C. After that clinic he went home.
He also had a 6-week waiting time to see him at Hospital A.
At the very least, he was driving two hours each day. Once on a Tuesday and once on a Friday.
Which in my view, at his normal hourly rate of £250 per hour, equaled £500 worth of lost revenue. Twice a week equates to £1,000. Looked at another way, 20% of his day was generating him precisely ZERO.
His answer to the question WHY? was met with the standard – “that’s where the patients want to see me”
When the issue was looked at from another angle, however, it transpired the waiting list was highest at the hospital nearest to him. Hospital A. Indeed he saw the fewest patients at hospital C i.e. the one furthest away. He saw a few more patients at Hospital B than at Hospital C but nowhere near as many as at Hospital A. Hospital A incidentally, accounted for 70% of his referrals anyway.
In January 2017, he gave up his practicing rights in hospital C. Fearful of too much change – sensible man – he maintained his rights in Hospital C. The hour he’d saved by not driving to C was used to see more patients at Hospital A. The number of consultations increased. The additional revenue generated was very welcome.
Curiously such was his reputation that patients who would have seen him in Hospital C, drove to see him in Hospital A.
In May of 2017, he gave up practicing at Hospital B. As before he used his “driving time” to see more patients at Hospital A. 70% of his referrals still came from hospital A. But patients could be seen much quicker. That in itself was attracting more patients. No more 6-week waiting list because he had an additional four hours a week to see them.
By the end of October 2017, he was seeing more patients than he had seen during the whole of 2016. He was also making more money.
He had stripped out anything that didn’t contribute to revenue
His targets were more specific. He had achieved his goals. Sort of.
He did not know if he had seen as many patients as he wanted to because he hadn’t set a specific number
He also didn’t know if he was making as much as he should have been because he hadn’t set a specific target.
Which brings us neatly to 2018.
His targets for 2018 as follows:
a 20% increase in the number of consultations held in 2017
a 20% increase in revenue generated during 2017
Now he’s getting somewhere.
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That perhaps is one of the statements, I hear from private surgeons more frequently than others.
The following example, however, illustrates that despite the rejection of the fee, examination of how the fee was established confirms there is little the consultant can do about it.
The consultant surgeon concerned only recently applied to be recognised by the private medical insurance. That in itself is not too difficult a process. MHM spoke to the consultant and pointed out fees should be carefully checked when recognition was being arranged. The consultant was extremely well qualified, had held a substantial NHS post for a number of years and his/her specialism was in high demand. The private medical insurance policy was keen to offer recognition. The recognition was thus granted.
MHM was subsequently asked to handle the medical billing side of the practice. In order to do so, we need to know how much the outpatient consultation fees were. Even we can’t charge if we don’t know how much to charge. The medical professional did not, however, know what the consultation fees were. Alarm bells started ringing immediately.
Fees incidentally that they would have agreed to and would have been detailed in the pack supplied to them by the insurance company concerned. So we called the insurance company.
The insurance company, as usual, advised the consultant had agreed to their published fees.
It is always amusing when “fair and reasonable” is quoted. It depends on what the consultant thinks is “fair and reasonable” against what the insurance company thinks is “fair and reasonable”. What happens if the thinking differs between the two? And that is precisely what happened in this example.
The insurance company deemed that £100 was a fair and reasonable fee.
The medical professional deemed that £175 was a fair and reasonable fee.
And thus the consultant instructed MHM to charge a consultation at £175.
MHM pointed out that it would indeed charge £175 as instructed. All that would happen though, is the insurance company would reduce the value of the invoice down to the £100 originally agreed.
And that is precisely what happened. Despite the medical professional objecting strongly to a consultation fee of £100 and insisting a “fair and reasonable” fee was £175, the invoices were reduced in value.
It mattered little to the insurance company that the MHM client had colleagues who were both charging and getting paid £175. Even before I asked the question I knew this was to be true. It mattered even less to the insurance company that a second colleague was paid more than £175 for a consultation. This was so because the second colleague was in a completely different specialism!
Sadly the MHM client had based their practice business plan on a consultation fee of £175. They had done so because they had asked colleagues how much they were paid. They had then assumed such fees would equally apply to them.
MHM, per normal, had no issue calling the insurance company concerned and arguing the case on behalf of the medical professional. That said it was an argument that was never going to be won. The simple reason remained that at the point of recognition the MHM client had accepted the fees. It mattered little the client hadn’t fully understood what was being offered (despite the fees being detailed in the recognition pack sent to the client).
Sure enough, the insurance company stood firmly behind its agreement with the consultant.
The moral of this sorry tale is best summed up by the above heading. I’m not suggesting you shouldn’t challenge fees for consultations or indeed a surgical episode. But don’t put yourself on the back foot by accepting fees and then challenging them. As painful as it is for the MHM client, it really is as simple as that.
Check your fees before you agree to them!
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One of the most common remarks I hear from my guys is the number of patients they see in the NHS. They literally have patients queuing up to see them. Such a comment is normally followed by the opposite when discussing a private practice.
They want to see and need to see MORE patients.
This, for me, confirms the absolute cultural difference between the public and private sector.
In the NHS, a consultant surgeon does not have to do much in order for patients to be delivered to them.
In the private sector, the precise and exact opposite applies.
In the private sector a consultant surgeon, because fundamentally a private practice is a business, MUST do everything he or she can to attract a patient. He must engage in pro-active marketing. He must ensure it is known his practice is there. First of all, however, he must comprehensively understand WHY a patient is choosing to go private. It is not merely the case of a patient wanting to be seen privately because he or she has private medical insurance. It is understanding WHY the patient has private medical insurance. I, for one, dispute it is because private care is better than NHS care.
More likely it is because the private patient wishes to be seen quicker.
If the patient can be seen at the private practice quicker than at an NHS location but the patient is unaware the private practice exists then all bets are off.
Therefore a marketing plan of some description is an integral part of a private consultant surgeon’s business plan. And therein lies the reference to the first and absolute cultural difference between an NHS practice and a private practice.
A Private Practise is a business.
In an NHS practice, patients will be delivered to the consultant surgeon without even asking.
In a private practice, patients will not just be delivered. They have to be attracted to the practice.
Note the use of the word BUSINESS. A private practice is a business.
This is not the time to discuss which marketing strategies will and do work best for a private consultant surgeon. This blog is more concerned with highlighting that due to the differences between the NHS and the private sector, a private consultant surgeon has no choice but to have a marketing strategy.
Just as a consultant must have a robust infrastructure to support the business (secretarial support, invoicing, banking etc), it is equally as important to have a marketing strategy
Look at it this way, if any business does not have a regular number of customers or clients (in the case of a medical practice PATIENTS) then inevitably the business will not succeed.
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They are not just for tax reasons. They are not just to keep the accountant happy. There are time critical reasons too.
A remittance advice confirms the values that have been paid in respect of invoices submitted by the medical practitioner. It is a mistake to assume that the invoice will always be paid completely. It may not be.
For example and taking one remittance received by an MHM client.
Of the ten invoices paid on the remittance, four of them detailed deductions made. Deductions were made against the value of the invoice originally submitted. 40% in other words.
This is why remittances should be checked. And before they are stored for tax reasons or to keep your accountant happy.
In the above example, each invoice detailed on the remittance was reconciled against the appropriate entry on the consultant surgeons debtors ledger. Only then was the payment made recorded appropriately. It was then the number of deductions were immediately identified. In this example the total came to some £350.
The next step is to identify why the deductions have been made.
Whilst all four deductions were correct and were in respect of excess amounts it is surprisingly common for a deduction to have been made in error.
In the recent past, one MHM client had an invoice for surgery deducted in full because the patient’s policy had expired and had not been renewed. At least according to the patient’s insurance company it had expired. It had done so after the date of the surgery. In this case at the precise date of the surgery, the policy as “live” and consequently the insurance company were wrong the decline the invoice for payment.
A call to the insurance company concerned quickly identified and confirmed the insurance company were in error and the invoice immediately cleared for payment. Insurance companies do make mistakes. Not many thankfully but they do happen.
If the deduction is correct however, then immediate action should be taken to contact the patient and a request made for payment – by the patient – be made.
So the number and reasons why deductions have been made by a private medical insurance company can easily be identified and subsequently actioned on behalf of the consultant surgeon.
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During a conversation with a friend of mine recently, I pointed out that our clients had some things in common.
For one thing, they are consultant surgeons.
And that means they are all supremely qualified. They are right at the top of the game. They have to be because the patient’s life is sometimes – literally – in their hands.
Then my friend made a really interesting point.
He said as a surgeon (he IS one) both he and other consultants are VERY used to asking for a second opinion from another consultant surgeon.
Yet he could not understand why when it came to running their private medical practice, there seemed to be a reluctance to go out and seek the opinion of an expert in running a private medical practice.
Maybe its because after all the years of training, our clients are so highly trained and skilled they are almost hardwired to perform in a certain way. What is curious is that other professionals i.e. non-medical professionals have a similar tendency.
They too are reluctant to ask for expert help.
And there is nothing more dangerous than someone who thinks he knows but in reality doesn’t.
What don’t they know?
Worse still when he does not realise what he knows is wrong or inappropriate.
Silly example: my partner and I were having dinner with my friend and his wife recently.
My partner (Lord knows why) enquired why ladies were required to remove nail polish or nail gel if they were having a surgical episode?
In her opinion it was unnecessary.
Because, according to my friend, the theatre staff attach monitors to the patient’s fingers to monitor her and nail gel causes problems with the connection.
He knew what he knew but my partner didn’t know what she didn’t know.
So she asked.
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you will struggle to make any money.
Private medical practice is a business must be run as a business.
A surprisingly large number are NOT run as a business which is fine provided you don’t expect to make any money or making money is not the aim of the practice.
If the aim, however, IS to make money, then put in very simple terms:
That means, making sure all the administrative functions that are mandatory to running a successful business are in place, working AND regularly monitored.
All too often when I meet potential new clients there are signs that none of the above are considered when starting.
Indeed there are some clients who have never considered the above to be part of the equation.
Take the marketing of the practice as an example: where are the patients going to come from? How will they find the consultant? What will attract the patient to that particular practice?
On many, many occasions this has not been thought through.
Instead sometimes – not always but sometimes – there is an expectation that patients will just “find” the practice.
In reality, seldom will a patient do so.
Instead, the practice must market itself.
The basis of such a glaring omission is most likely rooted in the career of the consultant prior to setting up his or her private practice.
All MHM clients have established themselves very securely in the NHS and obviously in the NHS, the patients are – sometimes literally – delivered to the consultant.
This most definitely is NOT the same in the private sector when the patients must be attracted.
The other common and glaring omission is a consideration as to actually charging the patient or their insurance company for a consultant’s work.
If you are going to build a successful private medical practice you must run it as a business.
Doesn’t mean at the expense of the patients. Far from it in fact.
But you must remember your practice is first and foremost a business.
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Reading Matthew Syed’s latest work reminded me of something I’m conscious of when I look at the business performance of a private medical practice.
One definition [mine at least] could be the ability to look at a situation and by training/experience almost have a sixth sense of the cause of the problem. For example: just this week I looked at a pile of rejected medical invoices and knew immediately why they had been rejected. I didn’t have to ask why.
The specific insurance company they were destined for always uses numeric reference numbers ONLY. Those rejected had letters [alpha] in them. But the international division of that specific insurance company always proceeded their reference numbers with TWO letters.
Nope. Experience and training had taught me to spot that. Unlike the poor receptionist who didn’t realise the insurance company concerned had a UK division and a completely separate international division.
I’m told by one of my clients the technical expression for having such an almost sixth sense about something is called “expert induced amnesia” because the knowledge over time has moved from the conscious part of my brain, the explicit, to the implicit part of my brain.
And that got me thinking about how and what I look for when I start considering if and how a practice can improve. Curiously and I hadn’t realised this before, the what is always the same. For example:
Do you know what or how much is owed to you?
Note that is not the same as asking specifically what the number is. It is “do you know how much?”
At the point I’m asking the question, I’m not really interested in what the actually number is. I’m interested in knowing if the business KNOWS! If the answer is “don’t know” that tells me there is a lack of management controls which sets the direction and scope of the assignment. If the answer is yes and, for example, the number is at the end of the last financial year (might be several months ago) that tells me something else. Very occasionally I hear “yes; its £x,000 as at the ned of last month or week”
But if there is no regular and timely basic management information being produced, the likelihood of there also being significant process errors being made increases too.
In other words, it is an analysis designed to establish if there is a meaningful pattern to the performance of the practice.
And that is precisely what I found when I took on my most recent client.
No timely, accurate management information because the process of invoice generation and cash receipt allocation was not being completed. That immediately led to another question: why not?
Yet paradoxically, the concept of “meaningful patterns” can be said to fly in the very face of my training and subsequent application of scientific management. I’m looking for patterns which will point me in the areas where improvements (however slight) can be found. Actually I don’t think it flies in the face of my training and application of scientific management at all. And it doesn’t really matter if it does.
What does matter is that areas for improvement are discovered and then acted upon.
It is the ACTED UPON element that really produces improvements.
What is really interesting though is the reaction from a practice principal or a private practice manager when an error is found. To me its an opportunity to put it right and ensure the error is prevented from happening again.
Sadly however, some reactions don’t exactly proceed down that avenue.
Significantly though, those that follow the path of “opportunity to improve” do see an increase in their cash flow.
It never ceases to amaze me how many private practices are following a pattern that does NOT result in another patient coming to see them or another invoice being processed and therefore more money being paid to them.
Why look for a “meaningful pattern” then not try to improve if the aim is to generate more cash and more profit in the first place?
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Recently I was reading an article in a business management magazine. The article highlighted some of the challenges faced by small business owners when they start their business. But it could just have easily been written about a consultant surgeon starting a private medical practice.
The article illustrated how many, many small business owners attempted to start their business on their own and without assistance from outside sources. It was therefore common subsequently for the business to struggle with, for example, a lack of customers, a lack of cash and a subsequent disillusionment with the very idea of running a business. This is very normal for a consultant surgeon starting a private practice too. It is by any means an easy to do so. There is a huge amount to be considered. The basic rule is that if it can go wrong it will go wrong.
It actually happened to me too when I formed MHM. Despite the odd 35 years worth of managerial experience in running a business for various employers, I was used to, for example, ringing IT and having them install a new computer or re-sync mobile phone settings. As a small business ALL of that had to be done by myself. I soon realised that , even though it cost money, it was much better to go out and find someone who DID know how to install an IT system.
The first item in the article stated the number one challenge facing a new small business is a lack of clients. Precisely the same situation that a newly established private medical practice faces too. The second item was a lack of cash. Certainly, when I go meet a prospective client both are mentioned. More specifically as regards the second point, the amount of cash actually generated by the small number of patients is not anywhere near what was expected.
Yet I re-collect when speaking to a colleague who specialised in marketing for consultant surgeons, most practices do not have a process in place to utilise the positive experience enjoyed by existing patients to encourage new patient referrals. Their lack of new patients could be helped by using testimonials from current patients in other words. The new practice does not have the right marketing strategies (both online and offline) to attract patients consistently.
Instead, marketing is left to drift unattended. My colleague is a real superstar at medical practice marketing yet she suffers from consultants believing she is far too expensive to engage.
Alternatively, the new private consultant surgeon has a conversation with a colleague who does has an established practise. Hopefully, this pays dividends but it does suppose the established surgeon is maximising his marketing efforts in the first place.
Precisely the same happens when the subject turns to medical invoicing and payment of outstanding accounts. Many newly established private medical practices assume the invoicing – the “accounts bit” – is just as easy as marketing. It will sort itself out in the end. If it doesn’t they ask a colleague how they do it. Once again it assumes the colleague is managing his billing correctly.
Sadly he may not be..
The paradox is that many consultant surgeons when they first start a private practice make the same mistake as I did with my IT requirements when I started – a vain attempt to sort it out myself followed by frantic phone calls to experts. After two weeks and a few hundred YouTube videos later, I bit the bullet and called someone who DID know. It cost me £150 but within ONE day I had all the systems up, running and working very, very efficiently.
The old adage of “if you think hiring a professional is expensive, try hiring an amateur” springs to mind.
Yet many private surgeons, by attempting to manage their own medical invoicing or asking their medical secretary to do the billing and collections to an expert standard, make precisely the same mistake.
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This specific issue comes up frequently when MHM is asked to review the outstanding accounts of a private consultant surgeon.
There are two reasons normally why the patient believes they have already paid and more specifically the hospital has already taken payment. The first is
When the patient is registering at the hospital, he/she is frequently unaware or never even told the card details are for hospital fees only.
The patient is unaware the hospital is not responsible for collecting the consultant’s fee.
To overcome this, MHM recommends the client’s invoice bears the message “payment of this invoice is not covered by any debit / credit card details taken by the hospital” To further help prevent the issue arising, MHM recommends that when the patient makes the booking for the initial consultation, he/she is told an invoice will be sent to them after the consultation.
Over the last year, twice MHM has amended the surgeon’s invoice to include the above sentence. In both cases, the number of outstanding self-funder invoices reduced.
The second reason is that the patient had a “package” with the hospital. Obviously the package covered the patient’s stay, surgery, anaesthetist and, most likely, follow up consultations.
But the package would probably NOT have covered the initial consultation.
This happens more often than is thought!
To resolve this issue MHM contacts the patient and request they check what was and what was not covered in the package. Payment of the surgeon’s initial consultation fee soon follows as the patient agrees the initial consultation fee is not covered. BUT again when the consultant’s secretary confirms all items with the patient, the patient should have been advised the initial consultation was not covered.
Whilst there are in the real world some patients who do not pay upon receipt of an invoice, the vast majority do not pay or react to the invoice because they genuinely do not believe they owe the medical professional any money.
Because they have already paid in their view!
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All MHM clients are very dedicated individuals.
Having spent approximately 15 years of training and finally becoming medical professionals, they go on to work incredibly long hours.
They do so because they actually love what they do.
All at some point all have taken the decision to start a private practice.
It’s unlikely they would be my clients otherwise if you think about it.
They start a private practice because they wish to make more money doing what they love anyway.
To have any other objective is either (a) silly or (b) engaging in self-delusion.
There is no shame in admitting you start a private practice to make money.
As I’ve blogged many times previously a private practice must be run as a business – a business with more than a social conscience but nonetheless still a business.
Yet, sadly, many consultant surgeons make the mistake of believing their practice will grow and make them rich if they continue doing what they love to do.
Sadly that is not true for doing what you love seldom leads to long-term financial success.
And that means you must measure the performance of your practice.
This is the point at which the private consultant surgeon realises he/she must understand financial analysis i.e. the numbers.
It’s not all that complicated. Supplying data to your accountant every year isn’t the same as understanding the numbers behind your practice though.
Let me give you a real example.
I was contacted recently by an established medical professional. He claimed to be working all the hours God sends but said he was always broke.
It didn’t take long to work out why.
The first good indicator was a complete lack of financial analysis other than a tax report a little over one-year-old. No debtors ledger was available.
He didn’t have any real idea how much he was owed.
Indeed it transpired both patients and insurance companies were only invoiced monthly.
So I took the last six months worth of clinic lists and checked how many had or had not been invoiced.
Quite a lot had not.
I did the same with surgical episodes with the same result. This was followed by an investigation into how much had not been paid even if invoiced.
But it was also a case of adding up the total revenue generated for each month, calculating the total costs (room rental, monthly indemnity insurance premiums, secretarial costs, etc). Then one was subtracted from the other.
Even if any type of provision was made for tax liability was ignored the results were not encouraging.
The really bad news is that the consultant looked very blank when I asked which percentage of patients were referred to him from which source.
It was clear this particular consultant had no real idea of how his practice or business was performing.
And that was and still is a very dangerous place for any business to be.
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He wrote the 9th Symphony.
One of the most acclaimed pieces of music in the world was written by a deaf man! How?
Actually, Beethoven wasn’t deaf when he wrote the 9th but he was profoundly hard of hearing.
Nonetheless, how on earth did he manage to write such a wonderful piece of music with such a condition?
Well, a popular myth is that he knew the sounds each instrument made in his head and could feel how they all sounded when put together.
He also had somebody to write down the musical score for him.
It is well to remember by the time he wrote the 9th Beethoven had been playing and writing music for over 40 years so his experience alone (with more than a little talent thrown in) equipped him well.
But he was smart enough to realise his limitations and have someone help him.
Yet many times when starting and running a business, it is assumed that talent, determination, and knowledge alone are enough.
Take running a medical practice for example. All consultant surgeons are, without a doubt, talented, determined enough to go through 20 odd years of training and extremely knowledgeable.
However, just as it would be fairly dangerous to ask Beethoven to remove your appendix, it would be equally unwise to ask a surgeon to write a symphony.
You need the right kind of training, experience, and knowledge to be a consultant surgeon. You need the right kind of training, determination, and experience to run a business too.
The training may not be as highly skilled and crucial as a surgeon but you still need it. If you haven’t got it, you go out and get someone with the right skill set.
Nonetheless, there are many people who think running a business or a medical practice is simple.
They think they don’t need to understand some things and, crucially, are not prepared to find someone with the right skills who do understand.
Sometimes a consultant surgeon thinks because of their talent, determination, and knowledge, they too know how to run a private practice. Some do; some don’t.
Please do not misunderstand me some clients in addition to being very successful surgeons are seriously switched on business people.
Consequently, many times I’ve been asked what makes an obviously highly skilled consultant surgeon so successful in their business endeavors.
Others aren’t quite so successful.
The really successful business ones are those smart enough to realise they don’t have the talent and knowledge to run their practice as a business.
Some of them are, however, more than capable of running a business.
Both however realise, and perhaps more importantly, that their knowledge, experience, and skills are best employed when seeing a patient. So they outsource the issue to someone who has the specific skill set to achieve high-level results.
Just the same as Ludwig Van did when he wrote the 9th Symphony.
Beethoven may have been able to overcome his hearing problem but he was also smart enough to get other people to write the numerous scripts out for the 100+ musicians needed to perform the 9th Symphony.
Very successful consultant surgeons go out and get help too!
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We all hear that many times during the day.
It’s a pain but sometimes it literally is a case of not being able to provide an answer there and then. In itself that is not a problem.
Where it IS a problem is when you don’t get the return phone call.
Personally never mind it being unprofessional to not return a call, I think it is simply rude. Often it can result in a loss of business too. For example:
Recently I was approached by a potential MHM supplier.
We’d done business before. The supplier was keen to provide his services again so we agreed on a meeting. I have an existing supplier but I have to look at all avenues.
Sadly, and these things happen, the potential supplier had to cancel and said he’d get back to me with an alternative date the following day.
But the next day came and went without a call.
So did the day after.
Therefore I called his mobile and left a message for him to call me back. He didn’t. The following day I called again. Whilst he answered he wasn’t at that precise point able to offer an alternative date. But he would call me back “this afternoon” You guessed it, he didn’t. The next day I left another message to call me. He didn’t.
Skip forward to the next week. He finally called me to re-arrange the meeting.
It did occur to me whilst all this was going on that I might not be a significant account to him. I only paid him £200 a month previously. But that is £2,400 a year.
It’s also £2,400 worth of business he won’t be getting off me. I declined the meeting.
As I pointed out to him this was not because I was being difficult or vengeful or even showing my irritation.
It was solely because, to me, his lack of manners and his haphazard approach had not inspired any confidence on the future delivery of his service.
A service incidentally that not only I use but all of my clients could potentially use in the future.
All because, and to quote him directly, “I haven’t had the time all week to stop and return your call”
I resisted the temptation to point out that was his problem and not mine.
I also resisted the temptation to point out his comment made me feel my £2,400 a year wasn’t worth it to him.
I’d have actually preferred a call saying a £2,400 per annum contract wasn’t big enough for him. I would have respected that even.
I mentioned this tale to a family member last evening who happens to be a Regional Sales Manager for a large local company.
He was horrified. Indeed he advised if one of his sales team had done something like that, they would have been invited to consider their future elsewhere (Ok – he put it somewhat stronger really!) I have to agree.
Not returning a phone call is very unprofessional and can very easily lead to a loss of business.
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If you get the basics right many problems with getting paid aren’t allowed to happen. The basics mean the absolute minimum and mandatory requirements in order to present an account for your services. The basics are as follows:
Patient’s full name
Patient’s full address
Patient’s post code
Patient’s date of birth
Policy number of the insurance company concerned
Pre-authorisation number issued by the insurance company
Correct CCSD code
But it doesn’t stop there.
Your invoice should always have on it:
Your name and address
Your provider number
A unique invoice number
The date of the invoice
The date of the treatment / consultation
The right CCSD code
14 points. But if you don’t get all 14 on your invoices you make it harder for the insurance company to pay you!
If anybody wants a blank invoice that does satisfy ALL the above, go to the freebies tab on this website! If you are billing electronically – and you should be – you’ll still need the vast majority of the 14 points.
But the proof of the pudding is very much in the eating. Have a guess at what are the TWO major reasons an insurnace company does NOT pay your invoice?
1. you haven’t sent one (crazy but true)
2. you haven’t included the right information.
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Reality is, the question itself is incorrectly asked! A consultant surgeon or other medical professional doesn’t set his/her own fees. Instead the fees payable are designated by the private medical insurance company with whom the patient is insured.
Take ANY surgical episode (or consultation for that matter) and you’ll discover the fee payable by one insurance company will differ between that set by a second insurance company even though the same episode takes place. So it’s the insurance company that sets the fee and the fee can differ between them.
Taking the above example further using a fictitious CCSD code of XX4321, insurance company A may set the fee at £100, insurance company B set the fee at £125 and insurance company C at £150. Across them there is a difference of £50.
The problem arises when the consultant makes a mistake and bills insurance company C with the £100 set by insurance company A, and immediately looses £50.
That said, if insurance company A is billed insurance Company C’s £150, immediately the consultant is shortfalled. The suggested (and WRONG) solution is to pass the shortfall to the patient. By all means do so up to the point, insurance company A realise what is being done. Keep doing it and your recognition will be at serious risk!
Yet consistently many consultants complain that the fee is too low (which it probably is) but don’t realise it is because they are charging £100 when the insurance company concerned will happily pay £150.
How do you manage such a situation and set your fees?
You don’t. You employ an outsource company to make sure you are invoicing the right fee in the first place!
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Most consultants, and certainly when they first start a private practice consider how best they can set their fees.
In reality, however, it is not the consultant who sets his or her own fees.
It is the patient’s insurance company.
Fee setting should be viewed from two areas:
Insurance Company Fees
Self Funding Patients
Consultation fees, for example, will be agreed at the point of recognition by the medical insurance company.
Clearly, if you have 20 years post qualification experience and are one of the few consultants within your geographic area in a particular specialism, then you can command a higher fee.
In reality, most likely you not be in such a position. You will be offered consultation fees at a level set by the insurance company you are dealing with. In return, the insurance company will refer patients to you.
Surgical fees, if anything, are the easier one to deal with.
The insurance company with whom your patient is insured will always set surgical fees.
You may feel the fee is too low and therefore charge more.
Almost certainly your invoice WILL be rejected or at the very least shortfalled to the patient.
Keep sending invoices in for fees greater than that allowed by a particular insurance company and you run the risk of being de-recognized.
In the case of self-funders, however, there is nothing to stop you charging any fee you like.
Save of course if there are other consultants in your area then the fee levels they charge will influence that which you yourself charge.
Whether it is right or wrong for insurance companies to hold such power over the setting of surgical fees is for another article.
I have very firm views on it but at this point, the stark reality is that the insurance companies do hold such power.
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