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Yuval Lirov

How to Select Physical Therapy Practice Management Software | WRAP | Part 5

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physical therapy software selection part 5By Yuval Lirov, PhD and Shecanna Seeley, PT

Prepare to Be Wrong

Bookend the Future

To stack the deck in favor of her decisions, Shannon should prepare for both failure and success. Thinking about the future as a set of one or two scenarios limits our ability to prepare for for the unknown. Instead, Shannon should

  1. define her key performance indices (KPI)
  2. define a range for each one of them
  3. prepare a premortem (as opposed to postmortem) and preparade (as opposed to parade) for each of the two limits of the range she defined for each of her KPIs

For instance, the percent of the AR beyond 120 is one of the most useful KPI of her practice billing performance. It gives Shannon a sense of the speed of her cash flow as well as the amount of money she is leaving on the table for the payers. Her current %AR>120 is at 21%, which happens to be an average physical therapy value for this KPI.  The reduction of this value down to 10% would be a clear success as it would double Shannon’s practice profitability.

What if the %AR>120 doubles and grows to 40%?  That would be a real problem as it would slow down her cash flow and make her unable to pay her bills. If this problem persists, she could be out of business within 6 months.

Measuring patient flow growth is equally important. Patient growth is the result of subtracting patient attrition from new patient arrival.  If your objective is to grow your practice to the point you can sell it, Patient Growth must remain positive. Shannon’s practice at this point shows PG = 1%. Is she staffed adequately, if installing the new system will double her PG to 2%, to 10%?   Conversely, what would she do if her PG dropped down to negative 2%?

By asking this kind of questions, Shannon sharpens her focus on relevant decision-making criteria. She can also use this experience as a learning tool to review her progress down the road.

Set a Tripwire

We develop routines to be able to go on auto-pilot so we can focus on exceptions. But slipping into auto-pilot has a shortcoming, especially in the presence of slow, gradual changes that have cumulative effect:  we leave past decisions unquestioned. Slowly, we develop bad habits, we gain weight, we miss quality of life, we keep sub-performing staff, and eventually we miss our goals, often surprised by our inevitable failure – when did we give up?

The main problem with the routine is that it often continues unchecked.

So, if Shannon is unable to make a decision at this point, it means that she is making a decision to wait and see. The only important change she must make is to set up a tripwire – a mechanism to snap her  awake and make her realize she always has a choice.  Tripwires also provide a safe time limit for experimentation, giving Shannon peace of mind until one of the tripwires is triggered.

The most obvious tripwires are the 10% changes in KPIs:

  1. payments dropping by 10%
  2. patient visits dropping by 10%
  3. no-show rate growing at 10%
  4. no-future appointments growing at 10%
  5. unsigned notes growing at 10%
  6. percent of Accounts Receivable beyond 120 days adding 10%
  7. neglect claim backlog growing at 10%
  8. neglected workflow ticket backlog growing at 10%

The second kind of tripwires have to do with time limits for your staff:

  1. on a monthly basis review the monthly goals and previous month accomplishments
  2. set up clear deadlines, spelling out what happens in terms of compensation and responsibilities if the monthly accomplishments do not cover 80% of the goals

The third kind of tripwires have to do with patterns rather than dates or metrics:

  1. escalate when something feels wrong
  2. make an independent decision according to your core values

Your practice will grow faster, your staff will become more productive, and you will gain your peace of mind by establishing and clearly articulating the tripwires across your entire practice.

Trusting the Process

Shannon made a good choice.

She avoided framing her dilemma too narrowly. Instead of thinking “Should I replace my billing system or keep it as is?” she thought broader about the goals of her business and found a way to improve her patient’s experience and practice workflow, achieving faster growth and better profitability at the same time.  She embraced “AND not OR.”

Shannon reality tested her assumptions, talking with colleagues who have replaced their office systems and implemented workflow management processes in their clinics.

She ooched into her ideas, rather than diving in headfirst. She tested the new software and the processes in one of the locations and carefully measured and compared patient growth, cashflow metrics, and compliance, before making a decision to implement them in the other two locations.

Struggling with the tough choice, she attained distance on the decision. She imagined how would she feel in 10 years about replacing the software she has today, and that thought alone relieved some of her anxiety.  Her personal priorities demanded that she expanded her practice, and that realization drove her decision to modernize her workflow processes and her enterprise management software.

Together with her husband, she tried to bookend the future, brainstorming the reasons why the new workflow and software implementation might fail and what would the consequences of such a failure. Most importantly they set tripwires to alert her about either success or failure of her new direction.

Shannon followed a good decision process, while avoiding a list of pros and cons and taking into account her personal priorities and ambitions. The process she followed gave her confidence to take risks and make bold choices. Shannon knows that in 10 years, she will not regret that she missed an opportunity to grow.

References:

1. Chip Heath  and Dan Heath,   Decisive: How to Make Better Choices in Life and Work, Crown Business; 2013
2. Yuval Lirov and Shecanna Seely, “How to Select the Best Physical Therapy Software for Your Office,” Impact APTA PPS, August 2013, pp. 46-50.

 

Yuval Lirov

How to Select Physical Therapy Practice Management Software | WRAP | Part 4

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Physical therapy billing software selectionBy Yuval Lirov, PhD and Shecanna Seeley, PT

Attain Distance Before Deciding

a) Overcome Short-Term Emotion
As a practice owner, Shannon is emotionally engaged with every little detail and every event that happens in her practice.  We prefer familiarity to convenience, and we prefer convenience to objective benefits. She needs to be aware of three kinds of emotions that bias our decisions:

  • Fleeting emotions
  • Loss aversion
  • Familiarity

Fleeting emotions tempt us make decisions that might not be good in the long term. Shannon should make a disciplined effort to delay making a decision.  “10/10/10” is a good rule of thumb for taking a long-term perspective about your current emotions. Ask yourself: how would you feel about your decision in 10 minutes, in 10 months, and in 10 years?

For some reason, we are wired in a way that losses are more painful than gains are pleasant.  We are also prone to like something more just because we have been repeatedly exposed to it. The combined effect of the two tendencies is that Shannon is biased to maintain status-quo, even if objectively, an option she considers is more beneficial to her practice long-term.

To overcome her emotional bias, Shannon needs to distance herself from her practice. Asking yourself “what would I tell my friend to do in this situation?” might help her take the right distance.

b) Establish Your Core Values and Priorities
Core priorities make resolving complex dilemmas easier. What’s more important:

  • staff teamwork or predictable cash flow?
  • patient perception or practice growth?
  • compliance or patient flow?
  • peace of mind or new opportunities?

By making a list of her own core values, Shannon can compare her core values with those of the vendors she is considering and quickly rule out the vendors with mismatching priorities. For instance, if Shannon’s top priority is patient’s satisfaction, then she should rule out any vendor who only focuses on the practice owner and does not show enough interest in the patient.

The core priority list is a powerful communication tool not only with your vendors but also with your patients and with your office staff.  It puts the patient’s mind at ease and it empowers your staff to act more autonomously, responding to patient’s needs faster, without administrative delays.  The more coherent and autonomous your staff is, the more satisfied they are with their jobs, resulting in less staff churn.

Which brings us to the next question:  what’s your overall purpose for your practice?  Do you consider it a success or do you think it should grow bigger and generate better profit margin?  How do you know?  When was the last time you compared your practice to an industry standard?

References:

1. Chip Heath  and Dan Heath,   Decisive: How to Make Better Choices in Life and Work, Crown Business; 2013
2. Yuval Lirov and Shecanna Seely, “How to Select the Best Physical Therapy Software for Your Office,” Impact APTA PPS, August 2013, pp. 46-50.