Best Way to Grow Bottom Line? Grow Top Line!

If your team is working effectively to keep more of what your organization brings in, it's time to get more "big picture" by applying strategies to grow the amount that comes in.

Hospitals and physician practices alike are seeking ways to grow total healthcare revenue, and are finding that squeezing incremental gains out of what they currently earn has limits. Beyond that which they are already doing, they are also discovering that increasing collections on revenues billed requires more effort that ever to inch any higher. They have come to recognize that this kind of practice management is one of diminishing returns.

How then, they ask, can they increase earnings and collections?

The solution is simple: Find new ways to serve, and grow new revenue streams that have higher collectability and stronger margins.

Physicians who entered the cosmetic industry know this all too well. They moved their core practice into the sphere of vanity, and took advantage of Americans' constant need to improve their images. The prices are high, the margins are stratospheric, and there seems to be a never ending flow of patients who will gladly out-of-pocket to get that better nose, those higher cheekbones, and those growths removed. Except that now, so many physicians have entered this market that opportunities seem to be drying up. Many of the physicians we know in the Southwest are experiencing slowing demand for services in light of a huge influx of physician supply.

So the question remains, What additional revenue streams can be substantiated by out-of-pocket paying consumers who seek more from their healthcare institutions? We've discovered that some systems are building much better mousetraps, by examining the continuum of care that loyal patients expect from where they get care. In an urban setting, we've helped a hospital chain bundle a variety of services that can be accessed at each of the care delivery settings, allowing customers (patients and their physicians) to be cross-sold on multiple services. Simply opening up a dialogue with patients gives you access to new kinds of intelligence, the kinds that can showcase new opportunities to serve and make people happy with their experiences.

We've also found hospitals who are proactive about competitive offerings, bringing new service lines together with lifestyle choices to bridge the outreach gap most hospitals and physician practices seem to encumber. A great example is where a hospital created a weight-loss center for people needing to lose weight, and includes nutritional counseling, personal trainers on-site at the hospital's gym, and even supplemental meal packaging offered by the hospital's kitchen. Physicians champion the approach, and patients go to free seminars teaching how symptoms illustrate the effects of extra weight on the body's ability to perform. Experimenting with this approach, the health leaders here brought on a substantial bariatric center, offering varying degrees of weight loss to their constituent patients, and the entire service line bundle now grosses more than $25 million dollars. Not bad for an experiment.

Our Five Stage Process for Service Line Development can be levered universally for all health providers:

1. Set the Strategic Vision for what the health provider can become.
2. Perform a Candid Assessment, to test the readiness of the organization to grow its capacity to serve.
3. Enter a process of Discovery, learning about new service line opportunities, preselecting physician champions who'd like to make a difference, and most importantly, opening ongoing conversations with each of your constituents: patients, families, the community at-large, physicians, payers, hospital decision-makers, and hospital front-end folks, those who interface with patients on a daily basis.
4. After discovering several opportunities, conduct Pilot Experiments that test the revenue-producing power and market acceptance of a potential service line.
5. Finally, provide seamless integration of the new offering, ensuring that lines of communication are open and precise messages are delivered consistently to all customer types.

In these days where the bottom line is so heavily conditioned by the process of collections, it makes sense to begin exploring the business development side of healthcare, finding, testing and implementing the best new ways to serve people. Not experimenting with how you deliver value by growing your top line, will probably lead to failure.

-----Michael