3 of 3 – Not Every Patient Is Equal When It Comes To Payer Mix
We know. That title sounds a little harsh on payer mix, but we don’t mean it the way you might perceive it.
Let us be clear: Every single patient deserves to be treated with respect and to receive the outstanding healthcare services you provide. But when it comes to patient mix, not every patient represents the same amount of revenue for the same treatment or procedures.
This is because their insurance plans may not pay equally for your specialty and expertise. And that could become a big problem for the financial well-being of your practice.
Let’s see if the following situation sounds familiar:
Day in and day out, your team works hard to ensure that the schedules of each of your providers are as full as possible. And they are! From the beginning of the day to the end of it, each provider’s schedule is packed with patients.
At the end of the day, however, your managers tell you that you need to find a way to squeeze even more patients into the schedule. It seems that the daily revenue totals don’t quite match up with where they need to be to stay on track with weekly, monthly, or quarterly goals.
How can this be? You’ve been slammed with patients, and yet the revenue generated makes it seem like you weren’t really that busy. The likely culprit is that while your schedules are full, they aren’t full of the right patients.
If you’ve been following along with our blog series about patient mix/payer mix, then you already know that attracting more of your ideal, high-value patients to your practice means that most of your patients come with insurance plans that quickly and completely pay for treatment. So, if you charge $150 for an office visit, the majority of your patients have an insurance plan that pays as close to 100% of that fee as possible (and hopefully, their copay covers the rest).
Essentially, having a well-balanced patient mix means:
- Your providers offer excellent services.
- Ideal patients’ insurance plans pay for these services.
- Your bottom line improves so your office budget isn’t so tight.
- Your revenue matches the level of care that all patients receive at your practice.
While you want to continue offering exceptional care and patient experiences at your clinic, FQHC, hospital, or individual practice, you also want to receive the money you deserve for providing that care.
If too many of your patients have low-paying insurance or government insurance plans, like Medicare and Medicaid, then you’re likely not receiving the level of payment that corresponds to the level of time and effort you’re investing in your healthcare business. As we mentioned in the previous part of this series, the problem occurs because you don’t get paid the same amount from every insurance plan, even though you’re spending the same amount of time and effort with every patient.
Don’t get caught in the financially limiting mindset of, “We view ALL our patients as high-value patients,” or, “We treat all our patients equally and don’t turn anyone away.”
Of course you don’t turn anyone away. We’re not even remotely suggesting that you should.
It’s likely that one of the biggest reasons you’re in the healthcare profession is so you can help people — lots of people — live healthier lives. However, at the end of the day, your practice, hospital, or clinic is a business. You have to make money not only for yourself, but also to pay your staff.
If your payer mix is bogged down with too many patients whose insurance plans pay only a fraction of the cost of healthcare, your bottom line suffers. On the other hand, when your patient mix is balanced with more ideal patients whose private insurance plans cover the cost of your healthcare specialty, your bottom line reflects that in a way that helps you continue to grow.
Simply put, once your bottom line is in better condition, you’ll focus less on the financial health of your practice and find more ways to offer the best healthcare for your patients.
A balanced patient mix = more revenue, which creates a ripple effect of positivity.
With more revenue, you can afford to pay your team decent salaries, so you can attract the best professionals to join your organization. Then, your enthusiastic, highly qualified providers love to come to work to serve patients, so they consistently deliver a great experience. So many wonderful experiences at your practice can boost your online reputation because your happy patients are excited to leave 4- and 5-star reviews for your providers and let everyone know about the great care they received!
As you can see, the positive effects of balancing your payer mix are exponential. So, it’s OK to let go of the limiting mindset of trying to help every single patient, regardless of their healthcare plans.
Instead, shift your focus to bringing in a higher volume of patients with the right insurance plans. With a solid bottom line, you’ll spend less time worrying about where you’ll find the budget to purchase state-of-the-art equipment, which empowers you to provide even better care for your patients, give your employees raises, and continue to grow your practice.
Growing your practice means you may even be able to open additional locations where you focus on serving those patients with less-than-ideal insurance plans. You’ll also be able to allocate funds for a robust marketing strategy to help attract even more patients to every location. And the cycle of positivity and getting paid what you’re worth continues long term.
When it comes to finding the best patient mix for the lifelong success of your healthcare organization, we challenge you to change your mindset. As behavioral science and business methodology expert, Dr. Steve Maraboli said, “Once your mindset changes, everything on the outside will change along with it.”
Here at SocialClimb, we see patient mix — and many other aspects of running a successful healthcare organization — in a different light. Give us a call to learn more about how our comprehensive marketing platform can help your practice flourish.