Tag Archives: capacity

Brutal Economics: A hidden expense.

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You have more expenses than you’ve probably considered.
 
Your biggest expense, like that old poster you have had in your reception room since 2012, has become invisible.
 
What is this big expense?
 
Well, one of the goals we work with in the Goal Driven System is the Full Capacity Goal.
 
This goal can be easily overlooked as we are focused on patient care, reimbursements, staffing schedules, vacations, and a thousand other tasks that require our attention.
 
The reason the use of goals is so effective in practice management is that they help you see the Vital Few from the Useful Many. (These terms are often used in reference to the Pareto Principle of 80/20.) The Vital Few are those factors (20% or less) that produce 80% (or more) of the results.
 
If you are not operating at close to full capacity, you are wasting money.
 
For example, if you could see, 160 patients in a week, given your schedule and good support, at $65 per visit, that would equal $10,400 per week. On a monthly basis, this would work out to be 640 visits and about $41,600 in revenue. This would be 100% Full Capacity.
 
You know from experience that your expenses are a lot higher than most realize. First, there are fixed expenses that you must pay out regardless of the performance of your business. And after everything and everyone is paid, after all accounts are settled, what is left over is yours.
 
At 70% capacity, that is not much. At 50% capacity, that is nothing.
 
Of course, you don’t focus on stats and money when you deal with patients as a doctor and as care givers.
 
But as a business owner, you must.
 
Numbers, analytics, Key Performance Indicators –– these make up your scoreboard and give you the best feedback to help you manage the performance of your business.
 
We carefully analyze our clients’ numbers each month and encourage they do the same. We also plot them on graphs and charts to notice trends. These are our x-rays.
 
Lately, we have realized that there is one number that gets overlooked in the hustle and bustle of business management. That is to what degree the office is operating at its full capacity.
 
In Goal Driven Analytics, we have been testing a “business capacitometer.” It displays, much like a speedometer or tachometer, the percentage of full capacity that the business is operating.
 
But you can easily do the same. Here is how:
 
  1. Weekly Visits. Determine the maximum number of visits you could see comfortably each week if you were reasonably supported with software and staff. ______
  2. Full Capacity Goal. Multiple this by 4 (I know, 4.3 is more exact): ___ This is your Full Capacity Goal.
  3. Percent of Full Capacity. At the end of the month, divide the number of visits you saw by your full Capacity Goal and you will get the percentage that shows you how the efficiency of your practice. E.G. You FCG is 800 and you saw 600 = 600/800 = 75%
Work towards maintaining 90% or above. Find the capacity constraints and remove them.
 
This is also very helpful if you have multiple providers – other associate chiropractors, massage therapists, other services, even your rehab or therapy departments. After agreeing on what volume would be full capacity, each month they can see their level of performance.
 
Last note: It is not about the statistics. While stats are your best indicator, remember … it is not the stat that is important — it is what they represent. A helped person!
 
Seize the Future,
 
Ed

 

Capacity Constraints: Hidden Practice Barriers

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Fixing the weakest links.

Your practice should flow smooth, fast, and uninterrupted, like a clear mountain stream.

Most offices, unfortunately, have hidden dams that slow or even block the flows within their office. This limits growth and increases stress.

For example, I have often seen the front desk so clogged with paperwork that new and active patients were inadvertently discouraged from coming in.

Every department and function of your practice is vulnerable to innocuously seeming events that add friction that choke production. Interruptions in the billing department, poor note-keeping systems for doctors, too many therapies to choose from, insufficient space, staff unclear of their goals, staff driven into apathy by being micromanaged… there are many potential opportunities for roadblocks.

Generating more new patients to increase your patient volume is usually a good idea. But often, the increase in volume is short lived because the office had too many hidden log jams and wasn’t set up for the higher patient volume. Even the doctors, while saying they want more new patients, can become fatigued by the end of the day and privately look forward to lighter days.

There are several remedies for these clogged flows.

First, clear up the goals and outcomes of each department. For example, the goal of the front desk is not “completed paperwork.” (A “Fully Scheduled Day” would be better!)

Second, you can review and refine the flow of patients into, through, and out of your practice. Draw a patient flow chart. Start with your new patients. List the sequence of actions your new patient goes through on their first day at your office. Later, you can do this for their second and third day. You can later work out a flow chart for reactivated patients, re-injured patients, and different types of cases.

Then, you and your team can rehearse the entire sequence to see what is missing or what needs to be eliminated.

I cover this in The Goal Driven Business:

Broken flow patterns that remain invisible “clog up” the system and slow down everyone’s best efforts to produce valuable outcomes and excellent service. These are bottlenecks. Discovering and eradicating them is a significant function of the Goal Achievement Process.

In his 1984 book, The Goal, Eliyahu Goldratt introduced what has come to be known as the “Theory of Constraints.” By making a chart outlining the flow of your customers, for example, you’ll better identify “leaks” or constraints which lessen your ability to achieve high quality and quantity customer outcomes.

As Goldratt states, “Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link.”

Every three months or so, do a “walk-through” with your entire team, where someone takes on the role of customer. This rehearsal will bring to light many duplicated or omitted functions. You’d be surprised to discover that many of the tasks you assume are done for your customer are actually skipped or poorly linked in. Sometimes you find tasks from decades ago, that no longer apply, are still being done.

Be an engineer to your goals and discover the constraints holding your office back, and remove them.

Be…… A Goalineer!

Ed

PS For those of you who have purchased my book, The Goal Driven Business, you are welcome to schedule a no-charge consultation to see how you can remove your bottlenecks and achieve your goals. SCHEDULE NOW

If you haven’t purchased the book yet, please do so here.  BUY THE BOOK

The Theory of Constraints: How Bottlenecks Can Suffocate The Growth Of Your Chiropractic Practice And What To Do About Them

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Do you work hard but you just don’t get as far as you should?  The reason may be that you are running into unseen bottlenecks that are choking off your production and suffocating your growth.

Here is an example: One doctor we worked with a few years back had a small office of about 1000 square feet. He was seeing about 140 visits week but wanted to see more. He felt the problem was not enough promotions generating more new patients.

We visited his office and noticed that he already had a decent amount of marketing underway and he was getting external new patients. While his marketing could have been more effective, it wasn’t that bad.

We noticed that the reception area was tiny and mentioned this to the doctor and suggested he move to a larger office. He had his mind made up.  He did not want to get a larger office because he had heard of doctors seeing 300 O.V.’s per week in 1000 square feet with very low overhead and he wanted to do the same.

So we set up a special focus group and personally interviewed his patients. The primary complaint was that the reception area was too small. The patients interviewed said that during peak hours there was no room for them to sit. They said that they felt that he must be too busy and therefore they would not come in to see him because he was full, and that they referred their friends to other offices.

Well, with this information, the doctor finally decided to move into a new office with a larger reception room.  Shortly thereafter, his office visits shot up to an average of 225 per week.

There are a number of lessons to learn from this story. One being not having a fixed opinion of how things should be based upon hearsay, or what may work for one doctor may not work for you. But the biggest lesson has to do with capacity. And, there are many examples of capacity restraints that we often uncover in our consulting and coaching work over the years.

Bottlenecks can occur at the front desk, in the therapy area, and in the insurance department. They can occur with the patient flow, with paperwork or in doctor time.

The theory of capacity management, as expounded by Eli Goldratt and explained in his books, including the best selling The Goal, discusses the theory of capacity constraints as applied to a manufacturing environment.  The same principle applies to a health care facility.

According to Goldratt:“Capacity is the available time for production.” A bottleneck is:  “what happens if capacity is less than demand placed on resource.”

 

SOME CHIROPRACTIC EXAMPLES:

  • Peak Periods. Between the 4-6 pm slot, where there is extra traffic, additional staff or increased capacity is not always provided. If staff feel that patients are waiting too long, or that they are not able to handle all the traffic, they may unconsciously hope the phone does not ring or another patient walks in. In turn, should someone new call or walk in, the quality of service may be poor.
  • Paperwork.  Older forms may not meet the current needs, be redundant or even hard to read.
  • Poor scheduling of patients: (not cluster booked, not booking for NP or paperwork)
  • Doctors waiting for therapy patients. (No therapy staff or therapy after adjustment)
  • Front Desk doing insurance and scheduling at each visit (no multiple appointment plan or Prepayment plan)
  • Not enough exam rooms
  • Clutter in front desk/insurance area
  • Quitting time. After a long day, all staff and doctors are looking forward to leaving and really don’t want extra patients to call or come in.
  • Backlogs. Undone reports from two summers ago, partially completed projects, cluttered desks or office space, all discourage an increase in production. You only have so much mental capacity, and if it gets frittered away on projects that are not completed, you will have “too many irons in the fire” to add any more
  • Doctor talking too much. “Table talk” should be about chiropractic, the patient’s need for care, their progress, and referrals.  Now and then, a few questions about the patient’s personal life to demonstrate your genuine interest is good. Aside from that, there is no need to justify your services with lots of talking. Keep it moving.
  • “Difficult people”. Some staff, or patients, will seem to drain you of your energy, or consume too much of your time trying to keep them happy. This can “clog” up your day.
  • Doctor too busy doing administrative tasks and micro managing. This distracts him from the work that he needs to do.
  • Doctor’s mind “filled up” with lots of experience and no longer curious or interested in practice.

 

SIX CATEGORIES OF CAPACITY IN A CHIROPRACTIC OFFICE:   We can break practice capacity constraints into 6 categories.

  1. Physical. (For example, not enough rooms, rooms too small, or just too cluttered.)Doctor. (For example, doctor doing billing, answering phones, and micro managing. )
  2. Procedural. (E.G. making 4 copies of each EOB rather than making an electronic back up)
  3. Equipment. (For example, using hand feed copier rather than an automatic feeder.)
  4. Personnel. (Not enough staff, poorly trained staff, barely competent staff preventing you from hiring superior staff, and negative staff, etc.)
  5. Doctor. (For example, doctor doing billing, answering phones,  micro managing, head “filled” with “krap!” )

 

REMOVING PRACTICE CONSTRAINTS

Here are some steps to take to remove bottlenecks.

First, start by determining what is the maximum number of patients that could be seen by the doctor if all he or she did was adjust or treat them.  What is the doctor’s capacity in terms of visits? E.G. 250 visits per week – if all she did was adjust, do SOAPs, exams, and report of findings, with 6 New Patients and 5 returning or re-injured patients.

Then, look at what eats up the doctor’s time.  Then, consider the flow of patients, of paper, and anything that slows it down or gets in its way. Consider patients waiting, paperwork waiting, and any times of the day or days during the week where there is a slowdown or backlog.  Honestly check each category below.

Once you do this, have a staff meeting, explain the concept, and get responses from the staff.

  1. Doctor’s time: What does he do other than adjust patients? Can it be delegated? Can scheduling be improved so that the doctor never waits? Does she have any redundant tasks that can be made into a routine template?
  2. Procedures: Are there redundancies? Is something being done that could be done faster?
  3. Personnel: More training needed, more staff needed, better attitudes needed?
  4. Physical space: Do you need more space? Could things be arranged differently for greater efficiency?
  5. Equipment: Could a new piece of equipment speed things up? Does anything need fixing?

Once you have done this, give yourself 30 days to fix the biggest capacity constraint. Then, reassess. If the constraint is fixed and the flow is improved in that one area, it may have migrated to another area.

For example, a doctor was doing all of the x-rays which took extra time and she was also waiting for patients because they were not “cluster” booked. Solution: staff did all the x-ray work and the doctor just came in, checked, and “pushed the button.” The front desk booked the patients tightly so that the doctor did not have gaps in her schedule. Visits increased by 40 per week, from 160 to 200 for the week because now there was more “room.”

However, now that this was fixed, the bottle neck may “migrated” to another part of the office.  Now, the insurance department can’t keep up with the extra work and a backlog starts to build up in this area.   If this does not get fixed, then the insurance department’s traffic will slow down,  like a traffic jam,  and the office visits will eventually go back down to 160 per week.

 

When your business is not expanding like you feel it should, you may have bottlenecks or hidden logjams choking and stunting your growth. Fixing these and opening up the flow, even at extra cost, will usually greatly increase production and income and be worth it.

If it doesn’t get fixed soon, give us a call.

Sometime

(copyright Petty Michel & Associates 8/27, 2007. Revised 2012. CHMS, Inc.)

The Four-Handed Chiropractic Office

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We once knew of a dentist that was able to see hundreds of patients each week. Just himself.

How?

He had four hands. Actually, he had about 40 hands.

Four-handed dentistry became popular in the 1960’s and is a procedure that utilizes a dental assistant at the chair side of the patient with the dentist.

The two extra hands of the assistant allows the doctor to do the essential work on more patients. It is actually more than just adding two more hands. It includes all aspects of cooperation and coordination, allowing for maximum production through improved efficiency.

But his success was due to not just having extra “chairsides.” He had everything delegated, had separate departments in his office systematized, and had manuals for each department from which he constantly trained his staff. And, he had a fast and efficient management system to keep it all going. This permitted him to work with patients and develop the personal rapport that helped to keep them coming back to complete their treatment programs and refer their family and friends.

All of this leads to a key concept: capacity. Capacity is the ability and “room” to produce. Four-handed dentistry increases the capacity for the dentist to serve more people.

The reason why many offices stop growing is that, simply, they run out of room. It could be that there is not enough physical space or not enough effective staff. It could be poor patient, staff, and paperwork systems that clog up the flow so badly that even a can of Drano or a visit by the Rotor-router man couldn’t fix.

And, sometimes, even our mental capacity can get “filled-up.”

A well-organized office allows you to leverage your abilities and create more production. It also opens up the room to produce.

Imagine trying to play a football game on a 10 yard by 10 yard field. This is what many of us are trying to do, yet we just don’t know it. If you are having a hard time growing your office, you may have unseen capacity constraints holding you back.

A four-handed chiropractic office would be an office where there were many “hands” efficiently doing all the work, allowing the doctor(s) to focus only on those key actions necessary to treat patients and run the office.

Give this some thought and we will SOON show you some specific examples and what to do about capacity restraints in your office. Stay tuned…

P.S. If you know any doctors or marketers who would enjoy this article, just send them an email with this link: http://www.pmaworks.com/main/Four-Handed_Chiropractic_Office.shtml
P.P.S. E-mail addresses are never shared.

You are free to use the material from these articles in whole or in part on your web site or eZine (email newsletter) as long as you include the attribution below and also let me know where the article will appear.

“This article is by Ed Petty of Petty, Michel & Associates. Petty, Michel & Associates web site is a comprehensive resource on practice development for chiropractors. For free marketing resources and valuable development tools visit http://www.pmaworks.com”