Yes, you will! I am resolutely confident in saying this because while health care is not recession proof, it is a resilient industry that weathers well during economic fluctuations. The closures and financial stress caused by the COVID-19 pandemic are certainly unprecedented. However, you can expect to recover if you spend your time wisely and choose to invest in your asset during this extraordinary period. Your valuable time is a scarce resource that you consistently crave. Make it count.
Owners have the opportunity to focus on 3 key areas. Once the doors re-open, there will be a backlog of work. After all, without exception, every office is closed. This is not a situation where a natural disaster such as a flood or fire has impaired only one clinic. This situation has befallen us all, service is postponed, and patients do not have an alternative option. More importantly, as difficult as it is, patients inherently understand the need for the closure as well. Therefore, take this gift of time and focus your attention on 1) Managing your cash flow, 2) working on your practice rather than in your practice and 3) improving and refining your communication skills—both with staff and patients.
- Managing your cash flow: Despite the media being abuzz with doom and gloom the fact is there are steps an owner can take to navigate through this crisis.
a. First call must be to your bank. Look to see if loan payments can be changed to interest only for 3 months. Ask for a temporary extension on your line of credit.
b. While money is not coming in from patient visits, why not focus on the outstanding collections. Take a measured approach here and try and understand each account on a case by case basis. Often when things are busy, people do not always have the time to diligently collect outstanding fees.
c. See what can be done to reduce inventory costs without sacrificing the quality of goods or inconveniencing patients. Are you ordering too many of some items? Can an item be sourced somewhere else at a better price? Just because you’ve always ordered something from a particular supplier or done things in a particular way doesn’t mean you have to keep doing them that way—especially when those other ways may save you money. We all know savvy shoppers
that thrive on getting great deals. You may have a staff member that could tackle this role and tighten those expenses.
d. Don’t necessarily cut back on marketing. Consider effective marketing initiatives you can do once the doors re-open. For example, budgeting for a patient appreciation event would be well received.
- Working on your practice rather than in your practice: Take this opportunity to do the things in your office that you have been putting off.
a. Now is a good time to do minor renovations, refresh and de-clutter.
b. Do a deep dive into patient charts. Every office has files that have unplanned treatments or require follow up.
c. You have exceptional practice management software that has significant analytical reporting at your fingertips, review your practice data. Do you really know who all your patients are? This will be particularly valuable when you are considering your marketing initiatives once things return to normal.
- Improving and refining your communication skills—both with staff and patients. Practice owners often get mired down in the details of treating patients and running the office.
a. When you look at the demographics of your patients, you need to consider how they communicate. A group of Millennials will use different language and phrasing, mixing in a lot of slang that the Baby Boomer demographic would never use. Now is your opportunity to really look at how you deliver your message and on what medium.
b. Think about how your staff communicate. Helping team members learn to communicate in professional and respectful ways helps build a positive atmosphere. Empower them to champion your new approach.
c. Encouraging a positive, open environment provides security for people to share ideas, without being judged. Give your staff a platform in which they can share ideas with one another. Creativity and innovation will follow.
Once we get through this crisis, (AND WE WILL GET THROUGH IT) history is a great indicator of the future. After every serious recession or crisis like 9-11, SARS or the market crash of 2008, practice values went up. The economic principles of supply and demand dictate, that buyers who are reluctant and not buying now combined with the owners who have lost significantly in their stock portfolios and cannot sell, will result in too many buyers and not enough good practices. From
a practice value standpoint, the current value of a practice should not be affected. Due to these closures we anticipate a deferred income from the backlog of work resulting from the backlog of patient visits that need to be booked once we emerge from the crisis.
As awful as the closures are, I cannot help but emphasize that we are looking at deferred income vs. lost income. Even if this closure lasts 4 months, as economically difficult as it will be for the owner, as long as owners were not over-leveraged before, the practice should weather this crisis as well. Banks are stepping up with increases on lines of credit and converting payments to interest only in conjunction with Ottawa creating a stimulus package, the like of which the country previously couldn’t fathom. The economic incentives that will flow from this situation are ones that we should all pay attention to. The reality is that patients trust you and this is not something that could undermine that trust. Every office is closed. When this finally corrects, the back log of work will keep you busy for a significant period.
The key to successfully coming through this is to stay positive and focus on the opportunity that forced time has given you. Don’t think about “When is this going to end?” think “What can I do during this period to energize my business to make to most of the situation when the doors reopen.” There is absolutely nothing that will make your practice one hundred per cent recession-proof. But implementing some of the suggestions above will help to ensure you get through these tough times and perhaps even be able to profit from them.
is Chief Operating Office of ROI Corporation, Canada’s national professional practice and brokerage firm. Please contact her at Jackie.firstname.lastname@example.org or 1-888-764-4145.