Growing a Private Dermatology Practice
The ONGOING success story of our first client.
Our work with this practice began in 2011.
They are a single location practice that has enjoyed steady annual growth over the years with us. They approached us after losing money for several years as a result of the 2008 recession, and we helped them get back in the black, grossing an additional $150k to $200k per year.
This client has paid an average of $30k per year.
They have seen a 238% Annual Return-on-Investment since year one.
Growing a Private Dermatology Practice
Part I: Preparing for growth
A dermatology practice in business for over 17 years called upon Frederick Mountain Group to help their business reverse declining revenues after the recession that began in 2008.
The company went from losing money and experiencing high patient dissatisfaction, to adding $100k to $150k in gross revenue annually in the initial three years of the project. This practice is still with FMG 10 years later.
10 Full-Time Employees
1 Managing Physician
1 Part-time Physician
70% Medical Dermatology
30% Cosmetic Dermatology
This physician-managed practice was well-respected in the community. The owner-physician was beloved by patients. The physician wanted to spend more time practicing medicine and less time dealing with staffing issues. They wanted the practice to be profitable, and wanted the practice to be focused on the needs of the patients first and always.
When we were contacted in 2011, the practice had been losing money since late 2008. The owner assumed the issue was marketing, however after our initial interview, we realized there were actually operational issues holding the practice back. The office staff was performing poorly with patient complaints daily, employee morale was low, and there were high turnover rates. They were several months behind on insurance claims, billing, and were rife with errors that cost the practice money. They also had several cosmetic devices and products but the staff were not promoting these revenue opportunities to patients.
We quickly realized that if we started marketing the practice, it would not make any more money.
- Employees didn't have clear goals, roles, and expectations
- Low patient satisfaction
- Inconsistent enforcement of existing company rules
- Lack of teamwork among the employees
- High payroll cost due to unauthorized overtime
- Declining revenue
- Growing accounts receivable from uncollected insurance payments
We had to get a handle on the employee and office manager performance issues first. The reason? Patients number one complaint was the staff. From the first phone call contact, to checkout, to scheduling, to billing, the staff was not invested in creating a positive patient experience.
As is listed in the graphic, the staff was not motivated, and the office manager was not a leader or a role model.
We could not fire everyone and start over. There were some staff members who were trying but a practice requires a united team to be successful.
We decided that we would give everyone a fresh start, a chance to shine with new leadership and new systems and procedures.
We worked with the office manager and the managing physician and created a simple , 7-page employee manual that set forth the expectations and goals of the organization.
We then presented the new employee manual and the goals to the staff alongside the office manager. We wanted the whole team to see this was an opportunity to start over and focus on providing exceptional patient care. We made it clear that no one was "at fault" for the state of the practice, rather, we wanted everyone to work together for the patient.
Everyone had a week to review the document and then sign that they acknowledged the contents.
After establishing the employee manual, FMG worked closely with the physician and the office manager to help uphold and enforce the new policies fairly.
The Early Results
High performing employees embraced the new system. They welcomed the structure and accountability and felt seen for their efforts and hard work. Lower performing employees were put through the coaching process laid out in the employee manual, and if they could not adhere to the standards of the practice they were let go. FMG supported the physician with hiring by using the standards and the culture the physician wanted to share as the focus of the hiring process.
Results in first 6 months
- Overtime expenditures dropped immediately, payroll cost stabilized
- Employee job satisfaction started to increase
- Patient satisfaction started to increase
Results in first YEAR
- A key hire in Billing Department reduced accounts receivable backlog from 6 months to 30 days
- A key hire increased monthly revenue 67% from cosmetic products and procedure sales
- The practice went from a $200,000 annual deficit to a $100,000 surplus
Part Ii: Scaling with Marketing
The practice needed to market itself to continue to grow and effectively compete with the 3 new practices that had entered into the market in recent years.
After 2 years, we had the right team in place to capitalize on the increased demand that would come from a more formal and professional marketing program. FMG uses a process called 360-Degree Marketing with all clients. We know every dollar counts and we have to show value quickly. What makes us unique in the marketing space is that we define success as additional revenue generated through our work.
We worked with the office manager and managing physician to create a monthly focus for the whole year. We picked up to 5 products, devices, and/or procedures each month as the focus. It is a manageable number for the front-line staff which will have to convert leads.
Using the marketing ecosystem, we created features and content to push across marketing platforms.
Social Media Marketing
Website Content Creation - Blogs & Articles
Search Engine Advertising
Social Media Advertising
Results Over A Three Year Period