The clinic is the largest in a network of mental health clinics and is a subsidiary of a diversified health services organization.
Reduce, or eliminate the current annual operating loss of $250,000. The continued operation of the clinic is contingent on achieving this objective.
- Patient no shows were averaging 36% per week.
- Therapy sessions were lasting significantly longer than the 20, 40, or 75 minutes prescribed in the patient’s treatment plan.
- Maryland State funding policy limited reimbursement for therapy sessions to the 20, 40, or 75 minutes prescribed in the treatment plan.
- Billability goals had not been established for the clinician stafAs a result, clinician performance was not being managed to generate revenue and control operating expenses.
- The revenue generated by the clinic as a result of these issues was insufficient to meet the payroll of the resident health care professionals and created an annual short fall of $250,000.
The initial focus was to reduce the number of patient no shows. This was achieved by initiating a program of calling patients thirty six hours in advance of their scheduled appointment. This calling reduced the number of no shows from 36% to 9% weekly. The next step in reducing the impact of the no shows was to overbook patients. This overbooking was done gradually over 4 weeks and reduced the impact of patient no shows to less than 1%. The 4 week period was selected for the implementation of overbooking to insure minimal wait time for patients.
The next step in the improvement process was to establish productivity and billability goals. The first goal was to limit therapy sessions to the specific length of time set forth in the patient’s treatment plan. The second goal was to achieve an 85% billability level of the clinic’s staff. To achieve these goals, bi-weekly staff performance evaluation sessions were established to review the billability of each clinician. These bi-weekly performance evaluations continued every two weeks and were instrumental in increasing billability from 45% to 83% over a period of ninety days.
In less than seven months after the beginning of the consulting engagement, the clinic’s annual profit performance improved from a $250,000. annual loss to a $108,000. annual profit.
An additional and unexpected benefit of the cost reduction effort was an improved level of patient care. This improvement was realized as a result of more focused treatment sessions in accordance with the time limitations prescribed in the patient’s treatment plan.