Leading in Times of Crisis: COVID-19 and the Health Care Industry

Posted By Mike Meyer, Friday, June 12, 2020


By Candela

In early 2020, it looked like it was going to be a relatively smooth year for health care. Sure, there were the usual rumblings in Washington about drug prices and reimbursement for medical practices, but health care didn't seem like it was going to be at the forefront of the nation's attention, as it often has been in recent years.

Then came the big bump in the road: COVID-19.

One day, there were patients in the waiting room, physicians, nurses and support staff scurrying from one room to the next and phones ringing. The next day, quiet. The next day, quieter. The next day, quietest. Appointments were cancelled, patients stopped coming into the office for anything but absolutely essential visits, and work started trickling away. Many of those with ownership stakes in their practices quickly transitioned into crisis mode.

"What should we do? How does our business survive this? Can our business survive this?" There is no playbook to follow when dealing with the COVID-19 crisis, no magic wand to wave in the air that makes problems go away. Most practice owners and operators are figuring things out as they go, adjusting and pivoting to the realities of every given moment. So then, what exactly can you be doing during this shutdown? How do you use this time to not only survive the present, but also plan to once again thrive in the future? Here are a few suggestions from practice owners and operators that may help you clear your mind, focus back in on what is important in your professional life and position your practice for success when your doors are once again allowed to open.

Review and Reflect

In normal times, so many practice owners and operators spend their days hustling from patient to patient, returning phone calls, overseeing marketing efforts and taking care of the hundreds of other pieces of daily minutiae. "There is no time for any of that other stuff," is a common refrain.

Now, there is lots of time for that "other stuff."

Strip down your practice piece by piece to figure out what is and isn't working. Examine your financials, perhaps even going back five years. What is the return on investment on each core service you provide? Do you need to shift from performing fewer of certain procedures and offering more options that incorporate the new technology you have acquired for your practice? Talk to any staff you have retained during this pandemic to get their input. What marketing channels have been working best for you? Maybe that fancy new device you bought last year isn't bringing in the revenue you expected. What are some possible reasons?

Do some research into your competitors. What do their websites look like? What sort of images are they trying to portray via social media? How can you differentiate yourself from their operations? Just as importantly, examine the practices of other operators you admire from around the country. Maybe you can arrange an exchange of ideas with a group of your peers in non-competing locales. This is a great time to step outside of your own practice and view your operation from the vantage point of the general public. Figure out the image you want to portray to your potential customers. Find your voice. This may also be a good time to reflect on the personal image you portray to your team. How is your employee retention? Does your staff seem happy? How can you keep them busy and productive while being sensitive to their personal situations? Are there small ways you can thank them for their dedication?

Something to think about: Over the years, you have probably ordered subscriptions to several things for your practice that automatically renew every month or year. Cancel all your professional debit and credit cards and ask your bank to distribute new ones with different numbers. Also, tell them that you do not want to roll over any subscriptions to the new cards. This will allow you to monitor every dollar going out the door so that you can evaluate its relevance to your operation.

Protecting Your Image

In the early days of the COVID-19 crisis, there was a rush across many industries to offer deals or special post-pandemic sales to customers in order to maintain some sort of regular cash flow. While understandable, this may not be the best time to aggressively push sales to your customer base. Some of them are likely struggling with their personal finances and might be turned off by aggressive solicitations from your practice. These promotions may also smack of desperation. "Why would I spent $1,000 to apply to a future elective treatment if it looks like this practice may not even be around when this pandemic is over?"

Instead of pushing sales, push education. Find ways to add value for your patients without selling directly to them. As your customers are cooped up at home, they likely are looking for ways to fill their days. This is a great time to offer a webinar on specific topics in which you have expertise that you feel would interest your patient community.

Something to think about: You may have some loyal clients who ask for a refund on that $5,000 gift card they bought just a few weeks ago during one of your specials, since they may now be struggling financially or have seen their stock portfolio tank. This is a tricky situation. There may be no legal obligation to refund the money, but it is an ethical decision. Is the short-term cash flow more important than the long-term customer relationship? Depending on your practice's financial health, it may well be. Either way, it is a decision that can either damage or refresh your reputation with that patient.

Managing Your Finances

Government programs such as the Paycheck Protection Program (PPP) were designed to help small business weather the COVID-19 pandemic from a financial perspective, offering forgivable loans to allow employers to pay their staff during the crisis. Unfortunately, the demand for these loans far outstripped the current supply, and few small business applications were approved for funding during the initial round of funding. A second round of funding was approved in late April, with potentially more on the way. Still, practice owners and operators learned quickly that this program is not necessarily the financial panacea they were hoping for.

So what are some other options? For practices that applied for and did not receive PPP funds (or even, perhaps, for those that did), it may be worth talking to your bank about opening a line of credit for emergency use. Some banks may not be accepting these applications at the current time, but it won't hurt to ask about them. If you are able to open a line of credit, use it cautiously, knowing that it is not a forgivable loan, but may help you in times of a real financial need, either now or in the future.

By now, practices have all made the tough decision on which employees to lay off, which to furlough and which to keep on the payroll. Perhaps you have even furloughed yourself to cut down on expenses. These are difficult decisions, and what makes sense for one practice owner may not for another. Perhaps hoarding your cash is the best approach for your practice. Perhaps spending on updates to your marketing materials or advertising campaigns to differentiate yourself when your doors re-open is wise. It's really an individual calculation.

Telehealth is the one area of healthcare that has seen widespread growth during the COVID-19 crisis. Telemedicine visits are currently being reimbursed by the Centers for Medicare and Medicaid Services, as well as many private insurers, at the same rate as in-person visits. As the general public has grown more comfortable with video-based applications, the quality of these interactions is certainly improving. Will telehealth continue to play a significant role once the current pandemic is under control? It certainly seems likely.

Something to think about: What about some really outside the box options? Can you get your hands on COVID-19 test kits that you can sell to your patients? Be creative and think about things your patient population needs right now that you may be able to offer.

What Does the Current Crisis Mean for the Future of Independent Health Care Operations?

This is the big question on the minds of many practice owners and operators. Now that things are opening back up again in certain parts of the country, what is the landscape going to look like? It's obvious by now that things are going to be different when individual states give the green light for elective surgical procedures. Even the boldest of patients may initially be apprehensive when they return to your practice. Your staff likely will be nervous as well. It's important to develop a strategy now to figure out what your practice will look like when you do re-open. How many patients will you be comfortable scheduling in the first week or month? What is your cleaning routine going to look like between every patient? Who is going to need to come in close proximity to each patient? Will you provide masks and other protective equipment to each patient or rely on them to provide their own?

Then there is the financial health of your patient population. Are they going to be able to pay out-of-pocket costs for elective procedures if they or their spouse/partner has been laid off? How do you remain sensitive to the budgets of your customers while also focusing on your practice's bottom line? What about the financial health of your staff? How badly will the loss of several paychecks affect them? How many may decide not to come back, either for financial or health reasons? How will you account for those contingencies?

Some practices may have traditionally relied heavily on educational events where they invited prospective patients to learn more about the services they offer. These will likely need to look quite different, at least in the short term. However, patients will still need education of some sort, so will you be a pioneer in figuring out the best way to reach potential new customers effectively?

Don't forget to lean on your most trusted vendors. They are likely coming up with their own materials to help their customers survive the COVID-19 pandemic. Everyone wants some sort of "grand re-opening" event, though it is likely going to be much more muted than anyone would want. That said, you are going to need to let your patients know when you are planning to re-open for routine visits and what that is going to look like. Once you set a firm date, let some of your vendors know as well. Perhaps they can help spread the word or offer promotional materials for you to adapt for your customer base.

This is, of course, not the first time that society has been faced with a regional or global crisis. Millions of people, including health care owners and operators, are now being faced with the same sort of challenge. You can either hole up, cross your fingers and hope that things will magically get better, or you can be a proactive driver of change to shore up the short- and long-term health of your practice. What kind of leader will you choose to be?

Candela is a market leader in the medical and aesthetic laser and light-based technology market. The company's products are sold in 90 countries worldwide and are backed by field service, clinical education and marketing support organizations. Candela offers customers a broad product portfolio, enabling physicians to provide advanced solutions for a wide range of medical aesthetic applications, including body contouring, hair removal, tattoo removal, wrinkle reduction, and the treatment of vascular and pigmented lesions, acne, leg veins and cellulite.

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