PRACTICE MANAGEMENT
Chief Revenue Officer
Bob Smith
Additionally , there will be an annual adjustment for inflation starting in 2016 . Second , in order to qualify for the 831 ( b ) election the captive must pass 1 of 2 diversification tests . The two diversification tests are called ( 1 ) risk diversification and ( 2 ) relatedness test ( ownership test ). I have included below a thorough explanation provided by the staff of the Joint Committee on Taxation as well as an analysis of the Joint Committee on Taxation ’ s explanation regarding these tests .
Now , Today ’ s Practice looks at the role of being the Chief Revenue Officer ( CRO ).
One of the biggest challenges that the doctor as CRO faces , is the fact that most of the practice employees ( or “ associates ” as the current politically correct term ), don ’ t “ get ” the fact that they are part of a business that is a helping enterprise . They don ’ t consider revenues or margins or cost structure or budgets . They “ do their job .”
As the Chief Revenue Officer , you want to think about revenue streams ( products and services you can be paid for as a business ). It also has to be GOOD business . That means it has to be good for the customer , good for the practice and good for the owners . Revenue streams need to be thought of in terms of the resources needed to get them going , their value to the financial goals of the practice , their sustainability and life expectancy .
This begins with a good dashboard on where revenues come from now and the impact on the overall business . You want good reporting mechanisms to know what revenue streams are in place now and the resources and cost structure for each stream .
Ideally , you will get good payment clarity on categories like insurance type , cash , credit card , credit finance program , procedure , cost of goods sold , [ the CFO role develops this structure and reporting ]. With that information , you begin to have a basis of defining revenue stream opportunities that help the business achieve its performance goals .
Some of the current streams being explored include “ elective ” procedures or programs that have good margins and high perceived personal value . This includes the general needs that people have for increasing their real health , their energy , stamina , strength , overall wellness , mobility , agility , reduction of chronic pain and longevity . These are typical potential practice offerings that can be featured in the form of products and / or services that complement the practice business strategy .
In some cases , practices are creating the position of a business development role . This is NOT a sales rep , it is a case manager , or Director of Patient Well-Being , or staff advisory role , perhaps a program manager who helps people fulfill the potential of their bodies and overall health . It is chartered with building a pipeline of customers for products , services and procedures that have healthy margins , offer recurring purchases and have a long value lifespan . Sometimes , these roles are outsourced for leverage .
When planning and developing revenue streams , the real need here is for the doctor to shed all hats except for the CRO hat . The focus needs to be purely on generating the maximum revenues possible for an 18-36 month time frame , so that the well-being of the practice is improved or assured .
To get the most out of your “ CRO ” role , do the following for yourself :
1 . Identify the things that the practice does exceedingly well and have the best impact on the customers as well as your top and bottom lines .
2 . Identify the market opportunities for revenue streams based on geographic or specialty demographics .
3 . Recognize what you , yourself do well and where you need resources to generate these revenues .
4 . Create specific coherent offering and rollout to the market ( Your CPO or CMO roles will help here ).
17 TODAY ’ S PRACTICE : CHANGING THE BUSINESS OF MEDICINE