Retail Sales Case StudyHow do the concepts discussed in the feature article apply to an
actual O&P company? This Case Study provides a practical
example.
A couple of years ago, an O&P practice, Step Ahead O&P
LLC, (fictional name) had many patients who needed foot orthotics
and shoes or minor shoe modifications.
The practice had reached a point where it needed to make a
decision to either focus more making this part of its business
perform more efficiently and profitably or to aggressively minimize
it by redirecting it to people who specialize in it.
The practice realized that there were good business reasons to
pursue either strategy. Thus the owners agreed that they simply
needed to make a decision and be committed to the outcome. They
also considered what would be best for the patients in their
community.
This practice believed that there was more to gain by developing
a care pathway within their business for patients needing these
services rather than redirecting the business. So, the clinical
director went about putting the plan together.
The clinical director realized that the care pathway had to be
structured to be more cash-based than the normal insurance-based
custom O&P care. The clinical director also realized that since
the margins on this type of work are very slim, expenses had to be
kept to a minimum. Specifically, no additional overhead expenses
could be incurred and labor expenses had to be minimized. All of
these business goals had to be achieved while maintaining a high
level of clinical care and meeting all necessary legal
requirements.
To work within these parameters and achieve the desired results,
the clinical director created a separate company called Footsteps
LLC. This was a separate legal company, which had a very defined
scope of service and had a common owner with Step Ahead
O&P.
Even though the companies have a common owner, the clinical
director also saw that creating a separate company allowed for
different ownership structures for Step Ahead O&P and
Footsteps. Footsteps was not going to hold any contracts with
insurance companies, nor was it going to be a participating
provider with Medicare. All of its business was going to be
cash-based. Footsteps would offer to provide patients with any
information they needed to bill their insurance, but would require
payment at the time of service. Clearly, this approach would
eliminate the administrative challenges associated with collecting
for services rendered, reduce the expenses per patient encounter,
and increase cash flow.
The next step was for the clinical director to clearly define
both companies' role in patient care to incoming patients, to the
community, and to referral sources. To accomplish this, the
clinical director redecorated a "corner" of the practice's patient
waiting room to identify Footsteps and the services that were
associated with this name. Shoe displays and photos were used to
create this environment. The Footsteps name and logo was also
prominently displayed in the room that would be primarily used for
patient care under this umbrella. Simple marketing brochures and
handouts were created to define the services and how to use them. A
news release was sent to all local papers and healthcare journals
for broader communication of the change. Further, meetings were set
up with the primary local referral sources to introduce the new
company and to explain how these changes would better meet the
needs of the referral sources' patients.
The clinical director also addressed staffing issues. Due to the
anticipated volume of business, a full-time certified pedorthist
was hired. The pedorthist would be supervised by the clinical
director. The front office staff would handle patient scheduling
and cash collection. It was decided to use central fabrication for
most technical services, with the CPed doing minor modifications
and the current technical staff helping out in emergencies.
A separate company was created in the billing system to handle
patient scheduling and accounting separately from Step Ahead
O&P. A cash register was inconspicuously placed in the front
office to handle the exchange of monies. Finally, receipts and
other financially related paperwork was created with the Footsteps
name and logo. The process of handling patients was carefully
explained to both clinical and administrative staffs in order to
make the process flow efficiently.
The most costly investment was the purchase of an inventory of
shoes for fitting sizes. The clinical director and the pedorthist
decided to minimize the choice of shoes readily available, although
they did establish accounts with a few companies. Effort was made
to partner with shoe companies to establish consigned inventory and
the best possible payment terms.
Finally, processes were established to define how a patient
would be cared for who needed a more complex orthotic or prosthetic
device and services than those provided by Footsteps, along with
procedures for reimbursing Step Ahead O&P for expenses it pays
for that are the burden of FOOTSTEPS. For example, benefits for
Footsteps employees are provided through Step Ahead O&P-this
was possible because of the common owner-but need to be paid for by
Footsteps.
Author's note: The Case Study is intended to
place conceptual information into practice. However, it was not
possible to address all business or clinical issues in a brief case
study, and therefore, the reader should recognize the Case Study's
limitations. 
 |
Retail Sales: Is There a Place in Your Business?
- November 2002
Should we get more aggressively into shoes? Should our company grow into the area of post-mastectomy?
Would it be beneficial to our business and our patients if we carried some soft goods and walking aids in our offices?
Feature
|
|
Table Of Contents - November 2002
|
