With the cost of living on the rise and patient bases growing, it’s only expected that your providers will ask for an increase in compensation. Deciding if and how much of a raise is possible can be difficult, but a talented provider is worth the consideration.
Here are five questions to ask yourself when deciding whether you can afford to pay your provider more:
1. What is each providers’ total revenue contribution?
Five times, seven times, and ten times… these numbers are levels of contribution that each provider needs to contribute to a successful practice. Your practice revenue goal factors into determining what each staff member should be contributing to the goal.
2. What is the ratio of hearing aid sales for the provider?
Your practice needs to decide if the provider’s contribution is measured in units or dollars. Choosing the right measure leads to achieving the optimal average sale price (ASP), which is another major factor in determining the provider contribution.
3. Are there the sufficient opportunities for the provider?
The right number of opportunities gives your provider the patients they can help which in turn assists with their contribution to the practice’s success. Tools like a block schedule and a lead generation plan can provide more opportunities to help patients.
4. Is my provider set up for success?
Taking advantage of training programs can help your provider perform at the levels needed to reach the goals of the practice. Providers should stay current on technology available and the general direction of the industry. Having sufficient training and regularly communicating with others in their field will keep the provider current with the times.
5. Does my practice have the systems in place to help me make these decisions?
Having proper, up-to-date accounting and using a practice management system provides feedback both to the practice owner and to the provider on whether they are meeting their contribution targets. Easy access to these figures makes compensation decisions much more manageable.
Practice owners need to decide if they have the right providers to meet their revenue targets and if those providers are compensated accordingly to meet income targets. If your goal is to put your practice in the best sale position, you will benefit from having the majority of patient care done by their staff. Having the right mix of providers will not only cover all your patients’ needs, but it will also ensure a successful future transition to one of the providers or as a sought-after business acquisition. Whether you’re a large or small practice, growing or planning your exit, knowing your providers’ contribution will help you achieve your long-term goals.
CQ Partners can help the practice owner with answering all the questions that arise when considering provider compensation. Our Account Managers have tools and training to help you set up your provider for success. Our Provider Productivity Report used by our Sales Analytics team is a tool we can use to help see if your providers are reaching their goals. Our team can help you review your practice management system and profit and loss statements to make sure you have the right data to make these important financial decisions.
Reach out to us today for assistance in defining appropriate targets, tracking, planning for growth with your current providers and deciding if you have the right number of staff to reach your practice goals.