By Catherine Lightfoot, CPA, CHBC, Director of Healthcare at EEPB
There are three key factors that will affect profit margins: increase revenue, reduce expenses and mitigate risk. The last is not often thought of as a revenue enhancer, but without it, all improvements could be lost. Accountants have always advised the best strategy for improving cash flow is to review what has worked well historically, and then look at what could be improved upon. But things have changed, calling for a new plan, with new considerations. While most are just pleased to have survived the 2021 pandemic year, it does offer some unique opportunities for growth.
Increase Revenue with Telehealth
Policy changes during COVID-19 reduced barriers to access telehealth and promoted its use as a way to deliver acute, chronic, primary and specialty care. Insurance payers and Healthcare Professional Associations supported the transition to telehealth services in an effort to meet the pandemic’s challenges. The Center for Medicare & Medicaid Services (CMS) issued multiple waivers, providing flexibility due to the pandemic and granting payment parity between telehealth and in-person clinical care for Medicare patients.
Some of the original barriers to telehealth, i.e. infrastructure costs, was eliminated with the relaxed pandemic policies. One executive for a large Houston provider network estimated that, before the pandemic, there were 200 televisits per day; but under current policy, there are as many as 2,000 per day. Everyone is in agreement, telehealth has done well. The question is, what is going to happen when normal policy and old restraints resume? Providers should review their telehealth visits and categorize them for what should continue into the post-pandemic regime, and how the infrastructure will be built to handle this need.
The pandemic has taught us that there is both a need and a desire for telehealth. Now is the time to update policies and determine what’s required to keep this a viable option moving forward.
Reduce Expense with Remote Workers
We are just past the one-year anniversary of the original “stay at home” order that caused most employers to push at least some level of workers to remote status. Now, looking back over the last year and into the future we must ask ourselves, how will this adjust? Did production suffer in any areas that were working remotely? If production levels were still satisfactory, is there an opportunity for that group to continue to work remotely? Did your HR department become aware of any mental stress with those who were working from home? Would the culture of the office suffer if employees continued to work remotely? How would the footprint of your leased space alter with remote staff? If a hybrid option is more beneficial for production, without impacting culture and mental health, could that be set up and still realize some space savings? These are questions that companies will be asking and solving in the upcoming months.
The pandemic has given most of us a different view of our office footprint. Since tenant space is a major capital expense—often one of the largest of any business, right behind salaries—a footprint reduction could offer huge savings. It would be wise to gather your data, survey your employees and work closely with your HR group to reach workable solutions before making new lease commitments or lease renewal decisions.
Mitigate Risk with Cybersecurity Measures
As we engage in more telehealth practices and manage remote workers using home computers, it is critical to revisit cybersecurity policies and procedures. Cybercriminals did not stop during the pandemic. If anything, they became more active, knowing that individuals could easily be caught off-guard with all of the other distractions they were facing. Your employees are and will continue to be targeted by these cybercriminals. You can have all of the most sophisticated systems and securities positioned, but it will not matter if someone “unlocks the door.” In the cyber world, this translates to an employee opening an email or simply clicking on the wrong spot. Eighty-eight percent of data breaches are caused by social engineering tactics designed to trick people to do just that. Along with all the other adjustments required during the pandemic and beyond, we need to make sure that security training programs are a high priority—not to be postponed or put on the backburner. While continuing to monitor external threats like malware, phishing and even the dark web, it’s also important to keep your first line of defense (your employees) strong!
Summary
A review of these three areas—increased revenue, reduced expense and risk mitigation—within the context of pandemic lessons learned, will start to benefit your company by improving cash flow and increasing profit. Consider innovative ways to accomplish business development goals and create a work environment that makes sense, and makes money, in our new reality.