Practice Management Boosting Revenue by Working Harder—or Smarter? Urgent message: With careful consideration and disciplined planning, ancillary services can add to your bottom line without significantly adding to your workload. Alan A. Ayers, MBA, MAcc “It was the best of times, it was the worst of times….” Lessons from the Retail Industry C w w w. j u c m . c o m Wal-Mart and Nordstrom are both profitable companies, but they attain their profitabil- ity in very different ways. Wal-Mart and other mass retailers focus on volume; their profit is mere pennies on the dollar but they know that low prices will sell more merchandise, resulting in a higher net income. A challenge for urgent care is that when third-party pay- ors set prices for medical serv- ices and offer network partic- ipation on “take it or leave it” terms, a provider must lower his or her operating costs to remain profitable. Because most costs in urgent care are fixed, the provider can be forced into a volume strategy of see- ing more patients and working longer hours. By contrast, Nordstrom and other specialty retailers focus on margin—limiting their appeal to a segment of consumers willing to pay more for personalized at- tention and unique merchandise. Nordstrom serves fewer customers than Wal-Mart, but makes more money on each sale. Likewise, urgent care providers who add high- © Images.com/Corbis ould Charles Dickens’ dis- course provide a better de- piction of the urgent care business today? Unprece- dented growth in recent years proves the value of a healthcare delivery model like urgent care, based on con- sumer needs for affordability and convenience. But urgent care is not im- mune from challenges facing every other medical pro- vider—e.g., declining third- party reimbursement and ris- ing operating expenses. Falling margins leave providers with just two options—to work harder or to work smarter. As you well know, urgent care providers are already working hard, seeing more patients per hour than ever and working longer hours to maintain their incomes. Working smarter involves diversifying income streams with high-margin services beyond the core business of walk-in care for illness and injury. It sounds easy enough, but successful implementa- tion requires careful consideration and disciplined planning. JUCM T h e J o u r n a l o f U r g e n t C a r e M e d i c i n e | Fe b r u a r y 2 0 0 8 29