Q&A: Refocusing Your Practice to Cope With COVID-19

by | May 18, 2020 | COVID-19

Stay strong as a business and lead in your market amid the COVID-19 pandemic? Yes, you can! Learn more about managing your practice through an unprecedented time in this post addressing five common questions from our Audigy membership.

 

Q: What financial aspects should I be analyzing?

A: Look at the practice’s cash flow, and then determine how to gain access to cash in the event the practice warrants it.

 

Determine cash flow using a 3-step process:

1. Sources-and-Uses Analysis

  • Determine how much cash is available and how much collectible accounts receivable is owed to the practice.
  • Establish where cash is being spent — for example, payroll, rent, equipment.
  • Assess how long your cash on hand can cover expenses and whether capital is available in the event of a shortfall.

2. Cash-Flow Management

  • Determine the expected revenue generated over the next 3 to 6 months.
  • Assess alternative ways to generate revenue.
  • Determine whether there is a need for outside financing to cover expenses.

3. Revenue-Recovery Plan

  • Determine gap revenue — difference in historical revenue by month in the prior year compared to COVID-19 revenue for the same months this year.
  • Determine opportunities to close the gap revenue, such as extended schedule, weekend hours.
    • Share this information with employees to set expectations and develop your business strategy.
    • Determine your communication strategy to patients.

 

Other Financial Considerations

Personal Resources

  • Assistance from family and friends
  • Availability of personal or residential line of credit
  • 401k withdrawal
    • 10% early withdrawal penalty waived on aggregate distributions of up to $100,000 on workplace retirement plans and individual retirement accounts for COVID-19-related expenses
    • Can elect to pay federal income tax on the distribution over 3 years or repay the distribution within a 3-year period to an eligible retirement plan
  • Check with your state for cash-related stimulus programs that might be available

 

Professional Resources

  • Availability of short-term payment deferment, if business funded through a manufacturer loan
  • Availability of business line of credit
  • Small Business Administration loan, which may provide up to $10,000 in emergency loan funding within 3 days of loan origination
  • Leveraging of your relationship with the bank

 

Expense Reductions

rent deferral letter

 

Q: What considerations should I give to staffing?

A: Staffing considerations depend on whether your practice is operational.

If operational — for example, servicing patients or able to engage in meaningful business activities without patient flow — with reduced hours for staff members:

Work Share Program — 28 states have a program in place; programs vary by state

  • General Considerations
    • Employers must apply and qualify
    • Program is available when 10% of workforce is affected or it affects 3 workers within a business
    • Maximum 45% reduction in employees’ workload
  • Application to Practices
    • Best suited for hourly employees that perform similar duties
    • Under this program, 2 full-time employees would split full-time duties — each working at least 20 hours weekly, and the Work Share program would provide supplemental wages

 

Unemployment Insurance

  • General Considerations
    • Available in most states that don’t offer Work Share program
    • Employees must apply and qualify
    • Employee claims impact the practice’s revenue; employers are financially responsible for unemployment benefits

 

If not operational — for example, following state-mandated closure, lack of work performed remotely, or lack of capital to remain open — with no hours available for staff members:

Decision whether to lay off or furlough employees should follow assessment of government relief programs

Coronavirus Aid, Relief, and Economic Security (CARES) Act

  • Emergency loans for small business — fewer than 500 employees — available for fixed costs such as salaries, medical benefits, rent or mortgage, utilities, and interest on existing debt
  • Emergency loan monies cannot be used to expand or increase the business
  • Possibility that the emergency loan could be forgiven if business maintains its current level of employees and their salaries
  • If employees are laid off or if salaries are reduced, borrower may have to repay loan rather than receive potential loan forgiveness

 

Families First Coronavirus Response Act (FFCRA)

  • For full-time employees, this benefit of 80 hours provides either:
    • 100% of salary — capped at $5,110 for the 80-hour period
    • 66% of salary — capped at $2,000 for the 80-hour period
  • Options depend on rationale for absence from work, with reasons permitted including:
    • Being diagnosed with COVID-19 or showing substantial symptoms requiring homebound stay
    • Being placed in mandatory or self-quarantine isolation
    • Having to care for others affected by COVID-19, including childcare when schools are closed
  • In the event the employee can work from home remotely, the act does not provide benefits

 

Understanding Layoff vs. Furlough

  • Layoff
    • Separation of employment
    • Employee no longer on the payroll, thus ineligible for company-sponsored benefits and should investigate COBRA coverage
    • Could impact employer’s unemployment insurance costs
    • Many states allowing temporary “standby” option, where employee doesn’t have to seek other employment and must be ready and willing to return to practice when recalled
  • Furlough
    • Temporary suspension of work and pay
    • Employee might be eligible to retain company-sponsored benefits, at company’s expense
    • In some states, employees might be eligible for unemployment insurance benefits

 

Q: How can I optimize my schedule?

A: Block scheduling — whether in a hearing care practice or an ENT Clinic can offer substantial benefits:

  • Provides time to maintain preventive safety measures — for example, infection control
  • Allows you to prioritize revenue-generating appointments
  • Improves productivity and efficiency by scheduling similar appointment types during a period in a given day
  • Helps put you in control of time needed to attend to patients, staff, and administrative duties

 

Q: How should I communicate with my patients?

A: Be proactive — communication with your patients is crucial to (1) your overall commitment to patient care and (2) practice differentiation within the marketplace.

  • For commitment to patient care:
    • Follow up with patients who are still under a trial period.
    • Reschedule those with existing appointments and provide modified services, as needed.
    • Ensure your website provides updated working hours and modified services.
  • For practice differentiation in the marketplace:
    • Highlight your service offerings through various electronic platforms such as blogs, social media posts, and how-to guides.
    • Internet usage has spiked with more Americans mandated to stay at home, making it all the more important to refresh your digital-marketing strategies in light of the pandemic.
    • Update your website content to include topics searched by potential patients — “hearing loss” and “hearing aids,” for example.
    • Consider marketing your services, supplies, and educational content to your patient database and community through digital means as well as approaches such as newspaper, radio, and television spots — depending on your market.

 

Q: What can I do to maximize my current downtime

A: Given the disruption in patient flow and operations, now is a good time to complete those projects that have been put off. To help make that happen:

 

  • Download Audigy’s Healthy Practice Checklist — available for both audiology and ENT practices — to reestablish your business philosophy, given the recent changes in how health care will be practiced.
  • Perform data governance, ensuring you have high-quality records by cleaning up your database — including removing patients no longer being serviced; removing unused appointment types, such as body aid fittings; and checking up on referral sources. Cleaning up the data also prepares the practice for marketing automation an effective relationship-building strategy designed to reach and engage patients at every point in their life cycles through specific, targeted, and personalized communication.

Get More COVID-19 Resources For Your Practice

Share This