Making Dietitians More Financially Successful Karen Kiver Patalano, - - PDF document

2/22/19 1 Making Dietitians More Financially Successful

Karen Patalano and John LoConte

Disclosure

• Karen Kiver Patalano, MBA, RD, LDN, CDE
• KP&M Inc. dba KaiZen Healthcare Solutions parent company of

KaiZenRD EMR

• Founder/Employee
• Board member
• Stock/Shareholder

Disclosure

• John LoConte
• CPA, Licensed in Massachusetts
• Founded, Operated and Sold an IT and Business Consulting Business
• Business Coach and Management Consultant - Vista Strategic Advisors
• Quickbooks On Line – Advanced Certified Pro Advisor
• Licensed Insurance Agent in MA, NH, NC and FL

Basic Building Blocks For A Dietitian Business

• Theme Song
• Determine Personal Profitability Goals
• Address Ways to Increase Revenue
• Evaluate Methods of Controlling Costs
• Mitigate Risk

Are You a Lifestyle or Growth Business?

Lifestyle

• Freedom
• No Employees
• Subject to a Revenue Ceiling
• No Succession Plan
• No Significant Intrinsic Business Value

Growth

• Unlimited Revenue Potential
• Relies on multiple employees
• Requires Succession Planning
• Business Retains Value w/o Owner

Life Style or Growth Definitions

The owner of a Lifestyle Business is typically satisfied and motivated by working ”IN" the business. The owner of a Growth Business owner focuses and thrives from working ”ON" the business.

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Ways to Become More Profitable

• Increase Revenue
• Control Costs

Not So Good Ways to Increase Revenue

• Lower Your Prices
• Rely Exclusively on your Web Site or Social Media (e.g.

Healthprofs)

• Ignore Private Pay OR Insurance Opportunities

Business Development Strategies

Lifestyle

• 25% of your time on BD
• May need to augment your business

with other employment or business

• pportunities

Growth

• 50% or more of your time on BD
• Primary Goal is to increase client

base to accommodate additional employees

Business Development – How to Reach Your Market

• Retail
• Center of Influence
• Collaboration
• *AllYear Cooling, Delray Beach FL

Business Development – Retail Methods

• Should you try to Build the Coolest Web Site ever?

www.kaizenrd.com and www.kaizenhealthcare.com

• Online Directories (Insurance websites, Healthprofs, Yelp, Google Ads)
• Social Media (Facebook, LinkedIn, Lead Generation Services)
• More Traditional Advertising Sparingly, if at all (e.g. Print Media, Radio/TV, Yellow

Pages)

• Develop Celebrity Status

Business Development – Centers of Influence

• Engage with Other Healthcare Organizations
• Cultivate Other Professional Centers of Influence
• HR Managers and HR Consultants
• Health Fairs
• Lawyers, CPA’s, Bankers, Insurance Agents

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Business Development – Collaboration

• Consider a Joint Venture/Partnership
• Same or Different Vertical Market
• Same or Difference Geographical Location
• Complementary Services
• Health Clubs

Be Smart About Who You Associate With

Partnerships That Might Work

• Comparable Professional Skills
• Similar Growth Plans
• Individual Ability to Attract New

Business

Partnerships That Probably Won't Work

• Professional/Non-Professional
• Parent/Child Relationship – (First

Job for Child)

• Significant Difference in Equity

Contributions

Summary of Best Ways to Increase Revenue

• Devote Significant Personal Time to Business

Development

• Find/Address a Customer or Referral Source’s Pain
• Adopt a vertical market, "learn the language", and achieve

Guru status

Controlling Costs

• Variable Costs
• Marketing and Business Development
• Fixed Costs
• Occupancy
• Insurance
• Technology
• Operations
• Staffing

Occupancy Costs

• Don’t rent a place for 7/24 if you only need 2 days
• Consider sharing space with others

Insurance Costs – Risk Management Methods*

• Risk Avoidance (Refuse to engage in a behavior)
• Risk Mitigation (Proactive recalls)
• Risk Transfer (Insurance)
• Risk Acceptance (Self-Insurance)

*Investopedia

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Insurance - "Protection From Financial Loss"

• Recommended for both full-time businesses and "moonlighters"
• Professional Liability (Malpractice)
• General Liability ("Slips and falls", non-owned autos)
• Vehicle Insurance (If you own an auto used in business)
• Cyber Liability
• Umbrella Coverage (If you have personal assets that you don’t want to lose)
• Workers Compensation (May be required even if sole practioner)

Other Insurance Considerations

• Life Insurance (At least Term Life if there are dependents)
• Long Term Disability (Partial vs Total Disability)
• Short Term Disability (Three to Six Months)
• Cross Purchase Agreements (Life and Disability For Partnerships)
• Business Overhead
• Health Insurance (Health, Dental, Vision)
• Long-Term Care

Technology Costs – Say “Yes to the Cloud”

• Four out of every three people don't understand fractions*

*Bulldog Roofing, D elray Beach FL

• Enhanced Security
• Automatic Backup
• Device Independent (Windows, Mac, IoS, Android)
• Mobility
• Minimal Network/Server Support

Technology – Reasons to Stay on the Earth

• Can be more costly than desktop solutions
• Monthly Costs For the Cloud Go on Forever
• Limited Restore Options for Cloud Systems
• Data ownership/transportability concerns with Cloud Based Systems

Operational Processes

• Manual Processing and Recordkeeping (one end of the spectrum)
• Outsource All Billing Functions (7%-15%Fee?) (other end of the spectrum)
• Provide information to Biller, Negotiations, Corrections
• Utilize EMR Practice Management Systems Wisely

Using EMR Practice Management Systems Wisely

• Initial and Follow up Assessment Forms
• Easy to produce customizable patient recommendations
• Automated Billing
• Meal Plans
• SOAP and ADIME notes
• LEAP
• Eating Disorder and Pediatric Assessment Forms

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Benefits of a Cloud EcoSystem

• Can keep staff from seeing sensitive financial data (bank balances,payroll)
• Evolving connectivity between EMR Systems for Dietitians and accounting

systems

• Enhanced Reporting Beyond Canned Reports
• Increased efficiency by eliminating data entry tasks

How To Select A Cloud Eco-System

• How To Evaluate Systems
• Determine Need
• Document/flowchart processes
• Research and Evaluate Options
• Test Solutions Before Implementing
• Eco-Systems To Consider
• Cloud-Based EcoSystems (Quickbooks OnLine, Xero, Dynamics365, Sage Intacct,

Netsuite)

Small Business Accounting and Reporting Requirements

• External Stakeholders
• IRS
• State and Local Governments
• Department of Labor
• Banks and other funding sources
• Third Party Payors
• Insurance Companies
• Internal Stakeholders
• Patients
• Clinical Staff
• Bookkeeping Staff
• You

Accounting System Options

• Free Stuff (Wave)
• Desktop Applications (Potentially more features that free stuff and typically

less expensive than paid cloud services)

• Quickbooks, Quicken, Sage Peachtree, Microsoft
• Cloud Paid Services (QBO, Xero, NetSuite)
• Ignore it, and maybe it will go away (Most Expensive)
• Store paper documents in a shoebox and let your accountant sort things out at tax time

“This is the Profession We Have Chosen”*

• Hourly Effective Billing Rate

= $150/Hour

• Current Hours Spent Per Month on Admin Stuff

= 40 Hours

• Ideal Hours Available for Admin Stuff

= 10 Hours

• New Hours Available for Business Development

= 20 Hours

• Additional Billable Hours Target (2 Patients/Month) = 10 Hours
• Breakeven Cost Available for “Doing What You Love” = $1500
• *Hyman Roth in the Godfather, Part 2

Accounting Functions – “Stay in Your Lane, Pal”

There are 3 Kinds of People in the World, those that can count and those that can’t* *Bulldog Roofers, Delray Beach Florida

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Good News! IRS – Section 199 Passthrough Deduction

• Brand New with Tax Cuts and Job Act
• Available to certain non-employee Health Service Providers
• Equal to 20% of Net Income (maybe)

Do You Really want to be a Growth Business?

Pros

• Complete control
• Enhanced Billing Opportunities
• Leveraging employees can be least

expensive, most profitable way to grow

Cons

• Employee Turnover
• Training Costs and Commitments
• Downtime
• Recordkeeping
• One employee is not enough

Good Reasons to Have Employees

• Best hire is another dietitian as an employee.
• Exponential Revenue Opportunity
• Increase Value of Your Company
• Address Unplanned Absence/Succession Plan
• Keep Current/enhance professional knowledge
• Contribute to the success of others

Alternatives to Hiring Employees

• Business Consultants/Coaches
• CPA/Bookkeeping Companies
• Billing Companies
• IT Support Companies
• Office Staffing Companies

Beware of Illegitimate Contractors

• Independent Contractor (1099) vs Employee Designation (W-2)
• Facts and circumstances dictate but heavily weighted in favor of W-2 designation
• Issues relate to control of schedule, duties performed, number of "employers"
• Risks
• Designation after the fact can result in significant payroll tax liability
• Retroactive Minimum Wage/Overtime/Leave Time Liability
• Workers Compensation/Liability Concerns

Other Challenges of a Growth Business

• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
• Lines of Credit
• Personal Guarantees
• Home Mortgage Guarantees
• Other Common Loan Covenants
• Compilation/Review/Audit Requirement
• Ratios (e.g. Current Ratio, Debt Service Ratio, etc.)
• Bank Calls

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SBA Administration

• SBA Loans
• Strong Personal Credit History
• May Require Collateral and Personal Guarantees from owners
• Typically Requires Strong Financial Results and may not be available to Start-ups
• SBA Resources
• Can be extremely valuable and informative

Final Thoughts

• Life is too short –
• It's only money, but it sure helps when paying the bills
• Spend your time doing what you love while getting paid for it
• Regrets from something you didn't do can be more painful than from what you did do
• Determine how much is enough and when you get there, don't look back
• Growth Business Benefits – Can’t sell a business unless you have something to sell
• We wish you luck in your business because it is small business owners who represent the best

hope for the future of our country