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

2/22/19 Disclosure Making Dietitians More Financially Successful • Karen Kiver Patalano, MBA, RD, LDN, CDE • KP&M Inc. dba KaiZen Healthcare Solutions parent company of KaiZenRD EMR Karen Patalano and John LoConte • Founder/Employee • Board member • Stock/Shareholder Disclosure Basic Building Blocks For A Dietitian Business • John LoConte • Theme Song • CPA, Licensed in Massachusetts • Determine Personal Profitability Goals • Founded, Operated and Sold an IT and Business Consulting Business • Address Ways to Increase Revenue • Business Coach and Management Consultant - Vista Strategic Advisors • Evaluate Methods of Controlling Costs • Quickbooks On Line – Advanced Certified Pro Advisor • Mitigate Risk • Licensed Insurance Agent in MA, NH, NC and FL Are You a Lifestyle or Growth Business? Life Style or Growth Definitions The owner of a Lifestyle Business is typically satisfied and Lifestyle Growth motivated by working ”IN" the business. • Freedom • Unlimited Revenue Potential • No Employees • Relies on multiple employees • Subject to a Revenue Ceiling • Requires Succession Planning The owner of a Growth Business owner focuses and thrives from working ”ON" the business. • No Succession Plan • Business Retains Value w/o Owner • No Significant Intrinsic Business Value 1

2/22/19 Ways to Become More Profitable Not So Good Ways to Increase Revenue • Increase Revenue • Lower Your Prices • Control Costs • Rely Exclusively on your Web Site or Social Media (e.g. Healthprofs) • Ignore Private Pay OR Insurance Opportunities Business Development – How to Reach Your Business Development Strategies Market • Retail Lifestyle Growth • Center of Influence • 25% of your time on BD • 50% or more of your time on BD • Collaboration • May need to augment your business • Primary Goal is to increase client with other employment or business base to accommodate additional opportunities employees • *AllYear Cooling, Delray Beach FL Business Development – Retail Methods Business Development – Centers of Influence • Should you try to Build the Coolest Web Site ever? • Engage with Other Healthcare Organizations www.kaizenrd.com and www.kaizenhealthcare.com • Cultivate Other Professional Centers of Influence • Online Directories (Insurance websites, Healthprofs, Yelp, Google Ads) • HR Managers and HR Consultants • Social Media (Facebook, LinkedIn, Lead Generation Services) • Health Fairs • More Traditional Advertising Sparingly, if at all (e.g. Print Media, Radio/TV, Yellow • Lawyers, CPA’s, Bankers, Insurance Agents Pages) • Develop Celebrity Status 2

2/22/19 Be Smart About Who You Associate With Business Development – Collaboration Partnerships That Probably • Consider a Joint Venture/Partnership Partnerships That Might Work Won't Work • Same or Different Vertical Market • Comparable Professional Skills • Professional/Non-Professional • Same or Difference Geographical Location • Similar Growth Plans • Parent/Child Relationship – (First • Complementary Services Job for Child) • Individual Ability to Attract New • Health Clubs • Significant Difference in Equity Business Contributions Controlling Costs Summary of Best Ways to Increase Revenue • Variable Costs • Marketing and Business Development • Devote Significant Personal Time to Business • Fixed Costs Development • Occupancy • Find/Address a Customer or Referral Source’s Pain • Insurance • Technology • Adopt a vertical market, "learn the language", and achieve • Operations Guru status • Staffing Occupancy Costs Insurance Costs – Risk Management Methods* • Don’t rent a place for 7/24 if you only need 2 days • Risk Avoidance (Refuse to engage in a behavior) • Consider sharing space with others • Risk Mitigation (Proactive recalls) • Risk Transfer (Insurance) • Risk Acceptance (Self-Insurance) * Investopedia 3

2/22/19 Other Insurance Considerations Insurance - "Protection From Financial Loss" • Life Insurance (At least Term Life if there are dependents) • Recommended for both full-time businesses and "moonlighters" • Long Term Disability (Partial vs Total Disability) • Professional Liability (Malpractice) • Short Term Disability (Three to Six Months) • General Liability ("Slips and falls", non-owned autos) • Cross Purchase Agreements (Life and Disability For Partnerships) • Vehicle Insurance (If you own an auto used in business) • Business Overhead • Cyber Liability • Health Insurance (Health, Dental, Vision) • Umbrella Coverage (If you have personal assets that you don’t want to lose) • Long-Term Care • Workers Compensation (May be required even if sole practioner) Technology – Reasons to Stay on the Earth Technology Costs – Say “Yes to the Cloud” • Four out of every three people don't understand fractions* • Can be more costly than desktop solutions *Bulldog Roofing, D elray Beach FL • Monthly Costs For the Cloud Go on Forever • Enhanced Security • Limited Restore Options for Cloud Systems • Automatic Backup • Data ownership/transportability concerns with Cloud Based Systems • Device Independent (Windows, Mac, IoS, Android) • Mobility • Minimal Network/Server Support Using EMR Practice Management Systems Operational Processes Wisely • Initial and Follow up Assessment Forms • Manual Processing and Recordkeeping (one end of the spectrum) • Easy to produce customizable patient recommendations • Outsource All Billing Functions (7%-15%Fee?) (other end of the spectrum) • Automated Billing • Provide information to Biller, Negotiations, Corrections • Meal Plans • Utilize EMR Practice Management Systems Wisely • SOAP and ADIME notes • LEAP • Eating Disorder and Pediatric Assessment Forms 4

2/22/19 Benefits of a Cloud EcoSystem How To Select A Cloud Eco-System • How To Evaluate Systems • Can keep staff from seeing sensitive financial data (bank balances,payroll) • Determine Need • Evolving connectivity between EMR Systems for Dietitians and accounting • Document/flowchart processes systems • Research and Evaluate Options • Enhanced Reporting Beyond Canned Reports • Test Solutions Before Implementing • Increased efficiency by eliminating data entry tasks • Eco-Systems To Consider • Cloud-Based EcoSystems (Quickbooks OnLine, Xero, Dynamics365, Sage Intacct, Netsuite) Small Business Accounting and Reporting Accounting System Options Requirements • Free Stuff (Wave) • External Stakeholders • Internal Stakeholders • Desktop Applications (Potentially more features that free stuff and typically • IRS • Patients less expensive than paid cloud services) • State and Local Governments • Clinical Staff • Quickbooks, Quicken, Sage Peachtree, Microsoft • Department of Labor • Bookkeeping Staff • Cloud Paid Services (QBO, Xero, NetSuite) • Banks and other funding sources • You • Ignore it, and maybe it will go away (Most Expensive) • Third Party Payors • Store paper documents in a shoebox and let your accountant sort things out at tax time • Insurance Companies Accounting Functions – “Stay in Your Lane, “This is the Profession We Have Chosen”* Pal” • Hourly Effective Billing Rate = $150/Hour There are 3 Kinds of People in the World, those that can • Current Hours Spent Per Month on Admin Stuff = 40 Hours count and those that can’t* • Ideal Hours Available for Admin Stuff = 10 Hours • New Hours Available for Business Development = 20 Hours *Bulldog Roofers, Delray Beach Florida • 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 5

2/22/19 Good News! Do You Really want to be a Growth Business? IRS – Section 199 Passthrough Deduction • Brand New with Tax Cuts and Job Act Pros Cons • Available to certain non-employee Health Service Providers • Complete control • Employee Turnover • Equal to 20% of Net Income (maybe) • Enhanced Billing Opportunities • Training Costs and Commitments • Leveraging employees can be least • Downtime expensive, most profitable way to • Recordkeeping grow • One employee is not enough Good Reasons to Have Employees Alternatives to Hiring Employees • Best hire is another dietitian as an employee. • Business Consultants/Coaches • CPA/Bookkeeping Companies • Exponential Revenue Opportunity • Billing Companies • Increase Value of Your Company • IT Support Companies • Address Unplanned Absence/Succession Plan • Office Staffing Companies • Keep Current/enhance professional knowledge • Contribute to the success of others Other Challenges of a Growth Business Beware of Illegitimate Contractors • Independent Contractor (1099) vs Employee Designation (W-2) • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) • Facts and circumstances dictate but heavily weighted in favor of W-2 designation • Lines of Credit • Issues relate to control of schedule, duties performed, number of "employers" • Personal Guarantees • Risks • Home Mortgage Guarantees • Other Common Loan Covenants • Designation after the fact can result in significant payroll tax liability • Compilation/Review/Audit Requirement • Retroactive Minimum Wage/Overtime/Leave Time Liability • Ratios (e.g. Current Ratio, Debt Service Ratio, etc.) • Workers Compensation/Liability Concerns • Bank Calls 6