PROTECTING YOUR PRACTICE AND STAFF – Advice From An Experienced Marketing and Banking Executive
By Robert Gangi, CEO & President of RG Consulting Services LLC
Creating a safe environment for your staff and clients has always been an integral part of running your practice. Now, it’s become a differntiator for you in the marketplace. Prospective and current clients want to feel like you’re taking all the right steps to make their visit relatively worry-free. That starts with the physical changes: dividers, fewer lobby chairs, staggered scheduling, reinforcing signage, telemedicine/teledentistry, and commitment to continue these long after the pandemic isssues have subsided.
The next part of differentiating yourself from your peers is to get the word out! Consider launching a 4-6 week marketing campaign, communicating what you’re doing, what you’ve done, and why. It should include testimonials from recent visitors and current staff to confirm their comfort with the revisions. Lastly, you should reiterate not just how to keep safe when they’re in public spaces, but how they can personally take care of themselves as it relates to why they come to see you. For example, hand cleanliness and flossing (dental), best use of hand sanitizers and eating healthy, or proper mask purchase criteria and the importance of exercise. It’s such a good time to be creative in your messaging. Their expectations have changed and you need to recognize that and accommodate accordingly.
There’s also the investment in setting up a safe physical space, which will cost actual money. But what’s the investment look like from the start, and what will it cost you to make this work well? “Investment” can take a variety of forms: time, people, equipment, support from partners and outsourced experts. Some things to consider:
- Physical changes to office space
- New cleaning and sanitizing equipment and routines (products, air purification units, PPE)
- Changes needed to implement new service delivery appraoches, e.g., telemedicine or teledentistry, followed by Remote Patient Monitoring (RPM) and related equipment.
- Upgraded technologies e.g., work from home (WFH) investment in equipment (VPN, laptop with video, headset/microphone, chair, Zoom or similar subscription, etc.), new backup systems, in-office bandwidth, and outsourced Tech Support.
- Legal issues to address, e.g., updated HR policies, additional training on HIPAA, privacy, compliance, cross-sell techniques, etc.,
- Costs associated with marketing these new/formalized activities (print, email campaigns, social media outreach, PRs, etc.)
As a former commercial banker focusing on supporting practices across all profiles, I know that you’ll likely need access to cash to support the costs associated with the activities listed above. The traditional approach is either via a revolving line of credit and/or a short-term loan. Money right now is very inexpensive, so it’s a good time to call your bank’s Relationship Manager. Keep your cash with the goal of having at least six (6) months operating cash in your account for emergencies or further disruptions. Expect that the capital needed will range between $25,000 – $75,000. If you select to invest now in RPM tools, you can expect to add at least another $40,000-$60,000 to the capital expenditures.
Even though this amount seems relatively small, unfortunately, COVID-19 has many banks cutting back on extending new credit due to perceived increased lending risk. With the pandemic, the SBA had made available the EIDL and the PPP, and the U.S. Department of Health and Human Services’ Provider Relief Fund. None of the three is available right now, but may re-open for new applications before the November 2020 election. There also are alternative funding sources that utilize your loyal patient base that can invest in your practice and in you (ask me about SMBX). We can help you there if you’d like to know more.
Lastly, you only know what you know and sometimes need to turn to others who have a focus on executing these changes. I mentioned earlier the importance of utilzing firms that have extensive experience in handlng these new issues. The Healthcare Business Consortium (HBC), www.healthcarebusinessconsortium.org includes all of the healthcare-focused experts across all relevant fields that you’ll need to move your practice forward. Lots of things to think about and it’s always helpful to find reliable and experienced professionals to support you now and in the long-term.
Albert Einstein was quoted: “In the middle of every difficulty lies opportunity.”
Nothing could be more appropo to describe what we’re all going through right now and how Telemedicine and Teledentistry have become the proverbial lemonade from lemons. Practices of all specialties have had to change how they do what they do for their patients, which includes implementing a video consulting subset within their day-to-day operations. And when done right, Telemedicine or Teledentistry can be a strong revenue generator for your practice. But what’s the investment look like from the start, and what will it cost you to make this work well?
“Investment” can take a variety of forms: time, people, equipment, support from partners, and physical space. Some things to consider:
- May need to reconfigure office space to a “private studio” – could also be work from home (WFH) investment in equipment (VPN, laptop with video, headset/microphone, chair, Zoom or similar subscription, etc.).
- May need to change staffing schedules across all staff levels to accommodate video appointments and follow up.
- May require additional training on conversations and content and follow up activities (including HIPAA, privacy, compliance, cross-sell techniques, etc.)
- Will have to set up new General Ledgers and P&L tracking for Telemedicine-related activities
- Will have to account for costs associated with marketing these new / formalized activities (print, email campaigns, social media outreach, PRs, etc.)
- Phase two of the effort may include Remote Patient Monitoring and related equipment. RPM tools communicate biometric data, such as blood pressure, using mobile medical devices to collect and transmit data, allowing for remote monitoring of patients’ health status while they reside at home.
As a former commercial banker focusing on supporting practices across all profiles, I know that you’ll likely need access to cash to support the costs associated with the activities listed above. The traditional approach is either via a revolving line of credit and/or a short-term loan. Money right now is very inexpensive, so it’s a good time to call your bank’s Relationship Manager. Keep your cash with the goal of having at least six (6) months operating cash in your account for emergencies or further disruptions. Expect that the capital needed will range between $25,000 – $75,000. If you select to invest now in RPM tools, you can expect to add at least another $50,000-$75,000 to the capital expenditures.
Even though this amount seems relatively small, unfortunately, COVID-19 has many banks cutting back on extending new credit due to perceived increased lending risk. With the pandemic, the SBA had made available the EIDL and the PPP, and the U.S. Department of Health and Human Services’ Provider Relief Fund. None of the three is available right now, but may re-open for new applications when Congress comes back into session. There also are alternative funding sources that utilize your loyal patient base that can invest in your practice and in you. We can help you there if you’d like to know more.
Bottom line is that Telemedicine and Teledentistry are here to stay. The question is: How will you make it work for you?
THE EIDL IS BACK!!!
Effective 6/15/20, the Small Business Administration reopened its Economic Injury Disaster Loan (EIDL) program to all small businesses. This is really good news for any business owner as SBA had been slowly phasing it out since its complementary re-launch alongside the 4/3/20 CARES Act. Initially, the loan limit was $2 million, then reduced to $150,000 then capped at $15,000. It then progressed to just for those businesses in Agriculture industry, then was cut off altogether, quietly, by early May.
The program’s return comes after a June 9 letter from a bipartisan group of House members detailed issues with the original EIDL program. The lawmakers said they were disappointed in the closure and called on the agency to both reopen the loan program and lift the lending cap. They expressed concerns that the program lacked transparency or even a way for applicants to track their loans.
According to their letter, as of May 30, the agency had made 707,613 EIDLs totaling nearly $55.8 billion, despite the fact that Congress had provided $50 billion in lending authority to support $366 billion in new lending. The SBA has since reported about 1.33 million loans approved — for a total of $90.9 billion in total dollars, according to data through June 12.
EIDLs are basically working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in agriculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster.
The loans can and should be used to pay debts, payroll and other bills — including items not covered in the separate but popular $649 billion Paycheck Protection Program. Additionally, all COVID-19 related expenses for reopening your business, e.g., dividers/”sneeze guards”, masks, gloves, hand sanitizer, air filtration systems, touch-less entries to the office or lounge or restroom, reconfiguration of office layout, can be covered by this loan. An EIDL cannot be used to refinance existing debt. Click here to read more about what’s needed.
These loans will still be capped at $150,000 per company and with an interest rate of 3.75% for businesses and 2.75% interest rate for nonprofits. The EIDL also comes with the chance to apply for a cash advance of up to $10,000. While the loans call for repayment, the cash advances need not be repaid, even for applicants who ultimately don’t receive a loan. However, while the loans are tax-free, the tax status of the advances remains unclear.
- Credit History: Applicants must have a credit history acceptable to SBA.
- Repayment: Applicants must show the ability to repay the loan.
- Collateral: Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.
- Interest Rates: The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate for this program is 3.750 percent. The interest rate for non-profits is 2.75%.
- Loan Terms: The law authorizes loan terms up to a maximum of 30 years. SBA will determine an appropriate installment payment based on the financial condition of each borrower, which in turn will determine the loan term.
- Loan Amount Limit: Up to $150,000 to alleviate economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance and other recoveries up to the administrative lending limit. SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates.
- Loan Eligibility Restrictions: Noncompliance – Applicants who have not complied with the terms of previous SBA loans may not be eligible. This includes borrowers who did not maintain required flood insurance and/or hazard insurance on previous SBA loans. Note: Loan applicants should check with agencies / organizations administering any grant or other assistance program under this declaration to determine how an approval of SBA disaster loan might affect their eligibility.
- Refinancing: Economic injury disaster loans cannot be used to refinance long term debts.
Insurance Requirements: To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance. SBA requires that flood insurance coverage be the lesser of 1) the total of the disaster loan, 2) the insurable value of the property, or 3) the maximum insurance available.
Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email email@example.com for more information on SBA disaster assistance. Individuals who are deaf or hard-of-hearing may call (800) 877-8339. Completed applications should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.