Insight

Telemedicine & Financing

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:

  1. 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.).
  2. May need to change staffing schedules across all staff levels to accommodate video appointments and follow up.
  3. May require additional training on conversations and content and follow up activities (including HIPAA, privacy, compliance, cross-sell techniques, etc.)
  4. Will have to set up new General Ledgers and P&L tracking for Telemedicine-related activities
  5. Will have to account for costs associated with marketing these new / formalized activities (print, email campaigns, social media outreach, PRs, etc.)
  6. 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?

 

 

 

 

 

 

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