As it was for the rest of the world, 2020 was a challenge for us. Eye Centers of Tennessee, where I am chief executive officer, survived and, in fact, grew in 2020 — because we survived and grew post 9/11 and because we survived and grew during the financial crisis of 2008. Both of those crises taught us valuable lessons that allowed us to be prepared for 2020.

In this article, I will share those lessons.

CASH (FLOW) IS KING

As the saying goes, “If there is no margin, there is no mission.” Cash flow is the life blood of any business — it’s what keeps the doors open. It has to be constantly monitored and protected. Cash flow management is the single most important job of anyone who is charged with running a business.

So, when something like COVID hits, it’s necessary to introduce some flexibility to your payment terms. For example, if your terms are 30 days, you’ve got to go to 31. Yes, accounts receivable (A/R) people will call you when you do this, just as your A/R people will call your customers (I’m not a physician, so I don’t have patients — I have customers). You can’t let those calls bother you; it’s just part of business. You can’t ignore them, but if you tell them what’s going on — well, it’s my experience that everyone in business understands times like these.

So don’t be embarrassed. Your supplier’s A/R people may ask if you can send them at least a small amount of your total this month — just as practices do with their patients.

Our corporate vendors extended our payment terms and thus played a critical role in helping us control our cash flow. Understand that you will need to be proactive in getting those extended terms, though. If our customers stop showing up, there’s not a thing we can do about that. I called our main vendors and said, “Guys, I don’t have to tell you what’s going on; here’s what I think is going to happen. Don’t give up on us.” And every single one of them said, “We understand.”

If you contact them early and talk to them like a human being, you have a good chance of pre-serving your cash flow.

Also, you need to conserve your cash to pay your utility bills, because the utility companies will not negotiate with you. You have to make payroll; you have to make your tax payment. You have to pay the most critical things. You have to explain to your staff, “Guys, we need you 39 hours this week, not 40.” You have to keep in mind that literally every dollar is important.

It’s about surviving, not profit. When I was in the Marine Corps, we had an expression: “You’ve got to kill the dragon that’s getting ready to kill you.” Don’t worry about how many more dragons might be behind him. You have to prioritize things; that stack of bills on your desk will be there to deal with tomorrow.

KEEP THE CUSTOMERS COMING

Business boils down to getting a customer in the door. We have implemented several measures to ease people’s minds about the risk of infection. For starters, our recall team has a script. They call the patient and say, “Your appointment is tomorrow. You may be concerned; here are all the things we’ve done to make your visit safe. Please stay in your car when you arrive; we’ll come out to get you.”

They inform the patient that we have social-distanced chairs in the reception and dilation areas and ask that caregivers remain outside the clinic, unless the patient absolutely needs their assistance. In our optical areas, we spread out the dispensing desks and ask patients not to pick up frames without the supervision of the opticians. We clean each frame prior to it being put back in the display case.

If patients are still uncomfortable, we call every few weeks to see if they are ready to reschedule.

THERE’S NO REPLACEMENT FOR GOOD SYSTEMS

Part of our strategy has always been to control our own destiny, so we have resisted the outsourcing trend in practice management functions. Especially concerning to me is the increase in “revenue cycle management” (RCM) outsourcing. Since cash flow is, as I’ve explained, the most important part of any business, why risk that vital function to people you don’t know?

The pandemic gives us a perfect lesson in why this is such a bad idea: If the RCM company is in a region where government mandates a lockdown, every client the RCM company does business with suffers. Over the years we have invested in our own customer-acquisition system, a customer-retention system, a patient-reminder system, our own scheduling and billing system, our own A/R system and our own collections system. I want the people who work for us to spend 100% of their time working for us. I don’t want us to be just another stack of papers on a desk. With those systems in-house, it’s much easier to control performance.

In A/R, who does the insurance A/R? Who does the patient A/R? One employee’s entire job here is to take on accounts that go over 90 days. She reports every month where she started the month, where she ended and how many new people rolled onto the list.

We have an organized system that seeks out patients who have not returned for their annual exam. One person’s entire job is to go through and ascertain what happened to the patient. Our next attempt at notification — postcard, letter or a phone call — is determined by the length of time since their last visit.

If we can hire someone and train them to do it right here, that’s what I want to do. This approach outweighs any savings these outsourcing companies promise you. Why send those customers to a call center after you fought so hard to get them? I like to minimize the number of people we are dependent upon for our business.

RELATIONSHIPS MATTER

When your practice reaches a certain size, whoever is filling my role — CEO, administrator, etc. — spends a good deal of their life with lawyers, bankers and other businesspeople in their area, and develops relationships with them. By keeping those relationships alive, you create a storehouse of goodwill to draw upon in difficult times. It took a 5-minute phone call to get us a $250,000 line of credit when the shutdown hit.

I called our bank and said, “I think this is going to be bad, and the governor is thinking of shutting us down. Can we get a line of credit in case we need it?” And boom, it was done.

Another example is our merchant processor, who is located in Iowa. I’ve never met him, but we’ve talked on the phone and e-mailed for years. The company started by doing our credit card processing. Over the years, it became our equipment finance company, too, and issues our corporate credit cards, manages our miles (for the purchases that we make on our credit card) and installed our online payment system at no charge to us. The company became an important part of our cash flow management system.

Develop relationships with companies that offer multiple services like that, and then let those people do what they do. That grows their business, which helps your business. The speed and ease of doing those things is really important. Just as 9/11 and the financial crisis happened to everybody at the same time, so did COVID shutdown.

By implementing the steps I have outlined above, practices have an excellent chance of slaying even a pandemic dragon and keeping their doors open. OM

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