Proven Management Tips for Cutting Hidden Costs, Growing Revenues and Keeping Your Business Thriving

In this episode, we interview Todd McGee, a management consultant with over 20 years of experience helping healthcare entrepreneurs and businesses. From helping the largest independent allergy practice in Arizona to maximize revenues and streamline operations while slashing costs to helping the largest allergy practice in the country before founding his management company, Complete Allergy & Asthma, Todd is one of the brightest minds in healthcare management. However, his expertise isn’t only relevant to healthcare medical practices.

Join us now as Todd reveals tips that can save you thousands in business spend and increase profits by more than 100% without launching new customer acquisition campaigns. You’ll realize opportunities for improving your business by reviewing and maximizing current management processes, interactions with customers, and relationships with business partners.


In this episode of the Harvest Growth Podcast, we cover:

• Tips for succeeding as an entrepreneur without any business experience or expertise.
• Tips for growing revenue without launching awareness marketing or sales campaigns.
• Opportunities for cutting hidden business costs.
• And so much more!

Visit www.breathcomplete.com to learn more about how Todd’s management consultancy, Complete Allergy & Asthma, is helping Allergy and Asthma medical practices grow their company.

To be a guest on our next podcast, contact us today!

Do you have a brand that you’d like to launch or grow? Do you want help from a partner that has successfully launched hundreds of brands totaling over $2 billion in revenues? Visit HarvestGrowth.com and set up a free consultation with us today!

Transcript

Jon LaClare [00:00:00]:
Today's guest is my first interview ever with a management consultant. He's a Stanford MBA trained expert with over 20 years of experience helping healthcare companies grow their profits. He shares stories specific to medical practices that he helps, but they apply to any type of business you may have. We dive deep on growing your profits in ways that we haven't discussed on the show before. Check it out.

Announcer [00:00:23]:
Are you looking for new ways to make your sales grow? You've tried other podcasts, but they don't seem to know harvest the growth potential of your profit, product or service as we share stories and strategies that'll make your competitors nervous. Now here's the host of the Harvest Growth podcast, Jon LaClare.

Jon LaClare [00:00:43]:
Welcome back to the show. I'm excited to be speaking with Todd McGee. Now, we've been friends for over 20 years, I think Todd, Right. A long time we've known each other and kind of have gone our separate ways and come back. I'm really excited to be speaking with you again today and really to hear a lot about your career from the past decades, but more recently on how you've started a business recently utilizing a lot of your expertise in growing businesses. And we're going to talk about one specific type of business that you focus on. But a lot of learnings that our listeners can take really, no matter what business they own, as one of your expertise is really making businesses more efficient, helping them to grow, be more profitable, so really improving businesses.

Jon LaClare [00:01:23]:
I'm really excited to dive into the story, but Todd, first off, if you could just tell us a bit about your business, essentially who you are and what you do.

Todd McGee [00:01:33]:
Sure. Thanks, John. Yes, we, me and a couple, let's say industry veterans, put together a management company called Complete Allergy and Asthma. And the idea behind that was what we had seen in the industry is the allergy and asthma medical practice space is largely made up of very small to mid sized practices. Like a large allergy practice, for example, might have six physicians in it. So compared to a lot of the specialties out there, this is one that is still very much a mom and pop industry, not very consolidated. And so as a result of that, one of the things that I was able to observe over the, the past couple years prior to launching complete allergy and asthma was the fact that with these small practices, oftentimes they were really struggling with how do we grow? Should we grow if we're going to, should we add an additional physician? Should we move to a new location? And then on top of that, are we getting the maximum out of what we're doing today. Meaning, are we getting all the revenue that we should be entitled to for the services that we're providing? Or, you know, are there gaps in our system? Those gaps could be anything from poor reimbursement in your insurance contracts to not necessarily capturing all the events, all of the billable events, and so on and so forth.

Todd McGee [00:03:10]:
So, to summarize, we saw a need for experienced, kind of high level strategic management services and wanted to be able to provide those to these practices on a fractional basis. So rather than them hiring Todd or someone else on our team directly, they might be able to get a lot of the benefit out of us, with us spending a small portion of our time, and consequently for the practice, make it affordable for the practice to engage with people like us.

Jon LaClare [00:03:48]:
I think I have a couple of family members that are physicians. And in talking with them, physicians are notorious for being, of course, very intelligent, but many of them are not experienced in running a business. They don't realize sometimes when they go into medical school, you are not just going to be a doctor, but oftentimes you're a business owner, and you've got to figure out how to do the finances and really grow the business and focus on that side of it. It's not just medicine. Oftentimes right now, you can join a practice that can be different, obviously, but there's a lot of questions in their minds of how do they really run their businesses effectively and grow them. And I think that's similar, probably, to a lot of our audience members, where whatever your core expertise is, whether you're a physician or whether you do h vac, whatever it might be, you're good at the service, you're good at what you do. And on top of that, now you got to run this entire complex business. So it's great to have resources like your company, Todd, to be able to help them out.

Jon LaClare [00:04:44]:
Can you talk a little bit about your, you know, what was your background and experience that obviously, you know, this is a business you couldn't have started fresh out of school with no experience. Right. You've done, you've been doing this for a long time within businesses in different ways, but maybe share with our audience where some of your expertise comes from.

Todd McGee [00:05:01]:
Sure. Thanks. Yeah. So I've worked in this specialty for almost ten years now. I managed the largest allergy practice, independent allergy practice in the state of Arizona for six years. That included literally everything other than telling the doctors how to be doctors. Right? So changing vendors, working with insurance companies to improve our reimbursement, all of those different things. So it was a very hands on role.

Todd McGee [00:05:37]:
So I did that for six years, and then was recruited out of the company to join the largest allergy practice in the country, a group called Allergy Partners, and worked for them for two years, primarily focused on acquisitions as well as opening new clinics. And so what I was able to see over that eight plus years between those two positions was to see, again, kind of what these groups do well, what they don't do well. And to the point you were mentioning earlier, right. A lot of the, a lot of those physician owners realized that, you know, hey, I know medicine, I know some things about business. I know how to, you know, a lot of times they'll be pretty good at managing the medical staff, you know, the nursing staff, for example, that works with them, but they don't really understand the nuances of customer service. They don't necessarily understand how billing works, things like that. So having a window into a number of different acquisition candidates, you could see all of the good and the bad things that they were doing. And then with the group in Arizona, it was actually a really efficient, both in terms of patient volume as well as financially efficient practice.

Todd McGee [00:06:58]:
So I've had the opportunity to see, if you will, one of the best practices operate, and then a much broader variety of practices operate, both within allergy partners and then with the different acquisition candidates that we've looked at. So I've kind of seen the good and the bad, and can usually fairly quickly, our team can usually help people figure out, okay, here's a few things you could do differently to ultimately improve revenue or reduce costs or both, really.

Jon LaClare [00:07:29]:
It comes down to, when you're talking about growing profits of a business, there's essentially two ways to do it. You either grow your revenues or you reduce your costs, or hopefully some combination of both. I'd love to probe a little bit further on each of them, I guess. What are some common areas that you've seen to be able to help businesses, first of all, reduce their costs, even keeping their existing business the same. How do you cut costs out without losing quality of service?

Todd McGee [00:07:55]:
That's a great question. And you started with the true north on the cost side, which is.

Announcer [00:08:02]:
We'Re.

Todd McGee [00:08:03]:
Really looking at things that are what I would describe as transparent to the customer, which in this case is the patient. So you don't want to cut back on things that are going to make their experience less satisfying or to do anything to reduce the quality of care. But, for example, there are plenty of things to look at that can be substituted out. Right. So, for example, I doubt that it's going to make a significant impact to the quality if a practice switches from one supplier of copiers and printers to another supplier of copies and printers. But they might be able to save $10,000 a year or $20,000 a year or whatever the number is by simply making that change. Because we know from our experience about what a group should be paying for those costs. And if they're paying more than that or their equipment is substandard, that's a great change.

Todd McGee [00:09:01]:
You know, medical supplies in many cases can be very similar, whether you're working with, you know, one national distributor or another. In many cases, if you will, you know, the paper that they put on the exam tables is paper. Right. It's really, it doesn't make a difference, but it might make a difference in the cost. And so by being able to look on the cost side at things that are, you know, transparent to the patient or something more strategic, for example, maybe we do an analysis and we see that the rents are above market, that they're paying for the offices that they're providing care in. And maybe because the market has changed and the commercial real estate market currently is softer, there may be some opportunities in a substandard building to take advantage of the current commercial real estate market and move to a new location and either reduce your rent or be in an area that has higher traffic, that might get more people to see the sign on the practice to be able to see, hey, my allergies are bugging me. Let me pop into this place specifically on that we found in Arizona. When we moved from a location that was right behind a hospital in a big medical office complex, we had essentially no street visibility, and there is still very much in healthcare a retail element to it.

Todd McGee [00:10:34]:
And we moved from that location to one of the busiest street corners in metro Phoenix, and we had ten new patients a week just show up by seeing our sign and driving into the parking lot.

Jon LaClare [00:10:48]:
Right.

Todd McGee [00:10:48]:
So the move more than paid for itself just by the people walking in. So those are some examples of things you can do on the cost side of that don't impact patient care, but improve the bottom line.

Jon LaClare [00:11:02]:
Yeah, and I like that last example you shared. It's not always just about lowering your costs, but making your costs more efficient or more impactful. Right. So sometimes you might pay more for a better location, but if that location drives in more revenues, it can still help your profitability. And we'll talk about growth in a second, I want to probe a little bit further on a couple of things you said. One, you talked about how you've got this unique experience, having been doing this for years and years and seeing so many other practices. And some of our listeners, if they don't have that experience or know somebody that does, bring a consultant in, et cetera. Another option for business owners is to find, like businesses, right? Talk to other business owners in similar fields and get it probed down to understand.

Jon LaClare [00:11:47]:
And physicians, maybe that's a little bit tougher on because they're focused on what they do every day, but in other businesses, and that's why consultants have, can, like yourself, can be so great. Other businesses, you know, we're often open books, right, to work with others. We're all trying to help each other in some ways, if you're sometimes not a direct competitor, but talk to others to find out what those norms are in terms of costs and realize maybe I shouldn't be paying so much for whatever it might be. The other thing, too, I think, that we've discovered in our business over the years is sometimes you need to find the costs. Like you, we have costs that we find in our, our business that may have been running some software, for example, that we haven't even used for months, kind of forgot we had it. So it's just taking the time to analyze costs and realize that they're there. And like you said, then analyze. Are they helping your business? Can they be replaced? Can they be lowered? Sometimes it's just, man, do you use it at all, or is it even worth it?

Todd McGee [00:12:41]:
That reminds me of a great example. You know, phone technology has changed greatly over the past years, right? And the group I was managing in Arizona, we had some old, I'll call them, landline type lines that fundamentally we weren't using. And, you know, the bill was just getting paid, and these were not insignificant bills. And we finally had some. We brought someone in that was an expert on kind of managed it services and things like that. And they're looking at it and they're like, well, now that we're on this new phone system, you don't even need those lines. So what you're paying for your Internet is now going to effectively, you know, replace the cost of your phones. And the savings, I'm not exaggerating.

Todd McGee [00:13:31]:
This was five locations, but the savings was somewhere around $50,000 a year of just essentially lines that had become redundant. That if you're not paying attention to or you don't understand the nuance of your shift from a landline phone to a VoIP phone you could miss. Right. And so having learned that lesson, that would be one of the first things that we would look at is to understand their operations in some detail in certain kind of high value areas, such as communications, that things can just get missed. And it's a shame for a practice to keep spending that money when they don't need to.

Jon LaClare [00:14:14]:
Yeah. And I've discovered a few of those over the years, and it's always embarrassing, I think, how did I not catch this? But I'd rather deal with the embarrassment than to continue to pay these costs that really aren't helping drive the business forward, which, let's now shift it to talk a little bit more about the growth side. So we talked about costs and really growing your profitability by reducing or making your costs more efficient. What about the growth side? What have you seen have been some levers to help businesses really grow their revenues?

Todd McGee [00:14:44]:
Yeah, sure. So starting with what I would call the simpler and moving to the complex. So some of the simpler ones. When I say simple, what I mean is sort of along the lines of what we were talking about on the cost side, these are things that the practice doesn't necessarily need to do anything different than what they're doing today to capture this revenue. So what, what we've seen firsthand, dozens of times, is that practices have no idea how to negotiate insurance contracts. So, you know, most of the reimbursement for most medical practices, and certainly allergy and asthma practices, comes from what's called commercial insurance. So the United healthcares, the blue crosses the cigna's of the world. And for the population below the Medicare age.

Todd McGee [00:15:40]:
Right, and not on Medicaid. And so for most allergy practices, that will be 75% to 90% of their revenue will come from those sources. And it's not uncommon. We're working with a group in Pennsylvania today that had not negotiated their insurance contracts in over ten years. And despite the fact that obviously your costs have gone up, and particularly from COVID and beyond, on the medical side, costs have gone up, I'd say comfortably 50% over the past five years of running an allergy practice. And if you haven't renegotiated your insurance contracts, well, your reimbursement is unlikely to have changed. Some of them do reset on their own. They're indexed to different things, but many of them won't.

Todd McGee [00:16:36]:
And so by going in there and showing them how to do the work and then actually doing the work for them to initiate those discussions, to do the analysis to see how bad the problem is, then initiate those discussions with the insurance companies. Get the insurance companies to come to the table, which is not easy for these small businesses, and at least get what we can. Even if it's a few percent a year, it's a few percent of revenue on every patient that they see with no incremental cost increase. Right. And so it's essentially a 100% profit move. Another one that's kind of related to that is whatever we should be getting paid to versus what we're actually getting paid. And that involves taking a look at what they call the fee schedule, which would be, you know, if you come in to do allergy skin testing, we should be paid, let's just say $5 per scratch. When a scratch is put on the patient's back.

Todd McGee [00:17:40]:
Well, is the insurance company actually paying the $5 that they're contracted to pay per scratch? Are they paying that? But 10% of the claims are being denied and not being worked effectively. And so, net, they're paying the equivalent of $4.50 per scratch. Right. And so what can we do to get that $4.50 closer to $5? Sometimes it's documentation changes by the clinicians. Sometimes it's just grunt work of going back and arguing with sending medical records in, sending documentation and kind of arguing, if you will, through paper with the insurance companies, just to claw back as much of that fifty cents per scratch that you just lost. So those are the places that we start. And then on the longer term basis, then we're looking at things like, okay, is it taking too long for new patients to get an appointment? Allergy and asthma is a particularly interesting field in that a lot of times, allergies, for example, will be seasonal. And so when certain ragweed is in bloom, it may be a six week period that you've got to get those new patients in, because if it takes you eight weeks to get them in and their symptoms resolve, well, they're not going to come in and see you.

Todd McGee [00:19:10]:
But if you could get them in next week when they call and they're miserable, they're much more likely to become a new patient. They're much more likely to receive the treatment they need at the time and get started on the therapies that the physician recommends at that time, and then they become a patient potentially for life or if not for, you know, for a number of years. Right. So there's a, there's a time sensitivity to a lot of the symptoms that an allergy or an asthma patient are facing. And so, you know, getting them in quickly is one of the most important things you can possibly do, because new patients are the lifeblood of any medical practice and generally any business. And so, you know, if the patient's miserable and you can't get them into your practice, they're going to go somewhere else. And once they go somewhere else, you've lost them.

Jon LaClare [00:20:04]:
Yeah. I think you raised a couple of things that I think are really helpful for really any kind of business. One, and I'll just maybe change the way it was worded, because if we're not talking about a medical practice, for example, it's about, I think, raising prices, right? Raising the revenue per customer, and that could be charging more, whether that's going through insurance companies, whether it's raising the rates to your customer if they pay directly or is it increasing collections, right. So making sure every business has difficulty at times for collections. And there's a thousand ways to do that, right? One of which is making payments easier. Right. Getting it on credit. If it's, I mean, obviously with medical practices, you deal with insurance.

Jon LaClare [00:20:42]:
Right? But many other businesses may have the ability to pay via credit card or online invoicing. You know, it's funny, my business, we just got paid via check a couple weeks ago, and I told the client, I'm like, are you sure? Like, I don't think I've gotten a check in the mail for five years. Like, nobody pays that way. And it slows, it felt so slow, right? Like it took two weeks to get it and like, you know, deposit it. I'm like, what do I even do with this, right? So many ways have gotten efficient. Unfortunately, the insurance industry is still, you know, way behind. But when we get paid directly by our customers, it's, it does make it more efficient, easier, and the more ways you can accept payment for a lot of businesses can really help with that, too. And I love how you talked about being available, right? So being whatever that means for any individual business, but being ready when your customer needs you, right.

Jon LaClare [00:21:29]:
And sometimes that means you gotta. It may mean growing your staff during high seasons, right? So they're not waiting for sometimes hours. Right. You could lose a customer in hours, let alone weeks. So depending on what the business might be, but really being available can make a huge difference. So often in this podcast and in our business, we talk about growth as getting more customers. Right? That's what my business is. We do video marketing to bring more customers, more patients, whatever it might be, into the business.

Jon LaClare [00:21:54]:
And that's a big part of growth. I love that you talked about another side of it. Right. It's collections. It's about getting more out of each customer. It's about being more efficient on costs. A lot of ways, really, to tackle that growth. So I think this has been helpful to go in a little different direction than we normally do.

Jon LaClare [00:22:10]:
Well, Tata. Oh, go ahead.

Todd McGee [00:22:12]:
I was just going to say real quick. Yeah. Another example of that when you talked about kind of that sense of urgency is a lot of practices will do a great job leveraging what's commonly referred to now as advanced practice providers. So these would be nurse practitioners, physician assistants in our business, and where they can be really valuable in a practice, they can do lots of things, and in many cases, they can, you know, can provide primary care the same way a physician can. But one of the specific things that the best practices and the best locations I've seen do is they'll leverage those apps, advanced practice providers, for what I would call that acute urgent visit. Right. So almost like an urgent care type of a scenario. So they might keep two or four appointments on their schedule, open every day for that person that calls in this morning and says, hey, I was up camping all weekend, and now my asthma is flaring up because they've been sitting, you know, sitting out in the woods and around campfires and whatever is going on, and they just need to be seen today.

Todd McGee [00:23:19]:
Right. And so if you can be that hero today by getting them in and getting them some care and making sure that they're, you know, they're going to stay out of the urgent care and out of the ER, that's, you know, the stickiness of that relationship becomes a lot stronger. So just one last kind of thing to add on as far as the growth side.

Jon LaClare [00:23:42]:
Absolutely. And are there any resources that you'd recommend to our audience that have been helpful for your business?

Todd McGee [00:23:48]:
Yeah. When I got in, the doctors I was working for suggested and funded for me to go to two different conferences. One is by the American College of Asthma, Allergy and Immunology. And we're so creative in our specialty that the other one is called the American Academy of Allergy, Asthma and Immunology. But they put on programs. I actually participate with the college version of the practice management program, and that one's done in October and November, and it's a one day session and physicians will attend, but a lot of practice managers will show up or administrators, and we'll cover everything from how to bill to dealing with employee morale issues to compliance issues to hr issues. So kind of all of those business areas that these are businesses. Right.

Todd McGee [00:24:46]:
So all these business areas that the practice needs to cover, you can go and get a one day drink from the fire hose, you know, crash course on, on a number of topics, all of which will be relevant to running a practice. And the academy, they do a similar program in, in the summer. It was actually in Denver just a couple of weeks ago. And so those are, those are great programs. That one's a two or three day program, a longer program, but they're both excellent. And whether you're new to the specialty, new to being a practice manager or something like that, as a new physician, as a new business owner in the specialty, and I'm sure the other specialties have similar programs. So that would be my recommendation for anyone cutting their teeth in the industry. Yeah.

Jon LaClare [00:25:41]:
And conferences can be so helpful in virtually any industry. The nice thing about them is they're very, as you're saying, very specialized. Right. You can't, or I shouldn't say you can't. There aren't books for every specific thing, right. That we need to learn in an asthma and allergy practice, for example. There's not gonna be a lot of massive marketing or business books that teach everything you need to know because it's so specialized. But conferences exist in almost every field, and getting together with other people that are going through the same problems, looking for the same growth opportunities that you are, can make a huge difference because they're so specialized.

Jon LaClare [00:26:16]:
Whatever our industry or listeners might be in, look for these conferences. Look for opportunities to really get out there and learn from others in your field. Todd, is there anything I didn't ask you that you think could be helpful for our audience?

Todd McGee [00:26:29]:
I think we covered a lot. I hope it was helpful. And no, I think if you're interested in learning more about us, you can go to our website, which is just breathecomplete.com. and right on the front page on the homepage, we've got a couple little widgets that if you want to put some data in from your practice, we can provide you some very specific feedback at no cost to give you a taste of the type of work that we can do and hopefully provide help to a lot of the practices out there that are trying to figure out, okay, how do I get a little more out of what we're doing?

Jon LaClare [00:27:08]:
Well, thank you. I do encourage our listeners. Please check out their website, breathcomplete.com. as Todd said, it's in our show notes as well. So if you're driving, go check out the show notes when you get back to your computer as well. Also, did you know you can meet with a member of my team absolutely free for a 30 minutes strategy consultation? We've launched and grown hundreds of products and businesses since 2007 and learned some of our strategies while growing Oxiclean back in the Billy Mays days. We're here to help, so please go to harvestgrowth.com and set up a call if you'd like to discuss further.