PracticalDermatology

While many dermatologists follow the practice’s revenue figures that show profit and loss and percentages of overhead, most don’t analyze individual numbers for various procedures. When one considers cosmetic services, review of numbers is essential, since these numbers affect any program of advertising, as well as the inventory of products sold in the practice.

This article discusses how my practice has approached these analyses and notes options to consider for your practice. While there is no single approach to this area, it may be helpful to view a framework that has been work- able for us and that could be useful for most dermatology practices.

ESTABLISHING THE NEED FOR A LIST

For any practice, creating a good list involves gathering a compilation of the names, procedures performed, generated income, and email addresses of your cosmetic and/or medical patients. In addition, the chronology of treatments and, in particular, the date of the last treatment performed, is vital to know for marketing purposes. Generally, this list is kept on a Microsoft Excel spreadsheet.

Whether you are a new practice or an established one, the concept of a monthly or yearly goal may be daunting. For this reason, many dermatologists simply ignore the setting of goals and trust in fate. Having worked in both ways over the years, I would recommend that knowing and analyzing previous numbers, setting goals, and adopting a program is preferable and more effective.

For the first four years of my practice, I didn’t have a serious program for crunching numbers and instead operated with bottom-line numbers principally. My accountant at the time felt the bottom line was satisfactory. It was my father who suggested an in-depth look at procedures and revenues over time. By the time he made the suggestion, I had ample years of data, so it was only necessary to take the data and organize it on paper/computer spreadsheets. The results were eye-opening!

I found that the cosmetic portion of my practice was growing significantly, which wasn’t visible in a strictly bottom-line approach. Additionally, I could see that certain parts of my practice were quite remunerative, while others were poor generators of income. Since that time, I have focused on the “winners” each year while also working diligently to determine what could be done with the “laggards.”

When cosmetic procedures became more numerous and elaborate, I began to divide patients into groups, depending on the procedures they elected. It became clear to me that there were certain procedures, such as laser hair removal, that might be excellent cross-selling opportunities, and that some procedures performed on female patients might also be a good option for husbands and friends, if marketed appropriately. Based on the numbers and their analyses, one of my first data-driven marketing pieces went out to cosmetic patients with an offer that tested this notion.

Interestingly, the marketing to friends/spouses didn’t work at all, but the offer of a free peel with the purchase of certain products succeeded remarkably. This confirmed my belief in the value of marketing and, in particular, direct mail marketing. The practice has continued this way ever since, also incorporating Internet and email marketing as a follow-up.

When your practice is just beginning, it is incumbent to try baby steps first. This will allow you incremental growth. Without knowing who is accessing your services and what services they are accepting, no marketing program will fully succeed. This generally means that you need at least one staff member who does the hard work of setting up a list and managing it over the year. Importantly, list management is a huge task and one that should be given only to a trusted and detail-oriented member of the staff.

The pitfalls of not performing careful list management range from loss of data that was difficult to acquire to serious setbacks (some financial in nature) if data is somehow used inappropriately. For this reason, it is not only important that the individual managing these lists is intelligent, but also that he/she is informed on the benefits and regulations regarding lists and emails and takes the job seriously. Additionally, you and your assistant should recognize that the list is probably the most important piece of data in your practice and must be handled with care and backed up regularly.

STARTING THE LIST

First, consider whether your program collects names and addresses for procedure-specific patients. Many group practices are at the whim of an administrator who may not care to do this, despite the fact that this is important for revenue production for the overall practice. Some programs may be so old that there is no easy method of gathering procedure-specific data. If this is the case, you may need to manually gather data, which is much less optimal, but still very necessary. Other programs may have the data, but not in a form that permits easy collection or transfer. If this is the case, the help desk at your practice management program may be aware of simple ways to gain access.

In the best-case scenario, a good method will be available that gathers this information, which you can access and massage. If so, you must tie an email address to the individuals and begin marketing to the patient. You must also consider just how the email will be sent (from whom and to whom responses will go) and whether email is approved for outbound solicitations. This may further involve some work on the privacy policy given to all patients with their HIPAA forms.

Once all of this has been accomplished, you can determine whether your campaign can proceed via email or will have to go via “snail mail,” and finally you can start your data collection process.

SEGMENTING LISTS

My practice has generated several lists of patients, but the basic division includes liposuction, botulinum toxins, laser procedures, tattoo procedures, fillers, and spa procedures. Additionally, we keep track of those individuals who have purchased products (Get Dr.Schlessinger’s tips for successful dispensing at DermTube.com: http://dermtube.com/ video/selling-skin-care-in-your-practice/).

Based on review of our data, we develop specials each month for one or two procedures and then email or mail appropriate offers. I should note that while traditional mail is expensive, in the right circumstances it is infinitely less expensive than a Groupon offer or other advertising, such as newspaper or radio ads, etc. Generally, however, we opt for email if and when possible, and the response has been outstanding.

The key point to emphasize is that we know which patients have elected certain procedures and can readily access the names, addresses, and email addresses (if provided) of these individuals. One benefit of our recent implementation of an electronic medical records (EMR) system has been the grudging acceptance by our patient population of the necessity for our having their email addresses. We use a portal for registration that must go to their email address, which has led to better email address data with fewer old or defunct email addresses. Most of our cosmetic patients have an email address. Those who don’t are occasionally mailed a special offer. Our patients are told that notification of special offers is one benefit of allowing us access to their emails.

For procedures that are expected to be repeated in a timely manner, such as neurotoxins or fillers, a follow-up program may be available from your practice management company. It may already be in use for follow-up issues with skin cancer patients and normal follow-ups, without major need for adaptation for cosmetic patients. If that is the case, all that needs to be done is to set up a time for reminders and develop an automated note. Alternatively, if you have a cosmetic coordinator or point person who manages the cosmetic patients, her or his time can be devoted to follow-ups on days that you may be on vaca- tion or if you have any regular time off during the week. Our cosmetic coordinators call, write, or email patients regularly.

Certain procedures—such as laser and liposuction, or botulinum toxins and fillers—lend themselves to packages and cross selling, while other procedures—like laser hair removal—may be less suitable for cross selling but could benefit from other incentives. Leg vein patients and others may be more popular during a particular season, and this can be recognized by the backward-trending and forward-looking revenues based on the previous year. All these steps can be taken once data is collected, analyzed, and put in an accessible format for the practice to use for marketing purposes.

USING DATA WISELY

We send one email a month to our cosmetic patients and generally send no more than two or three print pieces a year. Calls are made as well, but limited, given the irritation factor of a phone call.

The most important part of this entire marketing activity is to base it upon expected results and incorporate previous data on revenues into the marketing plan. For example, if you know that a certain month was your best month ever for neurotoxins, you may want to choose that month to package a filler and neurotoxin special to add revenue. Conversely, if liposuction has poor months in the summer, that may be the time to consider a marketing special or a bonus for that procedure. Again, without knowing your expected revenue, none of this can happen.

Another benefit of good data is that, if you see decreased revenues for a specific procedure, it can be the rationale for investigating whether there is a change in how a procedure is being done, in your competition, or whether issues exist with a staff member or your technique. Or you may find that this is simply a reflection of a promotion that was done the year previously (by a company or you) and not “anniversar-ied.” With data in hand, you can formulate a plan of action to address the problem.

MANAGING OPT OUTS

Some patients will choose to opt out of any marketing by the practice. This doesn’t mean that they are unhappy with you, necessarily, but I always check the charts when a patient asks to be removed from the marketing efforts. Occasionally, I will have our cosmetic coordinators reach out and see if an issue exists with their previous treatments. This has resulted in us being able to reach out to keep patients who were unhappy and subsequently appreciated our concern.

Finally, it is important to take an individual off your list if and when he or she asks to be taken off and to have a simple mechanism for accomplishing such action. Otherwise, you may be liable for HIPAA violations and SPAM violations. Additionally, it is important to make sure that your entire program is HIPAA compliant and to seek appropriate counsel on any particular situation that occurs.

CONCLUSION

When you have the ability to analyze and take action on your cosmetic (and medical) revenues, especially with accessible past-year data, your future revenues will benefit. This is something that is true across all practices, large and small.

Joel Schlessinger, MD is Founder and Course Director of Cosmetic Surgery Forum. He practices in Omaha, NE. The 2013 Cosmetic Surgery Forum will be held from December 5-7 at the ARIA Resort & Casino in Las Vegas, NV. For more information and to register, visit www.CosmeticSurgeryForum.com. Contact Dr. Schlessinger at JS@CosmeticSurgeryForum.com.