Do you have what it takes to make it alone?
Do you have what it takes to make it alone?
Why independent practice is not for everyone
Case managers frustrated by the bureaucracy and pressure of working in the provider or payer settings often wonder how things would be if they only had the courage to strike out on their own. However, independent practice takes a unique set of skills. Before you make a dramatic career decision, you must first honestly evaluate your ability to survive on your own, experienced consultants and independent case managers told their peers at the 10th annual meeting of the Case Management Society of America (CMSA) held recently in Tampa.
"You can know everything there is to know about case management and how to manage a particular kind of case," says Larry S. Chapman, MPH, chairman and senior consultant of Summex Corporation, a health care consulting firm in Seattle. "However, if you can’t put it together and communicate it effectively, you can’t sell it. If you can’t sell it, you can’t stay in business."
Very few case managers survive in independent practice without first working for someone else, cautions Sandra Lowery, RN, BSN, CRRN, CCM, president and CEO of CCMI Associates, an independent case management and consulting firm in Francestown, NH, and national president of CMSA in Little Rock, AR. "You must have a mentor. You have to watch and listen. It will give you an opportunity to view from the inside what it takes to be successful in independent practice."
Case managers also shouldn’t attempt independent practice without the proper education, clinical experience, and certification, she notes. "Clients are looking for a minimum of a bachelor’s degree. It doesn’t necessarily have to be in a health care profession, but to succeed in independent practice, a case manager should be bachelor’s prepared. You should also keep abreast of accreditation issues."
Marlys Severson, RN, BSN, CCM, president and CEO of SCM Associates, an independent case management and credentialing firm in Bellflower, CA, and past president of CMSA, agrees. "When I started in solo practice, I went back to school for my bachelor’s degree. I meet my former partner in one of my classes. Later, she went on to earn her master’s degree. Personally, I got my own master’s degree in business from the school of hard knocks."
Getting started
There are many steps case managers must take to succeed on their own. The first is to take an honest look at the skills and knowledge they have that may be marketable, says Chapman. "You have to be able to go up to a potential client and tell your story. You have to be able to tell them, I think I can help you. This is how I think I can help you. This is how much I will charge you for that help.’"
Prior to independent practice, Chapman worked for the government. "The hardest thing I had to learn when I went out on my own was how to look a potential client in the eye and say with confidence, My fee is $200 an hour.’"
What are the skills and the steps necessary for success as an independent case manager or case management consultant? Chapman, Lowery, and Severson say the following are the keys to success they learned the hard way:
1. Assess your personality and business skills. Independent practice requires flexibility, risk taking, and strong communication skills, says Lowery. "Case managers are by nature flexible. However, in independent practice, you never know from one week to the next what you will encounter. You must be constantly flexible and resilient. Your cash flow may be up, and it might be down. Your caseload might be up, and it might be down."
Not for nine-to-fivers
Independent practice isn’t for case managers with a "nine-to-five mind set," agrees Severson. "When I first started my business, I worked from 7:30 a.m. to 5:30 p.m. Then, I came home [to] feed my family, put my children to bed, and headed out to work at another job from 10 p.m. until 6 a.m. I slept for an hour or two and began all over again. I didn’t sleep more than a few hours a night. That’s what it took to get the business started."
(To find out if you have what it takes to succeed in independent practice, take the self-assessment test, inserted in this issue.)
Chapman taught at a local university for four years to supplement the income from his consulting business. "There were a lot of dry years in the beginning. I had to teach to augment my income," he says.
2. Develop a business plan. A business plan includes a description of your business, a marketing plan, a financial management plan, and an operational management plan, says Severson. "You don’t have to develop a business plan alone. Many retired business executives will work for free to help you develop a plan. Contact retired citizens groups and the Small Business Administration for help. Don’t do this on your own," she cautions.
A business plan forces you to write down everything that will go into your business. It should answer these questions:
• What will your organizational structure be?
• Will you have employees? If so, how will you pay them?
• What are you going to sell?
• What kind of market do you want to fill?
• How will you go after that market?
• What are the biggest needs of that market?
• What is your competition?
• What is your mission statement, or how are you going to do what you do?
"You need to define your mission right upfront," she says. "Your mission statement . . . tells you what your vision, or your passion, is. It tells you why you are starting this business."
Another important part of your business plan is deciding how you will charge for your services, notes Chapman. "It’s not easy to set an appropriate rate for your services," he says. "From a business perspective, your fee is whatever the market will pay. If you charge too little, people will undervalue your services. If you charge too much, you will price yourself out of the market."
Severson says in independent case management practice it’s still possible to be paid on a fee-for-service basis. "Fee for service is a little less scary than a per-member per-month pay rate when you’re first starting out," she notes.
Focus on financing
Lowery suggests case managers considering independent practice contact independent case managers in their area and ask questions. "Check out your CMSA directory and call other case managers in independent practice. Ask them all the questions you are struggling with: What do I charge? How do I find clients?’ Network!"
Financing and financial record keeping may be the most difficult issues in independent practice, say experts. "There is a 30- to 90-day business cycle in accounts receivable," says Chapman. "You are out there doing work for people, and you might not see any money for 30 to 90 days. You must have at least six months of reserve on hand."
Severson started her business with a credit line on her house. "People start out paying everything by credit card, taking out loans on their houses or getting small business loans. You have to sit down and figure out how you’re going to get the money you need to get started," she says.
Chapman notes that many small business loans are available to women and minorities. "Go to your banker and ask what’s available. There are also banks that offer free seminars to women starting their own businesses. Take advantage of the experience of others," he suggests.
Financial record keeping can be a nightmare, but it doesn’t have to be, says Severson. "We had an accountant come in [to] set up an accounting software system and a payroll program. Now, we just give him a disk to review on a quarterly basis. He has the same software, so it’s quick and easy. If we make any mistakes, he shows us how to correct them. Then all he has to do is our taxes at the end of the year."
On a weekly basis, Severson looks at four things: her balance sheet, her income statement, her budget-to-actual numbers, and her financial projections for the week. "I want to know on a weekly basis what business came in, what I billed, and whether or not I’m on budget. I don’t make adjustments on that budget on a weekly basis, but I track it in order to make business decisions," she notes.
For example, if she projects she will make $1 million, and six months down the road she notes that she’s only made $250,000, Severson says she knows it’s time to make some business decisions. "Do I go out and drum up more business? Do I have to lay off employees? Do I have to cut expenses? In general, I never make big purchases such as new technology or office furniture until the end of the year, when I’m confident I know where I stand."
3. Develop a marketing plan. "You have to understand the market you are going after," says Severson. "Are you going after direct-to-consumer business? Are you going to employer groups? Are you marketing your services to payers, workers’ comp carriers, or risk managers?"
In her own business, Severson targets companies with 3,000 to 10,000 employees. "That’s good for me. I work in Los Angeles. It’s the small-business capital of the world. I knew that if I could figure out how to service those companies, I would have a niche."
After you’ve determined your best market, you have to figure out the best way to meet those individuals responsible for purchasing your services, Severson says. "Find out what associations they belong to and join them. It’s not enough to join; you have to be an active participant. It’s the best way to gain visibility," she says. "Cold-calling of potential clients doesn’t work. Don’t do it."
If you don’t know which associations to join, take a trip to the library and look through the encyclopedia of associations, she suggests.
As you develop a marketing plan, it also helps to analyze your own strengths and weaknesses and those of your competitors, says Severson.
"You can’t figure out what you bring to your client without knowing what your competition brings to a potential client," she says. "Take a look at your competitors’ Web sites. That’s a great way to see what they are promising their clients. And don’t be afraid to call your competitors and ask them to send you their brochure. It’s a great way to get a look at the services they offer and their pricing structure."
Find out what is going on in your market, she suggests. "Call people and ask them who they are using. Ask them what they like . . . and what they don’t like. Most important, find out the correct distribution channels. Who makes the decision about hiring you? Who will you work with in an organization? Those are the people you want to contact."
It’s also important to ask clients what they liked and didn’t like about you, says Chapman. "When I started out, I wasn’t very good at group presentations. I kept asking people what I did wrong, and how I could improve next time," he says. "You incorporate their suggestions until you’re more comfortable. I was terrified in the beginning, but I knew these types of communication skills were vital to my success."
Another part of any marketing plan is deciding how you are going to position yourself in the marketplace, says Severson. "In the credentialing side of the business, we position ourselves as the company you hire if you want it done fast and done right the first time: speed, efficiency, quality," she says. "On the case management side of the business, we are positioned as the company that matches nurses’ clinical expertise with patient diagnosis; the idea [is] that clinical experience makes a difference in moving the patient through the system efficiently."
How’s it going?
Severson and her former partner hired the best marketing person they could find when they started their business. "We had no clients, but we paid her $80,000 a year. People who knew her came to us from her. She gave us the jump start we needed," she explains. "However, it also meant that I didn’t have a salary for the first two years of the business. She stayed with us three years, and I haven’t needed a marketing person since."
One way to build your position in the marketplace is to develop sustaining partnerships with your clients, says Chapman. "I used to focus on one-shot consulting jobs. I would come in and talk and move onto the next client," he says. "Now, I realize the cost of marketing, or finding new clients, is too high. I’ve begun to work at meeting a broader range of services that have a certain sequence to them." For example, rather than just planning a health promotion program, Chapman now does the planning, implementation, and evaluation of the program. "By taking on the evaluation piece, I’m in position to help with the planning of the next cycle of the program."
Another way to build your presence in the marketplace is to partner with recognized and respected names in your area, says Chapman.
"In the beginning, your client list is frightfully small," he explains. "Think for a moment who the leaders are in your market. Contact them and ask whether you can work with them on a project and identify them as a client, so that you can build a client base. Offer them a discount in your fee scale, if you think partnering with them has the potential for growing your business."
Stay in front
Severson and Chapman also recommend that, as you start your independent practice, you remember to check back with past clients. "I routinely call people and just ask how things have been going since I was there last," says Chapman. "I say, Bring me up to speed with what has happened.’ It’s a great way to open the door to more work and to simply keep your name in front of the client."
"Calling a client and talking is marketing. Sometimes, clients get in the habit of simply using whoever’s in front of them at the time," agrees Severson. "You may have done a great job for them in the past, but they haven’t seen you in awhile, so when more work comes available they don’t think of you. Instead, they call the person they ran into yesterday. Keep yourself in front of your clients."
Another easy, inexpensive way to market yourself is to set up an e-mail distribution list of your past, current, and potential clients and send them little tidbits, says Severson. "You might find and article that is interesting about health care and send it with a little note. People are hungry for knowledge," she says.
In general, it makes sense to start small and not grow your business too quickly, says Lowery. "Start small. I’ve known too many people who started out too big and failed," she cautions. "Only allow your business to grow as you gain the necessary experience. Take risks, but take calculated risks."
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