March 5, 2007

Competing With the Big Guys
By Robbi Hess
For The Record
Vol. 19 No. 5 P. 24

In a crowded field, smaller MTSO owners are finding a niche through personalized service and old-fashioned hard work. However, potential snags are waiting to foil their plans.

Whether they boast two dozen, 200, or even more employees, owners of smaller medical transcription service organizations (MTSOs) believe they are not only surviving but thriving—even in the face of some imposing competition.

Setting Themselves Apart
Laurie Spangler, CMT, president of DataKey MT, Inc., says that it is sometimes difficult for the smaller MTSOs to prosper, but offering one-on-one service to their clients helps them overcome that hurdle.

“When companies get larger, they lose that personal touch and we haven’t,” she says. “We make sure that our quality is top-notch.”

Kelly J. Pletcher, owner and operator of DocuScript, LLC, has been in the business for 20 years and knows about surviving and prospering. She currently has 20 employees and is looking to expand in the next several months.

“The key to success is customer service—the clients, whether the office manager or the physician, know they can reach me almost any time of the day or night,” says Pletcher. “If they have a specific document that needs to be transcribed, we can get it done immediately. All of the doctors within my client base know I can guarantee this service.”

Being small enough to think outside the box, offering unique services, and treating every customer as a top priority is what Pletcher believes sets the small MTSOs apart.

“I send gift baskets to my clients with a business card during the holidays to make sure they know they matter and are important,” she says. “At the end of the day, it’s the personal touch that counts.”

Rewarding clients for referrals to other physicians is also standard operating procedure for Pletcher.

In any business, however, glitches or computer crashes are likely and Pletcher says the best way to address them is head on. “If there is going to be an interruption in turnaround time, no matter the cause, I pick up the phone and let them [the clients] know the situation,” she says.

Susan Lucci, RHIT, CMT, FAAMT, director of transcription operations for Transcription Relief Services, LLC, agrees that personalized service and special attention set smaller MTSOs apart from the competition.

“In a smaller MTSO setting, you might be able to cater to some idiosyncrasies more than you could in a larger facility setting,” she explains. “There is sometimes more of a streamlined feeling with being able to get in touch with the person you need to in order to get things done. It’s more ‘friendly.’ You develop relationships with the person at the facility and if they are looking for information on a specific report or are looking for insight into a particular trend, you might be able to offer them a resolution more quickly.”

Differentiating oneself in the market and showing potential clients what makes your company a better fit is one way to set yourself apart. “If a hospital does a lot of general surgery or OB [obstetrics], then knowing that your MTs [medical transcriptionists] have the skills to fulfill that niche is a selling point,” Lucci explains. “A smaller MTSO just might be able to provide a more specialized, tailored transcription service.”

Attracting High-Quality MTs
As a way to entice MTs, Spangler says her company, which currently employs 50 MTs, offers a mentoring program.

While costly, a mentoring program is a way to offer a benefit to potential MTs that sets Spangler’s business apart from the “big boys.”

Healthcare insurance and other employee perks are lures that sometimes need to be tossed out by both large and small employers to draw in the best and brightest MTs. For larger companies, the costs can be spread over a larger employee base, making the costs easier to swallow. On the other hand, smaller MTSO owners sometimes have to dig deep to deliver these benefits.

“It’s not easy to find affordable healthcare, but in order to entice and retain employees, you simply have to offer benefits,” Spangler says.

The Bottom Line
When it comes to costs, small MTSO owners agree they can’t compete with the offshore transcription pricing structure.

“When a physician sees nine cents a line and I am charging more than that, they sometimes don’t look beyond that dollar figure,” Spangler says. “If something appears too good to be true—price-wise—it probably is and you always get what you pay for.”

When asked what changes, if any, in the industry would be beneficial, Spangler says standardization of forms used in both hospital and private practice settings would offer a quality control mechanism by which all MTSOs could be measured.

Making ends meet may not always be easy, but Pletcher cautions that you don’t want to be the “cheapest game” in town.

“If a client comes to you and says ‘I can get this done cheaper at XYZ,’ I will tell them up front, you will probably find lower bids than mine, but honestly, you will probably regret making that decision based on a penny or two,” she says. “I am extremely open and honest with clients on exactly what my overhead and expenses are. I have to pass them along to the client. They understand that this is the bottom line and that there are HIPAA compliance issues, technology that needs upgrading, payroll that needs to be met.”

Lucci says the bottom line always has to be about patient care.

“If we can partner with client hospitals and get them templates and have what they need for documentation, there is more time freed up for the physician to spend with the patient and less time spent in the dictation room,” she reasons.

Lucci says the utilization of normals—normal, repetitive procedures—to the fullest extent would save MTs and dictators time and ultimately control costs.

“If good information was captured up front and with having standardized input and templates in addition to top-quality voice and clarity, we could turn transcription around in minutes rather than hours and having that information back to the physicians would improve patient care and that is the bottom line in everything we do,” she says.

Small Business Pitfalls
Sometimes, being unable to interface with a potential clients’ platform can cause a small MTSO to lose a contract.

“There was a time I bought new technology that I thought would work, but it didn’t quite do what it purported and we lost a big contract because another company could come in and interface when the software I purchased was supposed to allow us to interface,” Spangler explains.

Offering services around the clock is something MTSO owners have found they need to do to compete. “We’ve added an 11 pm-to-7 am shift and finding employees to staff that time frame was a bit difficult, but we had to do it to ensure quick turnaround,” Spangler says.

As the business owner, Pletcher says it is up to her to supply the training to her employees and to keep abreast of the quality assurance in transcription. She has developed a system within her company that has a leader in charge of several of the MTs and the leaders ultimately report to her.

“If I didn’t have the leaders, I wouldn’t have a life. The business owner simply can’t do it all; you have to delegate,” she says. “My team knows that I cannot do it without them, and in turn, they know that without me at the helm bringing in the business, they wouldn’t have a job to do. It truly is a team effort.”

Scott Faulkner, CEO of InterFix Ventures, LLC, who is immediate past president of the Medical Transcription Industry Association (MTIA), says people getting into the business make the rookie error of undercharging for the valuable work they do.

“They undercut the competition and work until they starve to death and then wonder why a larger company comes in and beats them,” he says.

Dave Woodrow, president and chief operating officer of Healthcare SPi, one of the larger transcription companies, stresses that you can’t always undercut the competition.

“An MTSO owner needs education and common sense. It’s not only the offshore companies that take work away from the MTSOs, it’s when the business owner thinks they will go to a hospital, charge a low price to get in the door, then go down the street and charge the second hospital more money to make up for the lowball price at the first,” Woodrow says. “The problem is, the second hospital will likely call the first to discuss not only service, but price, and once you have thrown out a benchmark price it’s difficult to raise it without fear of losing the contract.”

Education in everything from technology platforms to collection of state and federal taxes is key to MTSOs’ survival, Woodrow and Faulkner agree.

“Another sleeper issue is the advent of Internet technologies in that it allows small business people to hire employees across the country. The overhead that comes with interstate employment law mandates is something the average small business owner doesn’t consider,” Faulkner says.

In addition to employment issues, there are infrastructure concerns. “When you are starting out, you don’t have the infrastructure to support the business, so you utilize the hospital’s platform then you take on a second hospital and they are using a separate platform, etc. Eventually, you will need your own platform and that is a cost that many MTSO owners don’t figure into their expenses and overhead,” says Faulkner.

Another pitfall, according to Woodrow, is that it’s unnatural for a small business owner to say “no” to a customer.

“They want to offer a mom-and-pop service, but you can only do so much for your customers and if you keep saying ‘yes,’ one day you will wake up and find yourself in a situation in which you simply can’t deliver,” he notes. “You never want to overpromise because it comes out of the bottom line.”

Woodrow reasons that if an MTSO is doing its job, clients shouldn’t need it to be available 24/7 to answer questions.

“Every business owner needs to perform a SWOT [strengths, weaknesses, opportunities, and threats] assessment. Remember that strengths employed improperly become weaknesses and opportunities not taken advantage of or approached properly become a threat,” he explains.

What’s MTIA Got to Do With It?
Spangler points to the benefits of MTIA, which “help[s] the small business owner by supplying us with information on emerging technologies, [and] offering a conference where other MTSO owners can gather and interact. It’s a chance to rejuvenate yourself, see if you are on the same page with other small business owners or if you might have to veer a bit off the path you’ve been following.”

The chance to network at a MTIA conference is crucial, according to Pletcher. Lucci says MTIA and other professional associations must be viewed as a resource.

“Your professional associations are where you go for knowledge and to keep up on what’s happening in the industry or for insight into upcoming legislation. You get out of professional associations what you put into them,” she says. “If you go to an association hoping to learn something or meet new people and network, you take something away.”

Lucci says that even if you can’t always afford “the latest and greatest,” it’s at least good to know what’s out there and what your competition may be using.

Faulkner says MTIA offers a lot for small to medium-sized MTSOs, especially at its annual conference.

“The focus at our conference is imparting huge amounts of education,” he says. “I can’t remember a single year we didn’t obsess over finding experts to teach on how to help the small-to-medium operations.”

Woodrow says there is a day of conference tracts specifically geared toward the smaller MTSOs. “I would feel safe in saying you could go to a MTIA conference and get thousands of dollars in free consultation—you get to hear from experts that a small business simply wouldn’t be able to afford,” he notes.

Faulkner says the ultimate goal of MTIA is to make the industry better and to accomplish that, it needs to be profitable for the MTSO.

“An MT might decide to strike out on their own and they know all the ins and outs of transcription but not all the intricacies of running a small business and making it profitable,” he says. “The point that brought them to business ownership may not carry them to the next level of profitability. It’s our hope that through MTIA’s efforts that we are able to elevate the game.”

Advocacy is something MTIA promotes for the MTSOs. “Most people [outside of the industry] don’t have a grasp on how their medical records are produced,” Faulkner says.

Woodrow says MTIA explains the ins and outs of the HIPAA rules and regulations and helps small MTSO owners make certain they are adhering to best practices.

“Privacy and security are crucial; many MTs are working from home, all over the country, and a lot of the privacy regulations are at odds with the workforce,” he says. “Have the MTSO owners visited the homes where the MTs are working? What are the privacy aspects of the home office? Who has access to the computer database or the files?”

Whether an MTSO is large or small, Woodrow says, “we all share the same issues and one of those is educating the customer and if you are looking to get into the business, you need to think about more than just the line-by-line transcription aspect of it.”

— Robbi Hess, a journalist for more than 20 years, is a writer/editor for a weekly newspaper and a monthly business magazine in western New York.