As mentioned earlier, agencies have little savings from growth and scale. In fact, as an agency matures and takes on larger contracts, there might be increased costs with usage reports (such as data for a hospital's Joint Commission compliance), mandatory on-call services, HIPAA and HITECH-compliant email and software, being open on holidays and weekends, and more.
P.S., Did you know that having medical information, such as Medical Record numbers, or patient birthdates on your email account is almost always a HIPAA violation?
Additionally, as agencies grow, the need for more accounts receivable staff, human resources, and operations staff increase. Interpreting is unique in some ways where the clients do not come to the agency's offices for services, the interpreters travel between locations, and the services are always provided onsite, except for Video Relay Services and Video Remote Interpreting.
At one point in my career, one agency was spending over $60,000.00 a year on reporting, utilization, and paperwork compliance for customers.
Large customers do not equal large profits. In fact, a majority of an agencies' profit margin (not gross revenue) come from smaller customers that typically operate on a service agreement and not through a large contract or RFP solicitation. Rule of thumb: do not let any one customer take up more than 1/3 of your business. It's just too risky. I had a colleague whose business went bankrupt when their largest client could not pay an invoice.
Economies of scale do benefit an agency when it comes to their scheduling, accounting software, and telecommunications costs. While most cloud-based accounting programs are specifically not HIPAA-compliant, some on-premises programs are compliant. VOIP phone systems and online call center programs to handle incoming requests can drive down these technology expenses to less than one dollar per billable hour.
One other major benefit that agencies do experience from scaling is improved cash flow. While many customers will end up over 90 days late (for most contracts, this would mean at least 120 days after the date of service), the consistent influx of receivables (payments) helps to "float" the customers that take months, or even years, to pay up for a request. When a small agency has significant Accounts Receivable issues, it can put a company into bankruptcy. When a larger agency experiences AR challenges, it's more likely to result in a charge off, a contract termination, or a Plan of Corrective Action. In other words, you have more of a safety net.
View previous posts in this series:
Interpreters must become familiar with the Joint Commission. This agency is one of the largest drivers of hospitals and their utilization of interpreting services. This is even more true for spoken language services. ↩︎
If you use an end-to-end encrypted email provider, such as ProtonMail and have a password protected computer and a passcode on your mobile phone, you are in much better shape. Future HIPAA-compliance articles for interpreters are on the way. ↩︎