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Dispensing corporate cell phones may be a given in your practice, but don’t fall into a money trap.
These days, cell phones are often just as much a standard issue for new physicians as are new pagers and new on-call schedules. So when issuing this equipment, it’s important to consistently spell out your expectations for its use. Setting some ground rules can help you avoid unexpected costs and unpleasantness when the bills come due. Unfortunately, many practices don’t think such “small perks” can cause much trouble.
Stealth costs, sneaky charges, and slick salespeople
Cell phones companies are notorious for promulgating misleading promotional material when it comes to pricing. How many of us have seen the $29.99 per month deal advertised on company billboards or from slick salespeople at the local mall, only to get our first bill containing overage charges, unexplained taxes, and dubious fees that quickly make that $29.99 bill a distant fantasy? It’s important to recognize that cell phone companies often conspire to make their costs substantial, so “buyer beware” should be your first rule of thumb.
For example, at the cost of only $40 per month, per phone, an eight-physician practice that also provides cell phones to its two administrative staffers can easily amass $4,800 in annual cell phone costs. Sprinkle in a couple bills containing roaming charges incurred when two physicians were out of town attending CME programs, and you’ve suddenly exceeded $5,000 in annual costs. That’s a serious chunk of change for such a small “perk.”
So agree to a set of simple rules upfront, make everyone aware of them, and stick to them. Everyone will feel treated fairly, and it will be easier to be consistent and evenhanded when handling problems that may arise with this expense.
1. Set a standard cost limit on phone hardware, and require anyone wishing to buy a more expensive model to pay for the difference out of pocket. If a physician in your group insists on the latest $500 “cutting edge” phone, and your practice has set a $100 hardware limit, then tell the doctor upfront that he’ll need to pony up the $400 difference or must settle for an existing handset. You’ll be surprised how well this argument holds up with reasonable physicians who appreciate fair play.
2. Establish rules for personal use. While some practices allow unlimited personal use of corporate-owned cell phones, you’ll have to decide what’s best for your business. If you choose to allow company phones to be used for personal use, be specific. Does that include loaning the phone to your spouse or child for a weekend trip? Clearing up those issues beforehand can avoid misunderstandings later on. Also be sure to touch base with your accountant to see if there are any potential legal ramifications for your business regarding the personal use of cell phones.
3. Proactively control overage costs. If you don’t have unlimited usage plans, then make your staff abundantly aware of the number of minutes available to them per month. Ask your salesperson if they allow “minute pooling,” which allows minutes that go unused by one person on your account to be used by others on your account, reducing the risk of incurring overage costs.
4. Prepare for breakage. I once worked in a practice in which a technophile physician was so angry that our company policy would not upgrade him to the latest version of a cell phone, he maliciously slammed his existing phone in a car door to destroy it. Much to his chagrin, our practice had bought spare “cold storage” phones of our discontinued model before they became unavailable, which we used to replace broken phones. I’ve also been handed phones that have taken a dip in the Atlantic Ocean and were fished out of toilets. Accept the fact that damage will occur and then weigh the pros and cons of purchasing insurance. Also ask your sales reps if they will sell you “cold storage” phones as spares.
5. Diversify your options. “Data plans” - the term cell phone vendors use to refer to packages that offer e-mail and Internet usage - are not considered desirable by every physician. Some physicians live and die by their e-mail-connected devices, while others keep it simple, only turning their phones on to return pages. To keep things fair, consider working out “a la carte” pricing, allowing physicians who wish to pay a premium for a data plan to have that option. As a side note, be sure to ask about text messaging rates as well.
6. Establish “travel rules.” In all cases, but especially if your cell carrier is a regional one, you must establish a policy that requires all physicians to notify your practice before taking their corporate phones on business trips or personal vacations where they might incur roaming charges. In some cases, it may be cheaper to purchase a one-month, prepaid phone from a national carrier. When traveling abroad, users should consult their carriers plenty of time before their trip to determine if their phones will even work in their destination country and what charges will be incurred. (International travel is rarely covered by standard phone plans.) You may be better off using a reputable international cell phone rental company.
7. Leverage your buying power. Allowing individual physicians to go out and purchase the phones and plans of their choice and then individually reimbursing them will add to your accounting headaches and throw away any group buying power you may have. While the kid at the mall’s cell phone kiosk will tell you they don’t give discounts, don’t believe him.
Contact three carriers and ask for a business sales representative. Ask each one to provide you with a two-day loaner phone to try out, and determine for yourself what coverage you have in your area. Then ask each vendor still in the running for a written bid for the number of phones you desire for one-, two-, and three-year contract terms. (Some vendors will balk at a short contract, but try to push for it.) Ask your potential carriers to calculate all costs incurred for using their phones, including taxes, fees, and detailed billing charges.
Following these simple steps can save you money and avoid unnecessary unpleasantness regarding your company’s cell phone solution.
Jonathan McCallister has worked in healthcare IT management for more than eight years and in general IT management for more than a decade. He can be reached via firstname.lastname@example.org.
This article originally appeared in the June 2008 issue of Physicians Practice.