Changing Your Medical Practice’s Bottom Line
The answer to changing your medical practice’s bottom line should be obvious… increase revenue and decrease expenses; however, this can be easier said than done. This article addresses a few examples regarding increasing revenue and decreasing expenses.
According to a Healthcare Finance News survey conducted in late 2016, 69% of the physicians’ respondents stated they had concerns regarding cash flow and reimbursements in 2017, and 71% of the respondents stated they were concerned about getting their claims paid in a timely manner.
Concordis Practice Management, LLC, a San Antonio based medical practice management company, suggests the first place to start your review of income and expenses is the medical practice’s budget. Compare the projected income and expenses to the actual income and expenses, and then adjust the projected amounts at the end of each quarter. Next, review the fixed and variable expenses. Are there any expenses that can be renegotiated, such as rent, office equipment leases, and practice management system fees? If you don’t have a budget for the practice, Concordis recommends that your Practice Manager create a budget immediately to help the practice monitor income and expenses.
The Practice Manager should periodically review staffing requirements to support the patient and administrative workload, as well as the correct staffing mix. As an example, does a clinic need an RN on staff if the services provided at the practice do not require an RN’s scope of work? Are their certain work functions that can be outsourced to decrease staff costs, to include benefits? As an example, could your billing be outsourced to a billing company?
Another area to review is medical supply ordering. Does your staff place an automatic order without verifying the amount of medical supplies in stock? Have your staff complete an inventory of medical supplies to determine how much of the product is on-hand, and then determine the supplies that need to be restocked. If you have any expired products, have you talked with your medical supplies vendor about a credit? Can you order medical supplies through a group purchasing organization associated with your medical supply vendor?
When did an employee leave your practice due to resignation or termination? Did you review the invoice for medical, dental, and vision insurance premiums to ensure you are not still paying for that employee? You may be surprised how often this is overlooked when an employee leaves the practice, and the practice continues to pay the premium for months unnoticed. Contact your employee benefit broker immediately when you notice you are still paying premiums for an employee who is no longer with your practice.
Let’s discuss ways to increase revenue, other than having the physician work longer hours. Are there any days of the week the physician is out of the office that you can sub-lease the office to another physician? This may be a great opportunity for a surgical practice where the physician is in surgery several days each week. Perhaps consider sub-leasing the office to a physician who could be a great referral source for your practice. As an example, a family practice or internal medicine physician would be a great referral source for a dermatologist or endocrinologist. Be sure to check with your healthcare attorney to ensure Stark Laws are not violated with any sub-lease agreement.
Next, review your A/R Aging Report at least monthly for patient responsibility accounts in the 61+ day buckets. What has your staff done to collect on these outstanding account balances? Does the staff ask a patient about payment on outstanding account balances when the patient calls to schedule an appointment? What is the practice’s policy regarding scheduling appointments for past-due accounts?
Are you using your Advanced Practitioner Providers in the most cost-effective manner to maximize the number of patients scheduled and payment? While most third-party insurance payers reduce payment for the Advanced Practitioner Providers, the loss of revenue may be more efficient in a busy practice when more patients can be seen.
This blog addresses the ‘tip of the iceberg’. Concordis Practice Management, LLC can assist your practice with an Operational Assessment to review your revenue and expenses.. Contact Concordis at 210-704-1014 to schedule a consultation, or visit www.concordispm.com for more information regarding the services we provide.