Thinking About Starting a Solo Practice or Small Group Practice?
The challenges facing smaller medical practices in regards to financial stability can be significant. A solo or small group practice can lack the ability to combat rising operational costs, such as increasing rent, personnel costs and decreasing revenue to maintain steadiness without assistance.
It is essential for physicians and medical practice managers to acknowledge the aforementioned difficulties, and be prepared to make tough decisions regarding reducing expenses to succeed as a small medical practice. Efficiency and accuracy are the keys to increasing revenue. We have identified some common issues smaller medical practices should consider.
Operational Costs and Staff Expenditures
Total staff costs, which include the physicians, non-physician providers and support staff, can represent over 85% of the total practice costs in multispecialty practices. Since so much of a practice’s budget is allocated to staffing, it is important to ensure you have the “right” staff and staffing mix, and keep a watch on how many full-time equivalents (FTEs) the practice has per physician. The remaining overhead costs are approximately 15% of the practice’s budget, which includes the office rent or mortgage payment, medical and non-medical supplies, and ancillary costs. In fact, more than 84% of physicians surveyed in 2014 by Medical Economics Physician Practice said their practices are doing the same or worse financially than a year ago.
Electronic Health Records
Most established medical practices have already purchased electronic health records (HER); however, if you are starting a new practice or considering changing HER, this is a major expense. The Office of the National Coordinator for Health IT reported that the cost of purchasing and installing an Electronic Health Records (EHR) system could vary from $15,000 to $70,000 per provider. Having an HER is a necessity in today’s medical practice. Consider using a website such as KLAS to assist you with your evaluation of the HER best for your specialty. Once you choose a HER, the implementation process will most likely include extra set up and maintenance costs, to include a monthly user or maintenance fee.
Practice Management System
Just as important as the EHR, the practice must decide on the best practice management system to process claims and run reports. Many EHR’s have a practice management system module; however, some specialty specific EHR’s may not have this feature. The practice management system should be able to perform tasks such as insurance eligibility verification, billing tasks, and generate reports for the physician leadership and practice manager.
How well did your practice do preparing for ICD-10? The coding gurus expect this change to lead to a significant increase in claim denials and billing errors. It may still be too soon to feel the effect of ICD-10 implementation. Denied claims and billing errors can slow your practice’s receipt of payments, thus negatively impacting your bottom-line.
Concordis can help your practice wade through the unfamiliar new coding regulations by providing a coding review of your medical records. Concordis has certified coders on staff who are very proficient with the ICD-10 coding requirements. The objective of the review is to identify claims that have been under-coded, over-coded, lack insufficient documentation, denied and down-coded services. We can also provide training for your providers to enhance their medical records documentation.
Many new physician practices may feel a need to participate with every government and commercial insurance plan available; however, the practice should ensure they do not have a disproportionate share of any single insurance payer. Some questions to consider include: (1) Should the practice participate in Medicare or Medicaid? (2) Is the insurance payer willing to negotiate the payment, or is a “take or leave it” offer? (3) Should the practice participate in the Affordable Care Act health care exchange plans? (4) Should the practice participate in the State’s worker compensation plans? Concordis recommends you do your research before signing on the dotted line.
Tactics To Increase Revenue
Increasing revenue is still feasible in a smaller practice, but it does require some awareness and action on the part of the medical practice physician leadership and medical practice managers. Necessary strategies could include better use of non-physician providers, contacting your commercial insurance payers for an increase in reimbursement, expanding hours to increase productivity by providing greater convenience to patients and leveraging technology to reduce inefficiencies and time waste.
Concordis offers many services, such as practice start-up, medical billing and coding, management consultation, staff training and development and fraud risk assessment to ensure that your practice succeeds, no matter its size.
The challenges in the medical field are many, but Concordis Practice Management is dedicated to helping medial practices overcome operational obstacles.