Eight Exercises for a Healthy Practice
Conventional wisdom suggests that healthcare is “recession-proof,” yet medical practices are as susceptible to economic cycles as other small businesses. There are ways, however, to maintain the health of your practice in light of declining revenues, growing accounts receivable, and tighter cash flows within the practice.
The following eight tips may help you improve the health of your bottom line by increasing revenue and reducing costs in today’s challenging healthcare environment.
1. Exercise Healthy Coding Practices
Compliance is a very strong force in the healthcare industry today. Upon evaluation of medical records, it is common to find that many providers are under-coding for their services. Whether under-coding is due to fear of an audit or lack of education, a coding and billing evaluation should be performed at least annually. And remember, EMR systems are not infallible. It is the provider who is ultimately responsible for the codes used. It is imperative that providers are documenting services according to documentation standards. An annual coding evaluation helps to ensure that all charges are captured and alleviates the tendency to leave money on the table that is rightfully yours.
2. Keep an Eye on Cash Collections
Account aging and bad patient debts may increase during a downturn. For this reason, pay close attention to collecting co-pays, co-insurance and deductibles up front, and be prepared to postpone some patient appointments to ensure that co-payments can be made on the day of service as stipulated in your insurance provider contracts. A properly-trained medical staff can politely implement these important policies while maintaining patient satisfaction.
3. Market Your Practice from the Inside Out
The best place to begin your marketing approach just may be with your existing patient base. Training your staff to greet, care for, and communicate with your patients can make a world of difference in patient retention. And, of course, patients who have a positive experience in your practice are more likely to tell others about their positive experience.
4. Add Ancillary Services
Ancillary services can provide a substantial payback to a medical practice. There is a right way, however, to approach this potential revenue stream. Carefully review your options and consider the return on investment for the space and resources required to add additional services. If done properly, ancillary services can positively contribute to your bottom line while providing greater convenience to your patients.
5. Negotiate Insurance Savings
Some medical liability companies offer discounts simply for taking a risk management course, or even for belonging to a specific professional organization. You may also reap discounts for consolidating all of your insurance with a single carrier. Shop around for the best deals that may save you thousands each year.
6. Reduce Supply Costs Through Group Purchasing
Investigate group purchasing organizations (GPOs) to achieve cost savings on office supplies, equipment or medications that you order each month. As part of a GPO, you may be eligible for 10-40% discounts on items you order every month.
7. Learn How Much Your Practice is Worth
A Certified Valuation to determine the worth of your practice is crucial, not only if a potential buyer should emerge, but in case you decide to seek a practice partner, get a divorce, become disabled, or decide to sell to a hospital or larger medical group. A Certified Valuation is an essential part of your estate plan and can help you realize your professional business goals.
8. Consider Outsourcing
For services that do not involve direct patient care, such as billing, bookkeeping, transcription, payroll, or accounting, consider an outside provider rather than a full-time employee. Outsourcing avoids high fixed expenses such as salary and benefits of employees in these areas, and it permits the expenses for these services to fluctuate along with your patient volume.
Economic recession is difficult for both patients and physicians. Knowing where and how to make changes that will not compromise patient care or your professional standards is the challenge. Why not seek the guidance and perspective of a trusted adviser who can help you navigate the challenging “business of medicine”? Consider a Practice Survey by DoctorsManagement. You can do more than just survive today’s challenges in medicine; you can position your practice to thrive in light of them!
If you have questions about this topic or any other issues around the business of medicine, contact us via email or call us at 800-635-4040.