There are many things that can affect a medical practice's profits. External factors, such as the economy or changing demographics, can be beyond one's control. However, many proven business practices can help you increase your bottom line.
Money Matters
One of the simplest ways to monitor your financial health is to use a budget. You can create a basic budget by simply checking the previous 12-month financial statement and setting goals for revenue and expenses. Be sure you include each line item in your budget, including physician compensation.
The easiest way to increase your revenue is to collect for services that you have already provided. Monitor your outstanding receivables based on date of service, not date of billing, and send account statements out monthly to any patient with an outstanding balance. Follow up on all insurance denials for legitimacy.
Another simple method for adding to your top line (and bottom line) is to make sure you are utilizing the correct CPT code for your procedures. Mistakes here can result in substantial revenue loss. However, you must make sure that you are billing appropriately for the level of service provided. Often, having an outside service perform a chart audit can provide you with peace of mind that you are both utilizing the most appropriate codes and not leaving any revenue on the table. .
Refinancing loans and credit lines can frequently reduce your cash outlay and increase your bottom line. Your CPA and banker can advise you of the optimal way to lower your interest rate or change your payout term.
Another way to reduce your overhead costs is to analyze your current equipment in conjunction with repairs and maintenance costs. Are you spending more on maintenance than it would cost to simply replace the equipment? Additionally, it makes sense to consider alternatives such as leasing and maintenance contracts while looking at these items together.
Personnel Costs
Is every person on your staff vital in achieving practice goals? Do you have the right mix of professional, semi-professional and administrative staff? Look at each position objectively and then ask yourself how the position is helping patients or controlling costs.
Employee benefits are one of the largest expenses to a medical practice. You should review the health insurance coverage you are providing your employees every year. There are many ways to reduce health insurance costs which are both common in the market place and expected by employees. Some of these options include: Increasing deductibles, adding a Flexible Spending Account (FSA) or a Health Savings Account (HSA), instituting a waiting period for new employees, covering only full-time employees and allocating an annual fixed-dollar contribution to employees for medical plans.
The same should be done for any life or disability insurance that you provide as well.
An insurance broker is your best resource for these services, especially considering the potential costs and penalties that you could incur with the implementation of the Affordable Care Act.
Diligence Toward the Process
Once you implement the steps noted above, it is important to both monitor your progress and evaluate the results. As we approach a new year, it is an opportunity to start the next year off on the right foot.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
