A medical practice is a business and trying to reduce medical practice operating costs can be a challenge at times. With the ever-increasing changes in government and reimbursements, it’s surprising just how many physician practices haven’t invested the time to explore opportunities to decrease overhead and operating costs. Keeping tabs on the operating costs can often seem essential to keeping the doors open.
“Know what it costs you to run the business. Know why those costs are essential, or at least important”
Medical office expenses deserve more attention as potential sources of net income than they usually get, because operating expenses are substantial and the practice has more direct control over costs than revenue. The key for a doctor to reduce medical practice operating costs is to be aware of the expenses of the medical practice.
Here are three steps to reduce medical practice operating costs and increase revenue in your practice:
- Know your cost for reimbursement: If you take a look at inconsistent payers, you can streamline them to improve your bottom line. Many doctors don’t consider that their reimbursement methods may actually be costing them money. An actionable picture of current costs requires a thoughtfully constructed chart of accounts that groups expenditures logically at a reasonable level of detail. Consult your team and ask if they feel they are putting more time and effort into billing than before.
This task can be delegated to an employee or a bookkeeper, but someone must do it faithfully. If your current reimbursement model is costing you too much of your profit, consider a new reimbursement model can an alternative.
2. Identify an account to look into closely: Start with the account that meets both of the following criteria:
- The account represents the biggest expenditure that meets the first criteria and you have not already looked into it.
- You can change your sourcing of the product or service within three to six months.
Since the criteria are simple, this task can be retained by the physician or easily delegated.
- Renegotiate Vendor Expenses: If you have used the same equipment and medical supplies vendors for a long time, there is a good chance you could find a better deal by shopping around. Some can provide repair, training and troubleshooting for equipment. Your relationships with your medical suppliers and vendors are important, so it’s not a matter of trying to nickel and dime them. But there is nothing wrong with getting quotes from other medical vendors, and checking they are providing top value.
“The ability to reduce medical practice operating costs is essential to the long term success of your business. The more money you keep, the better you are able to fund your own lifestyle. You can also reward the team that works hard for you. It is essential to keep your finger on the pulse of expenses”.
Are you ready to reduce your medical practice. Take a look at our pricing cost