There are many things that can affect a medical practice’s revenues. External factors, such as the economy or changing demographics, can be beyond one’s control. But there are still ways that a practice can boost its revenues. It starts with proven business practices.
Create a basic budget by simply checking the previous 12-month financial statement and setting goals for revenue and expenses. Make sure you include each line item and physician compensation in your budget.
Next, examine billing and collections. Ensure that outstanding receivables are less than 60 days old, based on date of service, not date of billing, and verify all insurance denials for legitimacy. Also audit all practice procedures to determine which CPT codes are used most often. Make sure you’re billing appropriately, using proper coding and charting, for your most commonly used CPT codes. Mistakes here can result in substantial revenue loss.
On the expense side, review loans and credit lines. Work with your financial advisor to help you determine how you can best lower your interest rate or change your payout term.
Review all expenses, such as maintenance and service contracts. Take a good look at your repair and maintenance costs for any older computers, printers, copiers and phones. Buying new equipment might be a lot less costly in the long run. And, in some cases, you may be able to do without service contracts altogether.
Is every person on your staff vital in achieving practice goals? Look at each position objectively and then ask yourself how the position is helping patients or controlling costs.
Also review the health insurance coverage you’re providing your employees. There are many ways to reduce insurance costs. Options include increasing deductibles, instituting a waiting period for new employees, covering only full-time employees and allocating an annual fixed-dollar contribution to employees for medical plans. However, be aware of your obligations under the Affordable Care Act for the provision and amount of coverage as you investigate these opportunities.
If you haven’t done so already, consider adding a Flexible Spending Account (FSA) or a Health Savings Account (HSA) to the benefits you’re currently offering. And if you provide life and disability insurance, review that as well. As you know, insurance costs will vary by carrier. That means you need to review your policies annually for necessity and cost. Make sure you put your entire insurance package out for bids every year.
Develop a marketing plan for new and existing patients. Earmark somewhere between 2% to 4% of your practice’s total revenue to marketing. How this is allocated will depend on your specific needs.
Marketing your practice starts with outlining the distinctive features of the medical treatment experience that a patient can expect if he or she chooses to visit your office. Next, you need to develop a message that succinctly summarizes that outline for current patients and prospects. Your marketing plan should ultimately help your practice achieve its long-term goals, whether they’re to increase revenues, expand its geographic service area, explore new market segments or undertake any other strategic objective.
Sometimes marketing can be as simple as a phone call. For example, in slow periods, ask your staff to call patients who haven’t been seen in the last 12 to 18 months to come in for wellness visits. Doing so may help you fill open slots in the schedule.
Diligence toward the process
Once you implement the steps noted above, be diligent at improving the steps of every process. Contact Holbrook & Manter today for assistance. We can help you develop a sound plan to ensure your practice not only stays afloat, but sails ahead.