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Running a medical practice takes hard work, dedication, and unfortunately - involves a lot of expenses. Like with any other business, it is important to be aware of all the costs you’ll be incurring for your clinic so you can plan accordingly.
There are so many operational expenses to consider when running your private medical practice that we centralized that information to be as helpful and accessible as possible!
When considering the budget, operating expenses, and the various factors that contribute to the success of your medical practice, breaking the total list into sections helps organize and prioritize tasks.
To truly maximize your revenue, certain indicators display your performance that you should be aware of before you ever see your first patient.
Doing this will allow you to keep a clear vision of the benchmarks you should be hitting so you know where you’ll need to make adjustments.
Here are some of those KPIs that you should always have on your radar:
One of the most common sources of frustration among staff in private medical practices is outdated practice management software.
The days of having to sort through dozens of filing cabinets and folders are over, and going digital is a necessity when it comes to practice management systems.
Here are some indicators that your system could use a refresh:
ICD-10 compliance is essential. 99MGMT ensures its clients are using practice management systems that are ICD-10 compliant and provide ICD-10 facts and alerts to facilitate the transition process.
Often, when looking to reduce costs in private practice, owners look toward optimizing their operational efficiency. This means refining your staff and operation processes to trim the fat and only incur costs that are necessary to run your practice.
Analyzing your patient volumes compared to the number of staff you have allows you to truly see where you could tighten up when it comes to expenses.
Using objective, reliable data and sophisticated analytics can help you make staffing decisions based on evidence and desired outcomes.
By using data to analyze incidental overtime patterns, managers can develop policies related to shifting changes and lunch coverage that reduce extra hours.
If hiring is on the horizon for your practice, make sure you’re extremely careful and efficient throughout the process, as filling a position on your team will likely cost more than just that person’s salary.
Things to consider at this time are what’s called “soft costs”, which are expenses that won’t show up on invoices but are still affecting your bottom line. These include loss of productivity as the new hire is interviewed, hired, and completes the onboarding process.
Casual applicants won’t follow through. If you still have too many applicants, ask them to complete another task. According to Physician’s Practice, about 90 percent of your applicants will drop out with each request.
The key to running a successful private practice is to know your target market and make sure that you’re operating in a way that not only attracts those individuals but also convinces them to continue coming back to your clinic.
When marketing your practice, consider the following five questions to determine whether or not your customers would be satisfied with your services
To determine the answers to these questions, it is important to collect and analyze data surrounding patient satisfaction.
Patients want a medical practice that they can trust and that provides them with the services they need, so be sure to highlight any aspects of your office that stand out as unique or valuable.
Word of mouth is a powerful tool when it comes to healthcare marketing, so if there are pain points your patients are experiencing, it is extremely valuable to collect feedback and implement changes accordingly.
The other side of that coin is ensuring that once you do make improvements in the name of patient satisfaction, you have patients provide follow-up feedback to gauge the effectiveness of changes made and see your growth.
As we mentioned in the previous section, word of mouth is a highly impactful factor when speaking in terms of healthcare marketing. So it should come as no surprise that increasing patient referrals should be one of your key goals.
To do so, consider the following tactics:
Therefore, marketing materials should make physicians seem approachable and caring. Including short videos on your practice’s website and social media outlets is one good way to do this.
Physicians can talk about why they became a doctor, what they love about practicing medicine, or pretty much anything that shows their compassionate nature.
However, there is still the ever-present concern of abiding by HIPAA laws, so while utilizing social media is a smart idea, making sure you’re using it appropriately is crucial.
While staying in constant contact with every person who has ever visited your practice isn’t exactly feasible, it is important to stay in contact with patients who haven’t visited in a while. That way you can remind them of your services and encourage them to come back!
Annual physical exams and health screenings are not always top of mind. There is no harm in providing a gentle nudge to those patients who are delaying care and reminding them to stop in again.
Additionally, if you have made improvements to your practice, this is the perfect time to share that information with the patient to highlight new strengths and factors that make your practice stand out from your competitors.
Physician-patient communication is an important factor in determining patient satisfaction, especially for new patients.
Instruct your staff to alert you of new patients so you can take that extra time to make a connection, asserting yourself and your practice as the best possible option.
According to a recent study by The Associated Press‐NORC Center for Public Affairs Research, American patients evaluate provider quality and choose their physicians based on the provider’s bedside manner and perceived ability to listen to concerns with empathy.
Clinical outcomes and other quantitative data play a smaller role in patient satisfaction than you may have previously thought.
Essentially, a practice can be one of the best in its class and still struggle to attain (and keep) patients if its practitioners are not perceived as personable - therefore, physicians may need to work on their bedside manner to further develop their people skills.
Customer Service Matters: Responding to a patient concern by saying, “I’ll find someone who can address your concern” is better than saying “I can’t help you; that’s not my job.” A sour attitude from the staff member at the front desk could be the difference between a repeat patient and a bad online review that prevents new patients from joining.
Reported Issues: Customer service problems are often related to poor use of language and to nonverbal language cues (such as avoiding eye contact). Consider coaching your staff to smile, make eye contact and say “hello” to patients, staff, and visitors alike.
Checking off the items on the Medical Practice Operating Expenses Checklist can help you maintain a better idea of how your medical practice’s finances stand. From evaluating KPIs to improving patient communication, this list provides insight into the various areas that will need attention.
Overall, implementing any of these changes will have a positive effect on your operational expenses and likely improve patient volumes as well, so initiating several (or even all of them) could be the boost you need to optimize your practice’s operations.
For a better idea of how this list can apply to your practice, reach out to the experienced staff at 99MGMT today and schedule a free consultation.
(Editor's Note: This blog was originally published in November 2020 and was updated in August 2022 to reflect up-to-date concerns and considerations.)
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