Running a medical practice takes hard work, dedication, and unfortunately - 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 own private medical practice that we centralized that information to be as helpful and accessible as possible!
Evaluate Key Performance Indicators (KPIs)
In order to truly maximize your revenue, there are certain indicators that 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:
- Verification of benefits/collection of co-‐pay should be 100%
- Pre-‐authorizations should be 100%
- Coding review and claim scrubbing should be 95% or greater.
- Clean claim submission rate should be greater than 95% (best is 98-99%).
- Denial rate should be less than 5%
- Your Adjusted Collection Rate should be 98%
- Reimbursement ratio (closed claims vs. overall claims) should be equal.
- Negotiating your fee schedule at 100% optimization.
Update Practice Management Tools
One of the most common sources of frustration among staff in private medical practices is outdated practice management software.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 the way of the future when it comes to practice management systems.
Here are some indicators that your system could use a refresh:
As of October 1, 2015, If your current system cannot handle the transition to ICD-10 codes, it will be obsolete.
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.
Billing Staff Workload
If your billing staff is overwhelmed, consider outsourcing assistance that has the resources to handle all your revenue cycle needs. Instead of trying to drive your staff to do more with less resources, consider optimizing the resources they currently have.
Immediate access to data allows you to make better decisions, improving your practice’s clinical, operational and financial performance.
With adequate reporting, you can analyze data about accounts receivable; payer performance; patient charges, payment and demographics; and quality of care/clinical outcomes.
Insufficient Customer Support
Customer support will be particularly important during the transition to ICD, so if your current vendor won’t be able to help you navigate the process, it may be time to consider finding a different one.
Workplace Management Efficiency
Often, when looking to reduce costs in a 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 absolutely necessary in order to run your practice.
Analyzing your patient volumes compared to the number of staff you have will allow you to truly see where you could use to tighten up when it comes to expenses.
Hire Based on Patient Volumes
Be sure there are enough caregivers to meet patient needs, and that the nurses and support staff have the skill sets and competencies to meet each patient’s needs. Fulfilling a nurse-to-patient ratio isn’t sufficient.
To meet different patient needs and promote patient satisfaction while containing costs, you should have staff at different skill levels.
Using objective, reliable data and sophisticated analytics can help you make staffing decisions based on evidence and outcomes.
Monitor and Cut Back on Overtime Pay
Reducing overtime is the most successful way to save on labor costs.
Be sure to pay attention to incidental—also known as incremental or creeping—overtime, accrued when employees arrive a few minutes early, work through lunch or stay a few minutes after their shift ends.
Using data to analyze incidental overtime patterns, managers can develop policies related to shift change 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, like losing productivity as the new hire is interviewed or is in training.
In addition to specifying the necessary credentials and experience, describe the personality, work ethic and appearance and manner you’re seeking. For example, you may want your front desk staff to be outgoing, cheerful and detail-‐oriented.
Describe the Ideal Candidate
Consider how the ideal candidate would respond to a few hypothetical situations. Think about current and past employees. What type of person has performed well, been happy and stayed a long time? What type of person hasn’t worked out?
Offer Perks and Benefits
Your mature, experienced candidate may not be interested in your position or may be dissatisfied with the compensation. Therefore, you may need to offer perks such as a flexible schedule, educational opportunities or discounts on care and services to entice the right people without significantly increasing your costs.
Weed Out Weaker Candidates
Contact the applicants and ask them to perform a position related task. For example, if you’re hiring a coder, have the applicants complete a short coding test.
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.
Verify Application Information
If particular credentials or other job requirements are important to you, verify that the applicant’s statements are true.
Give New Hires an Easy Out
Your new hire may discover that they have made a mistake. The sooner they acknowledge that and move on, the less time and money you will spend on the onboarding process. Your second choice may still be available.
Identify Your Competitive Edge
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
- What is our vision?
- What is our product?
- What are our strengths?
- How do we differentiate ourselves from others?
- Who composes our market?
In order 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 the services they need, so be sure to highlight any aspects of your office that stand out as unique or valuable.
- Does your practice offer expanded hours?
- Do you have a patient portal that makes it easy to schedule appointments and request prescription refills?
- How long do patients spend in your waiting room?
Word of mouth is a powerful tool when it comes to healthcare marketing, so if there are pain points your patients are experiencing, it will be extremely valuable to collect their 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, that you also have those patients provide their feedback again and compare to see your growth.
Increase Patient Referrals
As we mentioned in the previous section, word of mouth is an extremely 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.
In order to do so, consider the following tactics:
When choosing a physician, Americans place more importance on doctor-patient interactions and a doctor’s personality than on clinical outcomes.
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.
Prospecting on Social Media
Social media is a tricky, but powerful tool in healthcare marketing because it is widely documented that most patients make decisions surrounding their practitioners based on the opinions of their family or peers, so by nature - social media seems like a genius way to tap into that on a larger scale.
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.
Encourage Former Patients to Come Back
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 encourage them to come back!
Especially in times like those we’re living in right now, annual doctor visits and the likes aren’t exactly top of mind, so there is no harm in providing a gentle nudge to those people to remind them to stop in again.
Additionally, if you have been making 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.
Improve Patient Communication
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 in order 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.
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.
Wrapping Things Up
This has been a lot of information to consume in one sitting, so let’s recap the key points we covered:
- Monitor Key Performance Indicators (KPIs)
- Evaluate Practice Management
- Workplace Management Efficiency
- Hire Carefully
- Determine Your Competitive Edge
- Try to Increase Patient Referrals
- Encourage Former Patients to Return
- Improve Patient Communication
Overall, implementing any of these changes will have a positive effect on your operational expenses and likely patient volumes as well, so initiating several (or even all of them) could be the boost you need to really optimize your practice’s operations.