Medical practice overhead is a growing concern for many practices that are looking to thrive and simultaneously maintain quality patient care. In today’s medical practice, overhead is directly related to patient volume, collections, and its general structure. These ongoing administrative and clinical expenses are necessary for the business to function but can have a negative impact on the practice’s revenue.
For the medical office manager, the task of reducing a practice’s overhead can be a bit overwhelming. But, by starting small and reviewing monthly operating expenses, you will be able to detect the areas where costs can be adjusted. Keep in mind that even subtle cost changes can add up to big savings.
In order to reduce overhead in the medical practice without sacrificing customer service or quality patient care, consider these 10 best practices:
- Analyze the need for diagnostic equipment. Medical equipment of any nature is both expensive to own and maintain. With ever-changing medical advancements, equipment can become obsolete. Equipment that is seldom used or not needed should be eliminated. If appropriate, consider sharing equipment with another practice.
- Cross-train employees. Between employee sick leave, vacations, and resignations, gaps in patient service can happen. Cross-training employees can help prevent these gaps and is key to great customer service. It’s also a fundamental cost-saving measure that helps eliminate the need to hire temporary personnel during absences. The benefits far outweigh the time it takes to cross-train.
- Hire a temporary worker. Consider hiring a temporary worker or an intern in lieu of a full-time staff person for light clerical work or filing patient records. In the short-term, it can be an ideal solution. However, it is necessary to consider the costs associated with hiring temporary workers. For positions lasting more than six months, a cost-analysis will aid in the decision process. In addition, a temporary position can buy you some time in deciding if the position warrants a full-time employee.
- Implement energy-efficient practices. Don’t let high energy costs consume the bottom line. With today’s modern technology and mobile apps keeping track of energy bills, reducing costs is much more manageable. From energy computation analyzers to energy trackers, smart thermostats, and mobile apps, there’s something for all your energy savings needs. Make sure to turn off lights and office equipment when not in use. It is also important to lower thermostats in the winter and raise them in the summer.
- Negotiate collection agency fees. When it comes to agency fees and bankcards, the rates vary according to volume. Don’t assume that the quoted rates are the best available. You need to ask for a discount to receive one. Before signing an agreement, obtain comparative rate information from other practices. This will help you determine if the rate you are receiving is the best available.
- Open an interest-bearing bank account. Since most operating accounts pay interest on the balance, it will offset any service charges that may apply.
- Review long-distance carrier discounts. In today’s competitive marketplace there’s often a deal to be found somewhere. Investing some time in researching, investigating, and analyzing several long-distance service options offered by different providers can net some big savings.
- Publish pertinent patient information. A well-written website and a patient brochure with FAQs about the practice will help to reduce the volume of incoming mail and phone calls, while also improving patient relations.
- Analyze the difference between purchasing, leasing, or renting office equipment and systems. There’s no doubt that a phone system and other office equipment are major capital investments. For small to medium-sized practices, a rental or lease agreement is a viable cost-effective option. There are pros and cons to purchasing and leasing. If you plan to purchase high-end systems and equipment, keep in mind that they can be costly. This is where you have to proceed cautiously. Expenses are reduced once the equipment is paid for, but there is still upkeep and maintenance to consider.
- Use email and the telephone. With postal services and postage costs continuing to rise every year, written communication is becoming more obsolete. It is more cost-effective to either send patients an email or call them. And, since just about everyone has a cell phone, reaching patients is easier than ever. Remember, HIPAA privacy and confidentiality laws apply.
Reduce Overhead & Manage Financials Successfully
With increasing operating costs and budgets stretched to the limit, a medical office manager’s keen sense of where to draw the line is invaluable. Arm yourself with the knowledge to reduce your organization’s overhead by enrolling in the CMOM certification program. In-depth coverage of this topic is discussed in Module 3: Financial Management of the Medical Practice. Other topics include maintaining a budget, forecasting, revenue projecting, the principles of cost accounting, and other financial management techniques. Learn more and enroll today.