Increasing Your Medical Practice Profitability During Economic Down Turns
Even the most hardcore optimists have shaken off their denial cloaks and come to realize that we are in a severe financial quandary when it comes to our medical practices in today's economic climate. The economic straits that we have swept across this great country of ours are no more blatantly apparent than in our own medical industry. The fact is, if you are a physician or owner of a medical practice today, your means of making a living are under attack from all sides. But do I have news for you, not only is it not going to get any better, it's going to get worse.
Ok, so it's not all bad. The economy will improve, and so will our portfolios. But the climate that we operate our practice in will remain forever changed. However, there are some things that pro active physicians and practice administrators are doing today to make themselves more profitable than ever. In fact, I know some physicians who are making more money now in their career than ever, even while taking in less revenue. So what's it all mean? How can such a contrarian statement bear out that truth: less revenue=more profit?
Well, first let's take a look at what is happening today in this so called new millennium. Whether we like it or not, the good ol' days are gone. You remember them well, I'm sure: we graduated from med school, formed or joined a practice, worked hard building it up, then retired young enough and with sufficient financial assets for us to enjoy a health active retirement with our families. So what happened? Well, lot's of things. Let's take a look at today's medical climate from a financial standpoint and then see if we can put Humpty Dumpty back together again.
One of the ways we have been painted in to a corner is by the insurance company's we have shackled ourselves to. We can hardly do business without them, but dang they sure are getting skinny on how we get paid! And God forbid something gets turned in that's coded wrong. We may never get paid. I wish I were kidding but we all know I'm not. I love to tell the story to my clients about physician in South Florida who took one of the Big Boys of the Insurance World to small claims court. AND WON! Yep, he packaged a bunch of unpaid claims into small batches and took them to court. The parties wound up settling out of court, but sheesh, has it really come to this?
Well, in a way it has. Not only are insurance companies getting stingier, the co-pays are getting larger. This means the portion we are collecting from our patients is growing to a greater amount. And even if we have the most well trained rottweiler handling our patients at check out, we are going to have to collect some of that co-pay after the visit. Many doctors are using outside collection agencies to help collect this money. Sound harsh? Not really when you think about it. You're a physician, not a financier. The Mercedes dealer doesn't play bill collector when you drive off the lot, why should you?
We are just outsourcing something to a third party who is better equipped to handle this than we are. Which brings up a very important concept in today's profitable medical practice. Outsourcing. What should you outsource? Anything that does not have to do with your core competency as a physician. Lab work, pathology testing, payroll, human resource services, medical billing, collections. If you can think of it, out source it.
Next we will look further into ways to strategically shave expenses and increase profits.
