How to Manage Expenses & Increase Profitability for Your Medical Practice

How to Manage Expenses & Increase Profitability for Your Medical Practice

There are several ways to improve your practice’s profitability. In this article, we’ll cover the importance of managing your marketing budget, adding ancillary services, renegotiating payer contracts, and hiring a collection agency to help with patient co-pays. We’ll also discuss some steps you can take to increase revenue without sacrificing the quality of care visit this website mycpasolutions.com

Adding ancillary services

While it’s tempting to try to add as many ancillary services as possible to your medical practice, it is important to keep in mind that doing so does not automatically result in more profits for your practice. It is important to do your research and perform a cost-benefit analysis before incorporating any new service. Before adding ancillary services, you should survey staff and patients to see what they would like to see included in your practice.

Increasing your marketing budget

When determining how much you should spend on marketing, remember that the more money you spend, the more profitable your practice will become. Marketing costs should be a minimum of 3% of gross revenues, but as your practice grows, you can increase your marketing budget to as much as 5%. To determine if your marketing strategy is working, you can use the average value of your patients to determine how much money you need to spend on each type of marketing.

Renegotiating payer contracts

A good renegotiation process involves knowing what you want from a contract before you start the process. For example, do you want to increase payment for E/M visits? Or are you looking for a decrease in reimbursement for prescription drugs? Both of these situations are possible, and it is important to take a big-picture approach to renegotiation. If your practice is not seeing a positive outcome from a renegotiation process, it may be time to walk away from the payer.

Hiring a collection agency for patient co-pays

Managing expenses and increasing profitability is easier when you hire a collection agency to handle patient co-pays. Using a patient portal to communicate with patients can also be beneficial. Your staff can easily find the patient’s account information, which can be helpful in collecting payment. Additionally, it is much more efficient to collect payments from patients through a patient portal.

Lean Six Sigma

In order to successfully use Lean Six Sigma to improve your medical practice, you first need to identify the problem. Once you have an understanding of the problem, you can identify the boundaries of the process, product, or service you want to improve. During this phase, you may already have a preliminary team. The boundaries of these functions will determine which functions you need to support the project. In this phase, you will develop a project charter and identify the processes you will be analyzing and the overall performance goal.

Adding non-physician-providers

Managing medical practice expenses is challenging, but the right strategy can maximize profits while minimizing physician overhead. Physicians in office-based practices should delegate non-physician providers to reduce costs and improve overall practice profitability. Incentives for nonphysician providers can help them achieve these objectives, as well as increase revenue. However, this solution has some downsides.

 

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