Five ways to increase the profitability of your medical practice
Many of today’s medical practices are still in recovery mode after the COVID-19 pandemic, and physicians are asking this critical question: How can I increase medical practice profits while simultaneously providing high-quality patient care? The good news is there are several strategies that can help. Consider the following:
1. Ask for more money from payers. When was the last time you reviewed your payer contracts? When you’re thinking about ways to increase revenue, a relatively easy solution is to simply negotiate higher rates. To do this, you’ll need copies of your current contracts and fee schedules. Build your case for a rate increase by focusing on the value you provide to your patients. For example, do you offer extended business hours or telehealth appointments on the weekends? What does your Medicare quality data say about the value of the care you provide?
Another option is an escalator clause, which is a contract provision that guarantees a specific payment increase during a defined period (e.g., an increase of one percent each year over three years). You could also negotiate carve-outs for high utilization services such as office visits. The bottom line? Don’t settle for anything less than you deserve, and don’t be afraid to walk away from payers that won’t pay a reasonable rate.
2. Add new services. For example, have you ever considered adding ancillary services to your practice? What about chronic care management, transitional care management, remote patient monitoring, or behavioral health integration? Some practices may also be able to sell other types of products that interest patients such as skin care products or orthotics.
3. Reduce costs. For example, when it comes to vendor management, can you shop around to find a better deal or negotiate better pricing with your current vendor? Try to think about each vendor you use—your managed IT services, paper services, document shredding, patient linen supplier, and others. Are you happy with your current vendors, or might it be time to part ways? For example, with managed IT services, do you receive 24/7 monitoring, onsite service, secure email, and data migration—or only some of these services?
Medical malpractice insurance is another big cost to consider. Make it a habit to review your policy each year and call around for a better rate. Also be mindful of cyber liability insurance. It’s an added cost, but it can also save you a lot of money in the event of a cyberattack.
What about other types of overhead costs? For example, are you using all of your office rental space, or might you be able to downsize now that some staff work remotely, and you’ve begun to provide more telehealth visits? What about being more mindful of turning off or unplugging all electronics at the end of the day to reduce utility costs? It’s a simple step that can surely save money over time.
Revenue cycle management is another large cost to most medical practices. Might it be time to outsource the RCM rather than keeping it in-house? There are plenty of reasons to go this route, namely increased reimbursement rates with fewer days in accounts receivable, fewer denials, and reduced administrative burdens on you and your staff. Outsourcing your RCM can also help you address RCM turnover.
4. Attract more patients, keep the ones you have. As your patient base grows, so will healthcare revenue. However, patient loyalty and retention are also critical. What do current and potential patients want? One word: Convenience. This includes the ability to pay bills online, view lab results, share health documents, check-in quickly, securely message physicians, and more.
5. Increase staff efficiency. There are many ways to do this, several of which leverage healthcare technology to improve the patient and physician experience while simultaneously reducing costs. Electronic prescribing is a big one because it eliminates time-consuming, manual-based processes. The same is true for sending patient statements via mail, email, and text message as well as mobile patient check-in. Medical practices are also increasingly using artificial intelligence to improve efficiency and cashflow. For example, practices can check eligibility, verify claim status, and monitor electronic remittance advice—all in real time.
Conclusion
Increasing medical practice profitability requires a multi-prong approach that leverages healthcare technology to improve efficiency. Physicians can’t assume that today’s profits will increase organically over time. They must take deliberate steps to increase healthcare revenue. Learn how edgeMED can help by visiting https://www.edgemed.com.
