Improving Practice Profitability

Improving Practice Profitability JAMES A. STROUD, CPA Warren, Averett, Kimbrough and Marino, LLC 2500 Acton Road, Birmingham, AL 35243 (205) 979-4100 Jim.Stroud@Wakm.com www.WAKM.com/healthcare

Cutting Costs  Eliminate the use of the some goods or services  Sunset mentality - what happens if we do without?  Is the need driven by a flawed or outdated decision?  Every item is a candidate.  Use MGMA data for comparison purposes.

 Shop for Different Brand or Provider  Avoid the “We’ve always bought there” mentality.  Top 20% medical and office items - competitive bids.  Can use of available staff time lower the cost to outsiders?  Negotiate a Lower Price  Ask preferred vendor to match lowest price.  Delegate to an employee who “takes ownership.”

 Get outside consultants to assist.  Ask vendors “How can I reduce my costs?”  Find Some Way to Subsidize the Cost  Identify the “interested parties” to your practice. - Drug and supply companies. - Equipment manufacturers - Landlord - Other vendors - Entities to whom you refer  Ask them how they would like to help you.

Don’t Overlook the Biggest Item in the Budget  Compare salaries to surveys.  Lower or eliminate overtime.  Summarize total package.  Convert sick, vacation, etc. to personal days.  Review part-time staff situation.

Increasing Revenue  Add Physician Time to the Year  Lengthen work week.  Take fewer vacations.  Are you ready for a new associate?  Improve the tempo.  Pack the schedule.  Productivity  Capture all charges.

 Code consistently and correctly.  Account for charge tickets.  Review Fee Schedule  Annual fee schedule.  Compare increases to third party payor.  Identify the profitable vs. loser procedures.  Check the Payor Mix, Procedure Mix, and Referral Mix  Review several years for payor mix trend.

 Analyze your procedure mix.  Who is not referring to you - and why?  Match Capacities to Demand  Where are the bottlenecks?  What limits your practice?  Use of physician extenders.  Nights and weekends?  Add NEW Revenue  New procedures.

 New services.  New referral sources.  Satellite offices.  Hire other specialists.  Establish a web site.  Collect for what you do  Who appeals claims and what is outcome?  Are you collecting most co-pays and deductibles?

 Revise collection procedures.  It starts at the scheduling point.  Review professional discounts and courtesy write-offs.  Get the right temperament person involved.  Conclusion  Word of Caution - Profitability Defined

Improving Practice Profitability

by Warren, Averett, Kimbrough & Marino on Sep 27, 2010

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Improving Practice Profitability — Document Transcript