Improving Practice Profitability
JAMES A. STROUD, CPA
Warren, Averett, Kimbrough and Marino, LLC
2500 Acton Road, Birmingham, AL 35243
Eliminate the use of the some goods or services
Sunset mentality - what happens if we do
Is the need driven by a flawed or outdated
Every item is a candidate.
Use MGMA data for comparison purposes.
Shop for Different Brand or Provider
Avoid the “We’ve always bought there”
Top 20% medical and office items - competitive
Can use of available staff time lower the cost to
Negotiate a Lower Price
Ask preferred vendor to match lowest price.
Delegate to an employee who “takes
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
- 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.
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.
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
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 referral sources.
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
Revise collection procedures.
It starts at the scheduling point.
Review professional discounts and courtesy
Get the right temperament person involved.
Word of Caution - Profitability Defined