8 ways to drive down expenses at your medical practice
As every medical practice knows, it can be hard to stay on top of ongoing expenses.
Most of the time, physicians are too busy taking care of patients to be able to spend time reviewing medical supply pricing and other practice costs. Typically, the first time a practice signs an agreement for products or services with a vendor is usually the last time those prices are assessed.But implementing a regular review of your expenses-at least annually-is critically to ensuring that you aren’t spending thousands more than you need to on practice operations.Susanne Madden, MBA, is founder and CEO of the Verden Group, a consulting firm that helps physician practices navigate the business of healthcare.
Start with the easy stuff first
•Determine if you are you part of a buying group (group purchasing organization or GPO). •If you are not, you are likely paying much more than you need to on items such as medical and office supplies, medications, vaccines, and other services. •There are many GPOs to choose from so start with your medical association or local chapter to determine which one(s) they recommend for your specialty. •Some of the larger, national organizations are
Physicians
Alliance
,
Practice Well
, and
CNECT
.
Consider a PEO
•Consider using a professional employment organization (PEO). •These organizations become the employer of record; so while you maintain the management of your employees, the PEO bundles up services including payroll, HR services and compliance, workers compensation, employer liability insurance, and healthcare benefits. •You will pay either a flat rate per employee per month (
Justworks
) or a percentage of payroll (
ADP
).
Address overtime, payroll costs
•Determine if you are routinely paying overtime, and shop around for new payroll companies to make sure that you are not overpaying for those services. •Finding more efficient payroll systems can reduce time and create efficiencies too, so look for price plus efficiency when evaluating options.
Shop around for banking service
•How much are you paying for your bank charges? For credit card processing? For phone and internet? Shop around for the best deals. •Simply asking your bank for a better deal can save money. A recent client-single location, four-physician group-saved $4,500 a year in fees by switching to a new bank, gained process efficiencies with free remote deposit (no staff time wasted going to the bank every day) and online access to all their accounts through a single sign on.
Credit card rates, too
•The least expensive and most customer friendly credit card processor that we’ve found is
Payment Pros
(and we’ve reviewed many companies to determine that, using one of my companies,
Independent Practice MSO
).
•You can also approach your current vendor and ask them to reduce their fees-there is not much they can do on the credit card company rates (Amex, Visa, MC) but they can reduce monthly fees and per transaction costs.
Cut your phone bill
•Call your phone company and ask them what special offers they have.
•If they are not willing to extend those deals to existing customers, tell them that you will be happy to switch to a new company for a better deal.
•Every time we’ve used that approach, we’ve received a better offer from the carrier.
Negotiate your annual EHR contract
•Review all multi-year contracts, such as those you have with EHR companies.
•There may not be much that you can do to reduce the rates you pay during that term, so know when your contracts are up for renewal and ask for better pricing for any renewals.
Don’t stop there!
•Once you get the hang of reviewing pricing, terms and negotiations, look at every expense item on your profit and loss sheet and apply the same methods to each of them.
•If you set up a system whereby you know what contracts and pricing you have with each vendor, and routinely review those rates annually or upon renewal, you will save yourself thousands every year.