Are you feeling the pinch of reduced income and increased costs? Learn 9 ways to help cut your costs.
Pinched by declining reimbursements and the high cost of doing business, you may be looking for ways to economize in your practice. Although medical and office supplies are only a modest portion of a practice's expenses, they nonetheless represent an opportunity to trim spending.
Medical and surgical supply costs for a practice represent less than 1% of their medical revenue, based on Medical Group Management Association (MGMA) data for single specialties; compared with that figure, support staff is 25%, according to Kenneth T. Hertz, FACMPE, principal, MGMA Health Care Consulting Group.
To get an idea of the value of reductions in supply costs based on financial realties, not habits, consider the situation in the framework of the Medicare reimbursement for a level 3 (99213) office visit. A savings of $1,000 could be the equivalent of 40 patients, without the collection risk and overhead, suggests Karen Zupko, president of KarenZupko & Associates, Chicago, Illinois. "The money flows directly to the bottom line," she adds.
Some tips to help you trim your supply costs:
■ Take leadership.
Practice finances are not going to take care of themselves, and you will need to take leadership in overseeing the purchase of office supplies, medical supplies, pharmaceuticals, and injectables. Leadership in this situation mandates that you communicate with your staff members.
"It starts at the top," Hertz says. "You have to have physician buy-in, and you have to get staff buy-in. The staff has to understand that this is an important issue and that they make a difference."