12 Easy Ways to Plug Up Your Money Leaks

While we may let credit card errors slide, the biggest area from which we leak money is in our private practices. Hire a practice consultant to review the following systems with you...

The concept of inattention was brought sharply back to mind yesterday when I spotted a glaring error in a restaurant bill (and have you noticed that these kind of errors are rarely in your favor?).

My wife and I got to talking about potential sources for "lost" money and a quick back-of-the-envelope review quickly ran up a possible sum that was mildly shocking. And that's only for what we had some concrete evidence. Aside from the “Oh, I'm sorry, silly me" restaurant bill, let's gird our loins and look at some other spots where we leak money.

How about your credit card statement? Do you reconcile monthly to your receipts? As we look for inadvertent mistakes and maybe minor clerk pilfering, remember we are in an era of identity theft losses, which may show up on your statement. And do not forget the dreaded checkbook balancing. "It's only $100," you say, but it really could be a $900 error and a $1000 difference.

Do you run a line-by-line check of hotel and rental car bills? Lots of problems there. And the worst may be hospital bills, I am sorry to say. After being around hospitals, lo these many years, I am still impressed that even in this era of economic pressure for hospitals, how slackly their financial operations are often run. We are all better off just assuming that all, and I mean all, hospital bills are riddled with errors (again, not in our favor). It's bad enough that you might have to be a patient, but billing screw-ups add insult to injury.

In your personal investment situation, the same kind of caution applies. Make sure that you and your fee-based advisor review your plan for diversity and rebalancing on a scheduled basis. Don't let it slide. And read those financial statements carefully, especially for fees, and don't get shined on by gobbledygook answers to your questions.

This is also the case (even more so) if you have to buy a home or refinance. Many of those application, documentation, and billing fees are just jargon for increased profit. They are not standard and they are all negotiable.

The bloated and incomprehensible escrow documentation and closing procedure is a curse upon the would-be American homebuyer/seller. I've written at length of this rip-off in the past, so don't get me started. If you've been through it you know what I mean.

Tax planning and preparation is another really big area where we let large sums slip away. It's difficult to understand that arcane area, impossible to keep up even if we have studied it, and often we believe ourselves otherwise too busy, so it is easy to rationalize our inattention. If for no other reasons, we need to get a CPA, and get the sharpest that you can find. There are no bargains here. Get the best, pay the big bucks, and be significant dollars ahead.

Maybe the biggest area from which we leak money is in our private practices. You know my mantra by now: we aren't trained to run a business, but it has become essential to learn these skills for our emotional and financial well-being and not knowing how our organization/business functions adversely affects the quality of our patient care more than you think.

So get a practice consultant to review these systems for/with you:

  1. Managing inventory, with control of what you actually need, group purchasing, and inventory control to prevent pilfering and waste.
  2. Coding, coding, coding. You and your staff should all regularly take classes to learn and keep up. Especially now as the advent of the ICD-10 revision looms ahead. Failure to focus on coding does and will cost you many, many thousands of lost dollars.
  3. Accounts receivable control is another area where many private practice docs absolutely hemorrhage money. I know, it's boring, it's tedious and your staff should do this and do it correctly. But it too often is not done properly, it is your practice, your income and your inattention to oversight can be very, very costly.

If you need further motivation to attend to all of this, just guesstimate what all of these losses might total in your own situation. Then if you project the amount of time that it might take to correct and maintain all of this (surprisingly, and happily), the per-hour reimbursement to you might be even more than seeing patients. Amazing, but too often true.

Whether it's a two buck overage on your restaurant bill or tens of thousands lost to coding errors, paying attention to your financial life can pay very well and give you a deep sense of satisfaction.

Put the saved/added money in a tax deferred IRA/401k and in a few years you will feel very satisfied indeed.

'Nuff said.