21 WAYS TO CUT COSTS AND INCREASE YOUR REVENUE
Updated: Mar 24, 2020
Healthcare costs have been on the rise and do not show any sign of slowing down. The stakes are even higher with the uncertainty about whether the Affordable Care Act(ACA) does get “repealed” and “replaced”. So far the numerous attempts to repeal have failed. With the attempts to paralyze certain portions of the ACA, it's uncertain what will be left and how it will affect healthcare delivery in the near future.
Healthcare providers have continued to incur higher operating costs as a result of increasing labor costs, high professional liability insurance premiums (due to high rates of frivolous law suits) and the cost of keeping up with and managing the increasing number of standards and metrics that some argue do not accurately evaluate or necessarily improve healthcare quality. This Wall street Journal report by Melinda Beck, titled “What Measures Should be used To Evaluate Healthcare” explores this subject.
In addition to higher costs, reimbursement rates have been going down. This is another area of uncertainty and there is no indication that anything will change in this regard. Like every other business, healthcare providers have to make money to keep their doors open. The degree to which they succeed depends on how well they can manage their operating costs. There are smart ways to cut costs without sacrificing quality and the “human touch”. This post outlines 21 easy ways to cut costs and increase your medical office revenue.
1. Use technology to your advantage
Do you regularly hold meetings out of site? You can save a bunch on travel time, gas and entertainment expenses by holding virtual meetings. There are many options that offer free as well as paid services depending on your preference. You can also hold virtual consults with your tech-savvy patients who would rather not come to you, especially for non-serious complaints. Some good services to explore are those offered by Fuze, GoToMeeting and Webex.
2. Embrace cloud computing
Use cloud storage! No expensive computer systems or servers to buy, no in-house administrator overhead. Two HIPAA-compliant cloud storage providers you can check out are clouddip and carecloud. In an article by Ajmal Kohgadai of skyhighnetworks.com, he provides a list of Top 5 HIPAA-compliant cloud storage services and why he recommends them.
3. Outsource tasks where possible
Outsource tasks that are not necessarily needed to be performed on site. HR, payroll, billing and coding are services you can outsource in order to save money.
4. Re-evaluate your operating hours
Are you currently open on days or hours that you don’t have enough patient load to fill up? If this is the case, consider cutting operating hours on typically slow days or moving from 5 days to 4 days. Your staff may actually prefer to have a day off to attend to their other needs rather than be stuck in the office when there are no patients.
5. Introduce Saturday Clinic
Use surveys to determine if some of your patients would prefer Saturday clinic instead of a week day. This is a selling point that can potentially attract new patients to your practice. Worried about additional overhead costs? Depending on the expected patient load, it just might be worth the try. Your staff may also like to work on Saturday and get a slow week day off. You can start by offering one Saturday clinic every month and gradually build up if the demand increases.
6. Use multiple suppliers
Consider using multiple suppliers if it makes business sense. The convenience of using one supplier is not always worth the additional cost. It pays to shop around! If you can find one vendor that offers decent rates for most of your suppliers, great! Otherwise, find the most cost-effective vendor for different groups of products/supplies. Healthykin.com offers great prices and can supply everything from scrubs to medical/surgical supplies and cleaning products.
7. Rethink how you approach employee rewards
Be creative with employee rewards and pay raises. Times have changed and you’ll be surprised how many of your staff will choose flex hours over actual pay raises. With more generation-Xers and millennials in the workforce, it's not always about the money. Experiential rewards and perks rank high among millennials so they tend to factor quality of life into their decisions about who to work for. Take the time to identify what kind of rewards your employees prefer and determine what it will cost you to offer those kind of rewards. It could cost you less to offer rewards employees actually love and want.
8. Switch to internet fax
Fax machines in the office are no longer considered necessary. Secure internet fax services are cheap and save you a lot of money. Not only do you save money by not buying a fax machine, you also save on paper and ink. Internet fax service also saves you the headache of missing faxed patient reports due to the fax machine being out of paper at the time of faxing. Script inc provides a HIPAA-compliant fax service that’s actually very affordable.
9. Use e-mails instead of conventional mail
Registered mail may be appropriate in certain situations especially if it involves legal notices or certain other very important matters. Otherwise, use e-mails for your daily communication with your patients and vendors. Reward patients with discounts or freebies if they sign up for e-mail communication. Apart from saving money on envelopes and stamps, e-mails also ensure quicker turn around time. Time is money. You can’t beat getting same-day response as opposed to potentially 2 weeks, assuming the mail doesn’t get lost in transit.
10. Use Online bill pay
Pay your bills online so you can be sure your payments are processed in a timely manner. Online bill pay also lets you keep track of your payment history. I don’t remember the last time I sent a check in the mail for bill payments even for my personal bills!
11. Use Part-time or Per Diem staff
Using part-time or per-diem staff can save you a whole lot in overhead costs. Freelancers and consultants come in handy for services you only need periodically or at certain times of the year when things slow down.
12. Define your value stream
Define what’s important for your practice to thrive and grow and what steps are necessary to achieve your goal. Once you identify these vital steps, streamline and eliminate unnecessary steps and overlapping positions that cost you money but don’t necessarily increase your bottom line. Be sure every staff has a defined role that adds value to your practice so everyone knows clearly what is expected of them.
13. Reduce your energy bills
Invest in energy-saving devices and equipment. You may spend a little more upfront, but the long term benefits far outweigh the initial expense. You can speak with your tax professional as you may be able to recover some expenses made on energy-efficient devices.
14. Stock up during seasonal sales
Take advantage of seasonal sales on commonly used office supplies and stock up. There’s nothing wrong with having a year’s worth of supplies if it costs you half the regular price. If you buy items that have expiration dates, just don’t stock up too far out on items that are within 6 months to expiration unless you are sure you can use them up before they expire.
15. Make the best of your space
Reevaluate your use of the space you currently occupy. Consider down-sizing if you do not need all of the space. If possible, consolidate office space allocation and rent out unused space as long as it doesn’t interfere with your work flow or make your staff or renters feel uncomfortable.
16. Make smart business credit card choices
Be smart choosing your business credit card. Remember you can always shop around and take advantage of promotional credit card offers that help your practice save money or earn cashback that can go right back into your business. Find one with rewards you could easily use for your business purchases. By the way, pay off your balance as quickly as possible to avoid paying interests.
17. Sign up for auto payments
Late payments are costly. Beyond costing you money in fees, they could also rob you of a good reputation. Auto payments take away the burden of having to keep up with due dates. One down-side is the tendency for some irresponsible vendors or service providers to piggy-back unauthorized or illegal charges which can go unnoticed for a long time. Be sure to check your account regularly so you can catch when illegal or unauthorized charges are made and stop them before it’s too late.
18. Consider expanding your services
Are there services you’re not offering that can potentially generate more revenue to your practice? It's actually pretty easy to generate ideas. Your patients are a good resource for figuring out what relevant valuable services you can introduce in your practice. Using a simple, well-worded survey your patients can offer suggestions as to what services they will love to see you offer that they’re willing to pay extra for. The great thing is that some of these services may cost you nothing but could really boost your revenue!
19. Add a cash option if you don’t already offer it
Cash-only or direct pay business model is an interesting trend that has continued to gather popularity among healthcare providers. A Time magazine article by Haley Sweetland Edwards titled “What happens when Doctors Only Take Cash” discusses this growing trend. Many physician practices, surgery centers and imaging centers have already adopted this model and are reaping the benefits. You can increase your practice revenue by offering a cash option to those with employer self-pay coverage, traditional insurance with very high deductibles or uninsured individuals who are willing to pay cash for quality care.
20. Get involved in the Community you serve
Encourage your staff as a group to get involved in community volunteering activities. Get out there in T-shirts with your logo, sponsor community events, provide T-shirts with your logo as gifts to other volunteers during such community activities. Partner with other organizations or non-profits in your community to provide Pro-bono services to your community members. Many organizations are actually requiring their leadership to be involved in the community in some way. Participation along side members of the community you do business in helps build trust and ultimately results in more business for your practice. These kinds of activities can also generate free press coverage for your practice.
21. Get a professionally-built website
If you haven’t already established a presence on the web, it’s time to do so. Everyone, virtually everyone shops online for everything from make-up to healthcare. It doesn’t cost much to establish a strong online presence that better positions your practice to attract more patients and increase revenue.
If you are a good writer, consider adding a blog that’s focused on addressing solutions to common problems related to your area of practice. If writing is really not your thing, you can engage good freelancers to write on relevant blog topics that can drive traffic and attention to your practice website.