Twelve Cost Saving Strategies to Save Your Practice Money
By Cheyenne Brinson, MBA, CPA
KarenZupko and Associates, Inc.
Overhead reduction is a big topic and here we focus on ways to save $1,000 here and $1,000 there. In the last article, we focused on cost savings by deploying technology in the billing office. Often, we find these straightforward strategies are overlooked as they are dismissed as small dollars. These small dollars do add up to provide a sizable savings to your practice. Think of it this way – a $10,000 total reduction in overhead is 25 carpal tunnel cases (64721) at Medicare rates or 47 Level 3 established patient office visits (99213) at Medicare rates.
1. Telephone Bill – besides the obvious (making certain that you are paying for the correct number of telephone lines and not ones for your old office after a move), look at the technology. Some practices are using analog phone lines and residential DSL internet. Switching to digital technology or Voice over Internet Protocol (VoIP) consolidates phone lines and gives you high speed T1 internet access for a considerable monthly savings ($200-$500/month). Another strategy is to renegotiate with your current provider. One client, a three man surgical practice in Missouri was able to save $700/month simply by calling Charter to renegotiate their current plan, including long distance calls and internet service.
2. Malpractice – if you are claims free, use an EMR, and/or attend a risk management seminar, ask about a risk rewards discount. These discounts can add up to 15%. Also, shop your broker from time to time to make sure you are being presented the best rates and companies. At a recent orthopaedic managers meeting, substantial discounts were reported by sharp administrators.
3. Accounting Fees – a good accountant is worth his or her weight in gold, but take a hard look at the services he or she is providing to you. If you are receiving monthly compilation reports – several months behind, what value are you receiving? Often times, “bookkeeping” services are most cost efficient performed in house and then have your accountant concentrate on tax planning and tax preparation services. Same goes for payroll processing. National payroll companies offer competitive rates to process your payroll – saving you money. Also, process your payroll on a bi-weekly or semi-monthly basis, not a weekly basis. Weekly payroll costs add up over the course of the year and are an administrative burden to administer. If overtime is not an issue in your practice, and your state allows it, a semi-monthly payroll is the most cost effective payroll cycle.
4. Advertising – if you still have a full page yellow page ad, those dollars are best spent elsewhere! Depending on your geographic market, you are better off just having your name printed in the yellow book and spending money sprucing up your website. Most patients find you through your referring physicians, past patients, and word of mouth. Then, they go “check you out” on the internet before making their final decision. Redeploy your cash and invest in your website.
5. Collection Agency – these costs can stagger easily. There are agencies such as GreenFlag Profit Recovery, an MGMA AdminiServe Partner, that offers pre-collection activities for a flat dollar amount. The key to success with these types of services is to turn over the account at 75-90 days, not 180 days. The older an account is, the less likely they will collect.
6. Computer Support – if your computer support charges continue to escalate, there may be an underlying root cause, perhaps there are needed hardware or software upgrades. Also keep in mind the staff productivity loss that occurs when the staff aren’t trained, don’t use the program optimally or when the computers are down, hidden costs that most often go overlooked. These are costly.
7. Credit Card Processing – new technology allows you to process credit cards through the internet, freeing up a telephone line. Also, make sure you aren’t paying too much on payment processing - Solveras Payment Solutions will provide you a free Payment Processing Analysis. We’ve helped practices easily save $3,600 per year.
8. Medical and Office Supplies – first, take inventory of what you already have – which means having everyone empty out their desk drawers! Poor inventory controls or sloppy supply closets often lead to over-ordering. Who is in control of ordering? Who selects which supplies the practice uses or is it a free-for-all? Determine what your top 25 medical supplies and office supplies are and then “shop” those supplies on an annual basis. eSurg offers special discounts for MGMA and AAOS members. Insist on MD approved purchase orders.
9. Group Purchasing Organization (GPO) – Join a GPO to save money. MGMA members can join Amerinet and enjoy discounts from Verizon and Sprint wireless service agreements, CDW, FedEx or UPS on ground shipping, and more.
10. Postage Meters – shop the costs of your postage meters. Pitney-Bowes, Neopost, and Hasler are companies many practices use. Using stamps.com to print postage and forgoing an expensive postage meter can save the practice money! And, if you do billing in-house, make certain you are using an automated service to send your statements. Your clearinghouse or practice management system often offers this service for 50 – 60 cents per statement – the time savings alone is well worth this small investment.
11. Dues and Subscriptions – often overlooked, but if you aren’t reading it or using it, cancel it and pocket the savings.
12. Energy Savings – go green to save some green. Turn off lights and computers at the end of the day. Install sensor controlled light switches to automatically turn off when an exam room or office is not occupied. Use energy efficient light bulbs. The savings ccumulates over time.
The estimated cost savings of deploying these strategies in a practice is approximately $16,700 annually – and that’s conservative. That’s 42 carpal tunnel cases (64721) or roughly 78 99213 visits. These seemingly small dollars do add up!
|
Per MD Annually |
Telephone Bill |
$2,400 |
Malpractice |
$1,500 |
Accounting Fees |
$1,000 |
Advertising |
$1,500 |
Collection Agency |
$1,000 |
Computer Support |
$1,000 |
Credit Card Processing (plus phone line) |
$4,500 |
Medical and Office Supplies |
$1,500 |
GPO |
$750 |
Postage Meters and Postage |
$500 |
Dues and Subscriptions |
$250 |
Energy Savings |
$800 |
Total |
$16,700 |
Author Disclosure
The author does not have a financial relationship with any of the vendors mentioned in this article nor does she receive any compensation from them.
About the Author
Ms. Brinson is a practice management consultant and speaker with KarenZupko & Associates who helps physician practices build solid internal controls, reduce overhead, and increase revenue.
Author Contact Information
Cheyenne Brinson, MBA, CPA
Consultant and Speaker, KarenZupko and Associates, Inc.
625 N. Michigan Avenue, Suite 2225, Chicago, IL 60611
(312) 642-5616 ext 220
cbrinson@karenzupko.com