August 21, 2011

How to Boost Practice Profits: 10 'Tell-It-Like-It-Is' Secrets

Whether you're employed and dissatisfied working for someone else, already in private practice, or considering taking the plunge right out of school, some key steps will help bring you the practice success that you want to achieve.

I've worked for a salary in different practice environments, but nothing gives me as much satisfaction as being my own boss. Of course, in addition to satisfaction, you want to earn a good living. These steps can help you achieve that.

1. Get Computerized
Running an office without a computer is like using leeches for phlebotomies. Buy a practice management program that includes scheduling and electronic billing capabilities. You can be up and running with hardware and software for under $3000. Physicians should investigate several products before deciding which one to purchase.

Don't be confused by price. What you pay for medical management software often bears no relationship to its utility. Make sure that the package you purchase comes from a company with a track record for quality, service, and reliability. Don't wait until you're in the new practice before you buy your system; get it now and familiarize yourself with it at your leisure.

2. Learn How to Do Your Office Manager's Work
Having a computer isn't enough. You have to know how to use it to make appointments, create bills, post payments, and send electronic claims. Unless you personally know how to run your software, you won't be able to show your office manager how you want things done. This is your business, and for it to be successful, you need to be involved with its nuts and bolts. An aloof attitude (eg, "I just want to practice medicine") will leave others running your business for you, often with calamitous results.

3. Keep Your Hand Off the Doorknob While You're With Patients
Make sure that you give great service. This is what keeps your patients coming back and recommending you to their friends. Although all of us as physicians have been trained in giving good care, we do not always know how to give good service.

Here are the fundamentals: Don't make your patients wait. Apologize if you do. Listen attentively, and keep your hand off the doorknob. Call the next day to see how they're doing (this alone will ensure your practice's success) and report their test results back to them promptly. Finally, leave room for same-day scheduling so that you're readily available to patients when they need you.

4. Create a Niche
You'll go broke if you wait for sick patients to walk through the door. There aren't enough of them to go around. Consider doing wellness medicine, which widens the scope of potential patients to include everyone.

Develop a subspecialty such as in dermatology, thyroid disorders, diabetes, or geriatrics. Get into occupational health -- pre-employment physicals, drivers' physicals, flight physicals, workers' compensation for minor injuries, drug screening, etc -- and advertise that you offer these services. A river of money may run by lawyers, but it doesn't run by physicians. We have only rivulets. But add them up, and you will have a mighty stream.

More Secrets That Keep Earnings High

5. Offer One-Stop Shopping
For your patients' convenience, do everything possible in-house. Draw blood, conduct urinalyses and stool guaiac tests, etc on your own. You should be able to bill for these items, and your patients won't have to wait at an outside lab to get the services that they need.

When your patients need outpatient procedures that you cannot offer in-house, help them schedule appointments while they are in your office so that they won't have to hassle with the bureaucracy. Make their lives easier and they will reward you for it.

6. Hire as Few Employees as Possible
Employees are expensive. Add 15% to their hourly wage to estimate their real cost, which includes payroll taxes and workers' compensation insurance. This does not include their paid vacations (at least 1 week to start, but 3-4 weeks after many years of service); paid holidays (a minimum of 6 per year); sick and maternity leave; and, after 3 years of employment, your contribution to their retirement plan. Now, we're talking real money.

Forget what all the industry benchmarks suggest and hire one employee per doctor as a rule of thumb. Have them multitask, and treat them well because they can make your professional life heaven or hell.

7. Send All Claims Electronically
There is no other way to process claims. More and more insurers are coming online, and the big players, such as Medicare, Medicaid, and the Blues Brothers (BlueCross BlueShield), are already there. Sending claims electronically has no downside. In addition to saving trees, it gives you real-time feedback for rejected claims and allows you to resend them. You can receive payment from some online insurers within 5 working days, and few take longer than 2 weeks.

8. Be Aggressive in Billing
Your accounts receivable should have mostly current and "0-30 days" accounts. Once your accounts get out past 60 days, you're doing something wrong. Do monthly aging reports, and follow up on all unpaid claims and bills. Call insurance companies and ask whether they've received the claims and what the problems might be. Sometimes they're pending review; other times requests for additional information have been sent to patients and have gone unanswered. Send patients their statements monthly and after their explanations of benefits arrive. Call patients with unpaid balances before turning them over to your collection agency, and let them know that you are concerned about their lack of payment. Consider whether you wish to keep patients who you have to send to collection, and if not, let them know it. Use a collection agency with a letter service. If patients pay in response to the first notice, you owe the agency nothing; otherwise, the agency takes a percentage.

9. Pay as Little Rent as Possible
Next to payroll, rent is your biggest expense in private practice. You don't need a palace or even a medical office building for your practice. Consider alternative sites, such as a residential unit. The cost per square foot is less, and your patients will feel more at home. My practice is housed in a fourplex, which I own. I have converted one of the apartments into my office, and I rent out the others for a profit. Whatever you do, avoid renting from another healthcare provider; ultimately, you will be in another person's space with little chance of making it your own.

10. Cultivate Relationships With Referral Specialists, Risk Managers, and Claims Representatives
Specialists generally like giving us their advice, and risk managers are paid to. Claims reps, contrary to popular belief, are not instructed to be obstructionists to physicians but are usually quite helpful with inquiries. Consulting with these groups liberally will result in better patient care, decreased liability, and increased reimbursements. Don't be too proud or too busy to call them for help.

You have too much time, energy, and money invested in your craft to drop out, retool, or retire prematurely. If you don't like working for someone else, work for yourself like family doctors used to do. You can do this, and you will wonder why it took you so long. Trust me -- I'm a doctor.

The above article is reproduced from material entitled 'Ten 'Tell-It-Like-It-Is' Secrets to Boost Practice Profits' by Medscape. Retrieved 21.8.2011 from here. Note: Materials may be edited for content and length.


  1. True,i'd say...and straight to the point

  2. This comment has been removed by a blog administrator.

  3. i knew i'd been doing sth wrong all these while...thanks for sharing


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