In June, the MGMA-ACMPE released the results of a questionnaire that ranked members' most-pressing practice management challenges. In this edition of "Practice Makes Perfect," we'll tackle No. 9 on that list: managing finances.
For years, physicians and administrators have tried to control expenses and increase practice revenue. It can be a daunting task just to review your finances. I've worked with many practices that review their finances, make a couple of changes and don't think about them again for another year or two. In reality, managing your finances is an ongoing process and will boost the health of your organization. Consider the impact of evaluating the following areas.
Evaluate overtime expenses. If overtime has crept up, it might be time to review work schedules. Many practices have found that using flex schedules or staggering the arrival and departure times of staff can reduce overtime. In other cases, the staff is truly shorthanded. Evaluate whether adding a part-time clerk or medical assistant would be helpful, and address the impact on payroll. This may actually cost the practice less overall than paying time-and-a-half for staff overtime.
Evaluate staff productivity and make sure you have the right staff on board. Seek employees who are certified by the ACMPE. Individuals who have earned the Certified Medical Practice Executive (CMPE) credential have validated and verified their expertise and experience in medical practice management and will help effectively manage your practice's finances.
If your practice has or is planning to implement an EHR, understand how that impacts your physicians' productivity. If one provider has not mastered electronic charting, it may be advantageous to use a scribe to improve that provider's productivity. By recording symptoms and exam elements for physicians, hearing the patient instructions and documenting the testing and lab orders, the scribe can be instrumental in increasing the amount of time providers spend with each patient.
Periodic review and renegotiation of contracts can save your practice money. If your patient volume has increased or there is more competition in the market, you may get better pricing now for medical supplies, printer toner and paper. Your merchant services fees could also be reduced if more patients pay now by credit card. In addition, if your contracts have been in place for more than three years, it may be worth your time to bid out the service to competitors. Your managed-care contracts may not cover your medical supply costs or reimburse your medical-records expenses, and medical liability and health insurance continue to rise in most markets. Even outsourced professional services, such as radiology and EKG interpretations, can be reviewed for possible price cuts.
Your needs may have changed over time, and you may qualify for lower financial and consulting service rates. Ask your vendors for ways to reduce your expenses; it will ensure that they do not take your business for granted. If a bookkeeper or your staff can perform some of the accounting functions instead of a CPA, your expenses can be reduced.
New payment mechanisms and delayed payments from insurers may create cash flow challenges.
It would be advantageous to prepare for your future financial needs with ready access to capital at favorable loan rates. Cash reserves and contingency funds can help insulate your practice from delays in reimbursement. A recent study of our members indicated that during the past few years, fiscal uncertainty has caused practices to put off capital investment and other growth-oriented investments to protect themselves from potentially disastrous cuts to their bottom line. A sound financial strategy will help you manage finances in both the short and long term.
In this era of declining reimbursement and increasing expenses, your focus on fiscal matters and properly managing your finances is critical. By understanding and periodically examining practice expenses, you will have an opportunity to make informed choices and, hopefully, retain some of your money. Even incremental adjustments can result in substantial aggregated savings that can eventually be reinvested in your practice to help better serve your patients.
Senior industry analyst