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Ancillary Services: To Add or Not to Add?

Ancillary Services: To Add or Not to Add?

There are no shortage of ancillary services primary-care physicians can choose to add to their practice. From imaging services to sleep studies, the ability to provide patients with convenient in-house services can be an appealing one. But, as healthcare consultants warn, adding services may not be the right move for every practice.

"If practices don't have an advisor or a strong businessperson in their practice they need to take the time to understand what the service is, what it offers, and how it can help the patient and practice," says Doug Graham, a practice consultant at DoctorsManagement in Knoxville, Tenn.

Here are some important questions practices need to ask themselves before adding ancillary services.   

How will adding ancillary services help the bottom line?

At the end of the day, a medical practice is a business that needs to make a profit. Physicians at small practices often have to spend time thinking from a financial perspective to succeed, something that they rarely do, says Sean Weiss, also a practice consultant with DoctorsManagement.

"Physicians are horrible at business. Physicians make the worst business decisions that you can imagine. They don't do the proper homework," says Weiss. He recommends a strengths, weaknesses, opportunities, and threats (SWOT) analysis prior to adding any services. A few of the questions Weiss suggests practices ask during the analysis include:

• Is the practice doing things well enough that if it adds additional services, it won't have a negative impact?
• Does the practice have the right staff?
• If not, what is the cost to bring in the qualified staff to render the services?

Alti Rahman, a practice administrator at Oncology Consultants, a Houston, Texas-based healthcare consulting firm, says a physician looking to add ancillaries needs to be a businessman first. "You want every square foot of your practice to be generating revenue," says Rahman. He suggests taking the square footage of the building and splitting it into how much is producing revenue and how much is not.

"Then, ask if some of that non-revenue generating square footage can be used for ancillary services," he adds.

Graham stresses the importance of practices keeping revenue in-house if it makes sense. "Some of my clients have ultra-stenographers scheduled inside the practice a day or two a month. They read the images inside of the practice so the practice keeps the revenue," says Graham, who also says neuropathy and vascular testing are options for practices to keep revenue streams in-house.

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