Cost-saving initiatives that you need to know
With inflation reaching a four-decade high and the healthcare industry recovering from the lingering effects of the pandemic, health systems and medical groups are still facing challenges like never before. Many practices were already struggling with the Great Resignation, staffing shortages and financial constraints, and the current conditions have added another layer of operational complexity that could impact revenue.
As we look to our books and processes to find efficiencies, practice leaders need to learn from the past and embrace cost-saving strategies to boost their bottom line — especially in today’s turbulent economy. After decades of experience in operations, these are the revenue-enhancing initiatives that have proven successful in other medical groups and should be on your radar right now.
It seems like after a lease is signed, complacency sets in and we begin to accept the property and terms of the agreement. But you should not settle or wait to address things like inefficient use of space, poor building maintenance or unfavorable lease terms. Instead, reconfigure the space for how you use it today (e.g., telehealth or storage) and follow up with your property manager about maintenance and lease specifics. Taking the time now to explore options and opportunities may save you in the end.
Some other questions you should consider are:
If there’s ever been a time to go back and re-evaluate your lease and building terms —it’s now. You may even be able to reduce costs by as much as 20%.
Create centralized scheduling
Having disparate scheduling systems across multiple practices can cost you time and patients. To avoid this situation — implement a centralized scheduling system that is accessible across the medical group. The result will ease the administrative burden on office teams and provide better continuity of care for patients.
A one-stop-shop scheduling system and standardized care model across a practice network also leads to more productivity and better use of everyone’s time. And that’s a tried and true formula for increasing profits at a medical practice.
Addressing no-shows head-on through multiple strategies will also improve your bottom line. It may sound easier said than done — but know that focusing on no-shows is worth your time. So how do you do it? The answer is different for every practice (e.g., use automated appointment reminders, request patients confirm appointments and/or enact a no-show policy) and requires the whole team to come up with strategies that work for everyone.
By reducing no-shows and filling vacant appointment slots with patients, practices can increase revenue significantly — by as much as 15% — just by tackling no-shows alone.
Engage the team
Since physicians define the culture of medical practices, it’s crucial providers and practice leaders are committed to supporting their teams. We need to move on from a “Why?” mentality to a “Why Not and How?” way of thinking. Too often when we look at cost reductions, we have a “victim mentality” instead of a shared decision-making and leadership approach.
While collaborative approaches take more time and effort, the decisions made as a collective are more sustainable, long-term and have the consensus of the entire team. As medical practice leaders, that’s a commitment we should strive for and one that will prove to be successful for our practices in the future.
Focus on the long-term
Our professional journeys are a marathon, not a sprint. We need to be proactive in our approach and work on long-term efforts instead of short-term fixes. Many times, we can get caught up in the details and focus attention on the wrong effort. Over time this can lead to a deterioration of revenue and an increase in costs. Then before we know it, drastic changes are required to course correct and reach revenue benchmarks.
Reactive and last-minute decisions can be avoided with a more careful, deliberate and well-thought-out approach. Taking the time to formulate a plan is always beneficial from an operational standpoint.
Want to learn more about revenue-enhancing initiatives for medical practices? Join me for my session, “The Top 20 Revenue-Enhancing or Cost-Saving Initiatives for Medical Practices,” at MGMA’s Medical Practice Excellence: Financial and Operations Conference on March 19-21 in Orlando, Florida. Register now.
Michael O’Connell, MHA, FACMPE, FACHE, is Interim COO for RWJBarnabas Health Medical Group in West Orange, NJ. As a c-suite leader, he has led high-performing teams at two of the nation’s top 10 performers in the US News and World’s Report. He is on the Board of Directors of the Medical Group Management Association and is the past Chair of the American College of Medical Practice Executives Certification Commission.