The concept of “doing more with less” has been a part of the healthcare landscape for several decades. The pendulum of market pressures, insurance reimbursement cuts, and technological changes frequently forced organizations to rethink “business as usual.” As a medical practice manager, you may be facing the need to “cut the fat” and wondering where to start. Fortunately, a holistic approach — like the one outlined below — can help you manage through challenging times.
Prioritize Business Planning
Medicine is a fast-paced industry. In the best of circumstances, the pace can cause a group to lose focus on what’s most important: the patient. In the worst of times, the speed creates a reactionary chain, triggering managers and doctors to address crises. If your practice is experiencing this quick clip of ongoing activity, determine if you need to regroup.
When regrouping, be sure to consider future business goals. You may feel like you do not have time to think ahead, but the planning process brings discipline and clarity. Regular business planning identifies opportunities for the practice to meet ever-changing market needs. Further, your commitment to that written business plan can limit distractions and help you focus on impactful actions to navigate through lean times successfully.
Align Your Financials
Once you establish your business plan, align your financials with it. Your profit and loss (P&L) statement is an excellent place to start. Each month, look at your expenses and determine if any areas need addressing. Pay close attention to your variable costs, the line items that can fluctuate based on patient volumes. These expenses are often related to medical supplies and inventory but can include regular payroll and overtime. You may also wish to review the number of employees with access to ordering accounts or credit cards to ensure only necessary spending takes place. If certain expenses do not align with your business plan, see if you can reduce or eliminate them. A vigilant review of your P&L statement and adherence to your business plan can make a difference in the bottom line.
Decrease Variables
If your practice is looking to improve finances and operations with less effort, reduce variability. When multiple providers in an organization consistently practice medicine differently, that variability can hinder the business.
For example, a hospital looking to minimize expenses found that one of its highest medical supply costs was gloves. Every physician in the hospital wanted a different pair of gloves for their clinic. When a manager placed the different gloves on a conference room table, everyone was shocked by the sheer number of variations. Once the group saw the cost of that variability, the organization could streamline its glove selections and gain buying leverage by ordering in bulk.
That scenario shows that seemingly trivial variability — whether it’s in clinical protocols, pre-op and post-op preferences, or staff activities — can cost the organization significant time and money. Therefore, you and your providers must work together to reduce variability.
Review Revenue Cycle Management (RCM)
The opposite of cutting costs is to increase revenues. While you may equate generating more revenue with seeing more patients, it can also involve ensuring that the business office collects monies for completed work.
Effective RCM is one way to improve the bottom line. Whether your billing processes are outsourced or in-house, the practice must be able to collect appropriately for its services. To ensure that, there are a few critical must-dos for your billing department.
- Perform daily reconciliation. Each day, the billing team should reconcile the monies collected at checkout, direct deposits (EFTs), and the practice management system. Any errors or omissions should be reviewed and corrected.
- Complete monthly reconciliation. The professional fees on the P&L, bank statements (what you deposited that month), and practice management system reports should match each other to the penny.
- Enforce pre-collections. Whenever possible, the practice or ambulatory surgery center (ASC) should collect for services in advance.
- Apply unapplied payments. If your providers offer elective procedures and payment is collected in advance, but the billers post the money as unapplied, make sure you have an effective process to apply the funds to the patient’s account.
Focus on Staffing
Regardless of your practice’s specialty, your staffing costs have likely increased in the past 12 months. Your time spent recruiting and training new staff may also have increased, especially if you’ve hired those with little or zero experience in healthcare. Simultaneously, you (and your team!) may be feeling the effects of consistently being understaffed. This multifaceted staffing issue is not going away soon, so below are a few ways to mitigate its impact on you, your team, and the organization.
- Revamp your organizational chart. You may need to re-organize your teams into more efficient groups. Revamping your organizational chart can assist you in defining your hiring needs, identifying staffing gaps, and ensuring you build the right team that aligns with your business plan.
- Outsource human resources. You can also gain personnel support by utilizing outsourced human resources. One type of organization to consider is a professional employer organization (PEO). PEOs can provide HR support and administration, payroll services, and access to large group health benefits.
- Hire a recruitment agency. Recently, you may feel more like a full-time recruiter than a practice manager. You are not alone! To help alleviate this increased burden, you may need to leverage a recruiter or staffing agency to assist you in filling essential vacant roles.
- Commission outside training. If your staff lacks time to train new employees, you may need to hire outside trainers to develop recent hires and shore up the skills of your existing team. Also, don’t forget to leverage your current resources, such as eLearning courses and certification programs.
- Embrace alternative staffing models. To attract employees, consider non-traditional staffing models. For example, some scribes or surgical coordinators can now work hybrid schedules, splitting their time between the office and home. This working model can help make your positions more enticing.
- Offer flex time. Employees are also looking for flexible work schedules, such as a 4-day work week, allowing them to spend more time with family. When you can better accommodate personal lives, you are more likely to retain staff and have a larger candidate pool for openings.
Managing Through Cycles
As a manager, you will have times when you need to double down your efforts and ride the wave of uncertainty. You will also have times of plenty, when your group is growing and expanding. Regardless of where you are in the cycle, following the tips above can ease the burden of doing more with less. And when you come out the other side, you and your organization will be more efficient and headed in the right direction.
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