Medical office managers are often so focused on the day-to-day that it can be easy to lose sight of the big picture. That big picture is profitability—because, without it, the practice will not remain in business.
Although profitability isn’t rocket science—after all, only rocket science is rocket science—it does require attention to detail, or what Medical Office Manager calls the key ingredients of a profitable medical practice.
1 Cash flow
At the top of the list is cash flow. If the money isn’t coming in, it can’t go out to pay expenses, including staff salaries.
With this in mind, it’s important to have a clear understanding of accounts receivable (A/R). Payments due from patients and other payers are considered A/R.
A common way to look at A/R is by days or time to pay. Typically, A/R is classified by age, based on payments due for services billed, and placed into buckets: 0-30 days, 31-60 days, etc. Needless to say, the goal is to obtain payment within the shortest window of time.
If you haven’t done so already, it’s essential to take a look at how your practice is performing with regard to accounts receivable. Then, you should examine where the payment delays are occurring.
Patient payment issues can be addressed in a number of ways. Here are how other practices have increased patient payments.
2 Hiring practices
All the processes in the world won’t make a difference if you don’t have a capable, conscientious staff. To this end, effective hiring practices are a must.
These practices include conducting meaningful interviews and thoroughly screening candidates. Candidate screening may involve reference checks, background checks, and/or drug testing.
Here are interview resources and background check information that can help.
Make no mistake: Bad hires cost the practice money in terms of lost productivity errors, office conflict, and other negative outcomes. The cost of replacing a bad hire is also significant.
3 Termination practices
And speaking of cost, when it comes to managing staff, termination has the potential to be the most costly.
If you have to terminate, do it right.
Doing it right involves following the law and ensuring that all disciplinary and termination practices are applied fairly and consistently.
When in doubt, consult an attorney or an HR expert.
4 Purchasing
Although purchasing may seem like a secondary medical office activity, it affects the bottom line. Dollars saved as a result of contract negotiations and smart purchasing decisions add up quickly.
It “pays” to follow good purchasing practices, like these.
5 Staff morale
Few things waste more time than office conflict. Similarly, negatively drains an office of much needed energy.
In addition, scientific research shows that human behavior is contagious. Therefore, it’s important that you don’t let conflict and negativity fester.
Address any issues before they affect morale. Your practice will be more productive and more profitable because of it.
6 Patient satisfaction
Staff morale has the ability to greatly impact patient satisfaction. Telephone etiquette, patient greetings, and interaction during scheduling and check-out all make an impression, and you want that impression to be positive.
Establish standards and expectations, as well as procedures, which create a positive patient experience. Also consider patient satisfaction when evaluating staff performance.
Focusing on the patient experience can’t be emphasized enough. A positive patient experience leads to patient satisfaction. Satisfied patients stay with the practice, and they refer others. It’s not a stretch to say that patient satisfaction is a primary driver of practice profitability.
Be that as it may, all the ingredients cited here combine to make a profitable practice. For that reason, you don’t want to leave anything out.
