Understanding Financial Inputs Can Help Your Practice Become More Profitable
When was the last time you did a financial review of your practice? Was it the last time you looked at what you paid yourself? Or do you have a great routine that you follow every month or at least every quarter?
Things change. And they change a lot.
Find a time in your routine to answer the following questions and it could help you uncover some things that you didn’t realize were having an enormous impact on your practice.
How has your patient demographic changed over time? For example, a pediatrician with a very young practice can have fewer patients overall than one with an aging practice.
How has your CPT code usage changed over time? Do you find yourself coding more, or less, complicated office visits and procedures? Why?
How have your insurance payments and collections changed over time? Is there a shift of patients to an insurance company that pays different rates than your previous patient demographic?
Do you know how much you pay for everything in your office? Medical supply costs with the same vendor can change each year, but if your office manager isn’t shopping the best rates, you may be overpaying.
How have employee expenses changed over time? Giving staff members automatic pay increases every year can really add up and, generally speaking, are not the best way to keep up staff morale.
How have your technology expenses changed over time? It is common for software support and other technology expenses to go up each year and some research will help you determine if it is time for a change.
The reality is that there are a lot of different explanations and options to address anything negative that the financials tell you about your practice. I wish I could tell you there is a one size fits all approach to changing troublesome numbers, but there simply isn’t.
Once you know how your finances have changed, determine the area of the largest impact and start to ask yourself why this has changed. Once you have spent time determining and understanding the impact to your business can you start to implement solutions to maximize your profitability.