Finding Cash in Your PracticeMay 05, 2021
I have managed many practices, turned failing practices around (quickly) and consulted with many more. I have noticed somewhat of a dichotomy. In some, the physicians know EXACTLY what they are bringing in and what they are spending. They are involved heavily in the budgeting process and examine their financial status on a monthly (or more frequent) basis. They pore over monthly reports with a critical eye and pivot the actions/initiatives of their team based upon the data as necessary.
On the other hand, even though they review monthly reports, there are physicians who just want to know it is ‘handled’ so they can go about what they enjoy most – patient care in the operating room and/or office. I don’t blame them – they likely hired someone to take care of the details so they can focus on what they enjoy and do best! Neither is right or wrong (I truly enjoy working with both types), just different. In both scenarios, I can almost guarantee there are places to find fast cash.
You have likely already examined your expenses and made many adjustments already (while wondering why you didn’t do that a long time ago). And, in my experience, here are a few places where cash is usually hiding. There are other initiatives, but we will start here and save those (as well as new profitable revenue streams) for future articles:
* Mainly for insurance driven practices (although sometimes with cash only practices as well), a quick review of services completed and claims sent results in discovering missed charges. For timely filing, I like to begin one year ago and then progress to the present. I start with the highest charges such as surgeries and procedures and dig deeper from there. You may be amazed at what you find. In two practices I worked with, we were able to bring in more cash in one quarter than the three previous quarters combined.
* From a cost savings perspective, you need to look in 3 primary areas. First is payroll. Over the years, adding more staff might have been the answer to inefficiencies or lack of having processes in place to streamline operations. Second is overhead. Perhaps it is time to re-negotiate your rent or mortgage and then dive into recurring payments you are making for professional services that do not have a good return on investment. Third, review other recurring monthly expenses that are no longer necessary. Look at your utilities, internet expenses, printing expenses for your marketing/collateral/educational materials (online vendors are much less expensive), biohazard waste removal and bank/credit card fees as a start.
While these two outlined initiatives can be thought of as painful, I find them to be more of a search and find challenge with many aha moments along the way. I encourage you to focus on the savings and found revenue instead of any potential feelings of regret. Once these are discovered, the next step will be putting systems in place for maximum efficiency and reporting that guards against lost revenue or overspending in the future.
For many of our practices, the daunting and unfortunate task of layoff’s or reduction in hours for some team members has been an unexpected and painful reality. Navigating that process was likely difficult at best. I encourage you to take this time to complete these measures outlined above and be creative about how your team may be best utilized ‘on the other side’ to fulfill your business vision.
Your community is going to need you more than ever as those that have put off weight loss understand how important it is to take action now and those that have gained more weight during this time realize they need to take corrective action (the sooner the better).
Let me know your thoughts and reach out if I can help in any way. In the meantime, take care. [email protected]
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