Keeping Overhead Under Control
Whether practice revenue is rising, stable or declining, controlling
overhead will impact your bottom line. The following suggestions may help
you reduce the drag of overhead on practice profits.
Re-Examine Staffing
Your staff is most likely your biggest expense. Could you utilize them
better? That would make treating your current patients more efficient and
reduce pressure to add staff as your practice grows. You might start by
reviewing how well your staff’s skills and duties are aligned. For example,
some medical practices have their RNs take vital signs, update histories and
do other tasks that lower paid medical assistants could handle. Shifting
such tasks to assistants can free up RNs for triage and other higher level
functions.
You also may want to compare your staffing to that of similar practices by
looking at survey data. If your practice appears to be overstaffed, look at
how you’ve organized your office and at your employees’ mix of skills. The
specific circumstances of your practice may require the present staffing,
regardless of what the surveys say. Or, the numbers might suggest that you
could reduce or restructure your staffing without impairing office
operations.
Employing part-timers could offer potential efficiencies. Part-timers can be
good choices for filing and other clerical duties, and perhaps even for some
patient contact roles. The wages and benefits of part-time employees are
usually lower than what full-timers demand.
Control Time
Overtime typically becomes an issue when staff members are out on vacation
or sick. You may have to pay overtime—or
call in expensive temporary help—if
the daily workload can’t be completed during regular office hours. To ensure
office coverage without additional cost, consider staggering shifts. Also,
have your staff become familiar with each other’s jobs so they can fill in
as needed during busy times.
Compare Compensation
Periodically check your wages and benefits against what similar practices in
your area pay. Low salaries encourage disruptive turnover, but paying
above-market rates increases overhead unnecessarily. Besides information
that you obtain informally from other local physicians, your medical society
or chamber of commerce may have useful data on prevailing wages and
benefits.
Could you cut the cost of your employee benefits? For example, you might
compare annually the cost and coverage of your current staff medical
insurance to that available from your local HMOs and other insurers. If
significant savings are available, don’t hesitate to switch. Or consider
self insuring.
Pay Attention to Supplies
To control rising expenses for medical and office supplies, don’t let your
staff simply continue to use the old, familiar sources. Instead, have them
periodically compare prices from catalogs, other local vendors and/or online
sellers. Often, suppliers will adjust their pricing to meet the competition.
Revisit Telecommunications
Restructuring your telecommunications might generate significant ongoing
savings. Ask for and compare proposals from a number of suppliers for
combination packages that may include local and long distance telephone,
automated answering and voicemail.
Look Ahead
Some components of practice overhead, such as rent and other occupancy
costs, may continue for a long period after an initial management decision.
In any lease or other commitment you make, retaining flexibility to deal
with future growth or the possible shrinkage of your practice is important.
Time for More Technology?
The cost of creating, filing and storing patient records can be a
significant component of practice overhead. Going paperless with an
electronic medical record (EMR) system offers potential savings, especially
if you fully integrate it into your prescription writing, scheduling,
transcribing, billing and other practice operations. On the flip side, an
EMR is a large investment that you’ll want to carefully evaluate.
If you decide to go forward, look for system features that closely fit your
needs, a sound implementation plan and the assurance of continuing support.
We can help you evaluate your choices and the potential impact on your
practice’s financial health. Please contact a member of
Somerset's Health Care Team
if you would like to discuss your overhead costs.
Health Care Commentaries is
provided by Somerset’s
Health Care Team
for our clients and other interested persons upon request. Since
technical information is presented in generalized fashion, no final
conclusion on these topics should be made without further review. For
additional information on the issues discussed, please contact a member
of our Health Care Team. This
document is not intended or written to be used, and cannot be used, for
the purpose of avoiding tax penalties that may be imposed on the
taxpayer.
Somerset CPAs,
P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
http://healthcare.somersetcpas.com
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