How can you create medical practice profitability? They can begin targeting sound financial management practices and patient growth strategies that improve overall practice efficiencies.
Pinpoint Financial Management
Create a budget by checking the previous 12-month financial statement and then setting revenue and expense goals. The budget should include physician compensation and every line item. Scrutinize every line item and look for cost savings when feasible. Examine billing and collections. Ensure that outstanding payments are less than 60 days past due, and verify all insurance claim denials for validity. The practice should also audit all procedures to determine which CPT codes it uses most often. Make sure to use proper coding and charting for the most commonly used CPT codes. Not doing so could result in a significant loss in revenue. On the expense side, review all loans, credit lines, and contacts (maintenance and service). New equipment might often be less costly than continued repair costs. And, in some cases, service contracts can be terminated altogether.
Target Patient Growth
Develop a marketing plan to promote the distinctive features of the medical practice. Next, develop a message that communicates these unique selling points to current and prospective patients. The marketing plan should ultimately help the practice achieve its long-term goals, whether they are to increase revenues, expand its geographic service area, explore new market segments or undertake any other strategic objective. A practice should allocate between 2% and 4% of your its total revenue to marketing. In slow periods, ask practice staff to call existing patients who haven’t visited in the last 12 to 18 months to come in for wellness visits. Doing so helps fill open slots in the schedule.
Stay on Point with CRI
CRI’s medical practice CPAs can help your practice stay on the trajectory to profitability. We provide medical practice monitoring, financial review, and benchmarking to physicians and medical practices of all sizes.