5 Tips To Increase Medical Practice Revenue
Changes within the healthcare industry have led some medical practices struggling to stay afloat. The introduction of the Affordable Care Act (ACA) brought about a series of changes in insurance regulations, becoming an ongoing source of frustration (for both staff and practitioners).
Further, these changes continue to impact the following:
- Reimbursement rates
- Cash flow management
Medical professionals are also increasingly burdened with a large amount of paperwork that must be processed. This, in turn, eats up a lot of time that they could spend with patients and staff.
According to Pharm RX physicians, on average, spend almost 8.7 hours per week on paperwork that has little to no direct relation to healthcare. That’s a whole working day that could be spent caring for patients.
Further, the ACA brought about Value-Based Payments (VBP) which requires a practice to prove that they’re providing lasting care. By 2020, most large insurance providers will incorporate VBA into 75% of their contracts.
Since the ACA went into effect six years ago, there have been a lot of positive results. Today, millions of Americans who were previously denied basic preventative care have quality health insurance. Although this increases the traffic within clinics, the clinics themselves do not really benefit. Medicaid is the provider for many of these new patients. As a result, private clinics are losing out on income because Medicaid payments are traditionally low. As a result, there has been a recent trend of doctors giving up private practices for employment at larger institutions with a guaranteed fixed salary.
To add to this, insurance reimbursements are also declining. At the same time, significant investment is now needed to maintain a high level of compliance. If that wasn’t enough, medical practices will also be affected by the rising costs associated with new technology.
So under these circumstances, what can medical professionals do to increase revenue?
Although the answer to that question may seem complicated, in reality, the answer is quite simple.
Medical professionals can essentially enhance their revenue by:
1. Controlling costs
2. Listening to patients
3. Offering ancillary services
4. Benchmarking your medical practice
5. Maintaining a smart schedule management
1. Control Costs
To start off, the main sources of expenses for medical practices have traditionally been related to staffing and occupancy cost. If those two variables are kept under control, all other aspects of the practice won’t have a major impact on the bottom line.
That being said, more effort needs to be exerted to control costs. Medical practices often begin with good procedures and policies that govern daily operations- but they don’t last. As clinics get busy and start to grow, what’s practiced by clinical staff versus the written policy often turn out to be quite different. Medical office employees often:
- Fail to accurately verify recorded write-offs
- Fail to properly handle charge reconciliations
It doesn’t take long for complacency to creep in, resulting in lost revenue. So, it’s best to rectify this issue with routine audits to check if policies and procedures are being followed properly by staff members.
2. Listen to Your Patients
If you look at the demographics and psychographics of your patients, you may find that they can vary pretty significantly. Pay attention to each patient interaction to see if you are able to figure out what needs aren't being met by your practice.
Identifying patient needs can create new opportunities to fill gaps in service. Further, patient reviews and complaints should all be noted and immediate action must be taken to remedy the situation.
If you pay attention to review sites, the negative feedback often revolves around practice staff and not the practitioner. These complaints can often be an indicator that there’s a problem with a certain staff member, which is likely impacting patient volume.
So listen to what patients are saying about you and your staff, as it will significantly impact your bottom line.
3. Offer Ancillary Services
As patient experience takes center stage over treatment, ancillary services are increasingly being offered by medical professionals. Still, only one fifth of doctors surveyed by Medscape provided ancillary services.
Doctors have historically been extra cautious about providing new services. As a result, a lot of opportunities are missed during the life cycle of the clinic. However, as reimbursements continue to diminish, more and more doctors have started to take the leap and offer ancillary services.
So who are the practitioners that typically offer ancillary services?
- Anesthesiologists (31%)
- Family practitioners (20%)
- Internists (20%)
- OB/GYNs (19%)
- Orthopedic surgeons (33%)
- Pediatricians (18%)
There’s a wide range of ancillary services that can be offered at clinics. Some of them are suitable for general medical practices while others are better suited for specialty clinics.
Pharmacy Services (Dispensing of Medication)
Every type of medical practice prescribes medications and also handles refill requests. This activity is actually a burden, as staff spends time answering the phone, processing the refill request, and accessing patient files and charts.
Integrating pharmacy services will help the clinic cut costs while adding a new revenue stream. By integrating a pharmacy into your practice, you can also help patients adhere to medication while reducing the liability of unauthorized prescriptions and errors.
Physical therapy can be offered at sports medicine facilities and orthopedic clinics, but there is no reason why they cannot also be offered at a family practice.
There will always be a consistent demand for physical therapy for the elderly population as well as athletes. But, your regular patients may also want to take advantage of it.
When it comes to worker's compensation or opioids treatment, patients will be required to take toxicology tests. These tests play a vital role in establishing a baseline for medication therapies by monitoring the effectiveness of the drug.
If you refer your patients to another facility to get these tests done, the practice won’t financially benefit from this facet of care. By adding toxicology testing services to your practice, you will be adding a continuous revenue stream. Further, you will also be offering one-stop convenience that will enhance the patient experience.
Allergy testing is something that a lot of patients will continue to need in North America. As allergies are the fifth most prevalent disease for minors in America, and at this point, no cure has been found. As a result, there will be a large number of patients who will require ongoing care.
It’s an ideal addition to pediatric clinics, primary care clinics, and dermatology clinics.
Alternative treatments like acupuncture are now a becoming a popular service offered at clinics. Further, other services such as massage, aromatherapy, and meditation or mindfulness training are also increasingly available at family practices.
Alternative treatments usually don’t go hand-in-hand with modern medicine, but that’s slowly changing. As a result, both practitioners and patients will probably be more open to incorporating ancillary services.
Urgent care facilities directly compete with your practice. Patients of urgent care centers get a wide range of minor medical problems diagnosed and treated on their own schedule. As a result, you are losing patients and revenue to the competition.
The typical patient at an urgent care facility will be young, healthy, and inexpensive to treat. So this is a very attractive option to help expand your patient volume, as it will be profitable if they kept coming back to you in the future.
According to a report by UCAA, the typical urgent care clinic had an average of 357 patients per week (at $118 per patient). The average earnings are estimated to be around $2.1 million per year.
If you want to incorporate urgent care into your practice, start by gradually increasing your hours and evaluate the response. The best way to approach it is by adding doctors and nurse practitioners to handle the load during extended hours.
Cosmetic services or med spa services can be a huge cash cow for medical clinics. Cosmetic services are growing in popularity within medical clinics and so far they have been a good source of revenue for practitioners.
However, setting up a med spa will require significant investment as you will have bear advertising costs, capital equipment costs, and space.
Med spas offer cosmetic services such as dermal fillers, laser hair removal, spot removal, Botox, and body contouring. Further, you can also sell cosmetic products such as cleansers, moisturizers, and sunscreens.
One thing to note if you’re thinking of adding cosmetic services is the high prevalence of med spas. It’s a good idea to conduct in-depth research to identify the competition and to see what services are required by patients in the area.
Nutrition counseling takes place in many clinics regardless of whether they’re offering this service. Doctors often advise patients to make changes to their diet and make lifestyle changes to reduce cholesterol and live a healthier life.
As a result, it makes sense to add nutrition counseling services at your practice (as it’s a natural extension of what you are already doing). Further, nutritional advice and weight loss programs can bring a whole new group of patients through the doors.
4. Medical Practice Benchmarks
If you’re measuring how your practice is doing based on past performance alone, you won’t be getting the full picture. Instead, it’s better to benchmark key metrics against regional and specialty benchmarks.
By engaging in this activity, you will be able to identify functions within your practice that are sub par and work toward improving them. This will enable you to optimize your clinic and avoid losing revenue due to inefficiency.
5. Smart Scheduling
Every medical practice is faced with lost revenue due to no-shows and unfilled appointment slots. A clinic’s appointment schedule is its main revenue stream, so it needs to be optimized to reduce instances where revenue could be lost.
One way to optimize scheduling is by moving away from wave scheduling to modified-wave scheduling. With wave scheduling, appointments were scheduled at the top of each hour. Modified wave scheduling, on the other hand, sets two appointments at the hour, one at quarter passed and the other at half passed.
This method will also allow doctors to use the last part of each hour for documentation and follow-up calls. By optimizing the doctors time, patients will also experience enhanced service at the clinic. As patients are happier with more convenient scheduling, satisfaction levels can only rise and promote loyalty (because they no longer have to hang around for 15 minutes to be seen).
By optimizing the doctors time, patients will also experience enhanced service at the clinic.
There is no one size fits all solution to enhance revenue streams for your clinic, but finding the perfect fit shouldn’t be a problem as there are plenty of options. Ancillary services are the most popular option at the moment, but incorporating them is pointless unless there’s cash control, benchmarking, and smart schedule management.
How have you increased revenue at your medical practice? Please share your thoughts and experience in the Comment section below.