I talk often of the hospital side of the equation when it comes to optimizing finances, but what about other providers such as medical groups and small practices?
When it comes to jobs, doctors are in the proverbial catbird seat even in these tough economic times. Unlike attorneys, every single newly minted physician can expect full employment at a six-figure position once they complete their residencies. I can only think of two clinicians in my years writing about healthcare who have experienced joblessness: Jack Kevorkian and Michael Swango, both for obvious, although slightly different reasons.
Nevertheless, physicians must run their practices like businesses if they want to stay afloat. For many, the days of the new Cadillacs every year and the country club memberships are long gone.
In fact, many practices are missing the boat when it comes to uncaptured revenues. So says Kevin Weinstein of Louisville, Ky.-based ZirMed. "These monies not only are earned, but also can often make the difference in the health and vitality of a medical practice," he said.
I spoke with Weinstein recently about how practices can optimize cashflow. His advice easily translates to hospital coffers as well. (For even more suggestions, see our own FiercePracticeManagement special report "Patient collections: 7 Fierce strategies for getting paid.")
Among Weinstein's suggestions:
- Focus diligently on eligibility verification. There are constant changes in insurance coverage, deductibles and patient co-payments, and a lot of patients with high deductible plans may owe far more than you might expect.
- Be flexible regarding payments. Grocery stores once only accepted checks or cash; but in the past 20 years most customers have migrated to paying with credit or debit cards. Not only is the act of sliding a card more likely to make it palatable to a patient to make a significant co-payment at the time of treatment, you can also arrange automatic payments if need be. In addition to asking for payment as the patient arrives, estimate the patient's responsibility beforehand and get up-front authorization to charge his or her credit card within a range of that estimate. And, if you have the resources, give patients the option of paying online.
- Improve claims management. Getting claims in quickly and without errors is a great way to improve cash flow. If it's approached correctly, it can also improve the morale of back office staff.
- Perform claims analysis. If you clearly understand why claims are rejected, you can resubmit them and get paid. "Managing denials effectively is a process of both analysis and prevention. If it's found that claims are repeatedly being denied because services were rendered after patients' coverages were terminated, for example, there may be a weakness at the front desk," Weinstein said.
- Ramp up patient collections. Twenty percent of office revenues come from patient co-pays--yet most practices only collect 60 percent of those fees, according to a recent Medical Group Management Association survey. That means the average practice is leaving 8 percent of its total annual revenue on the table. For a practice grossing $1 million a year, that's $80,000--more than enough to install an EHR system, or even pay key staff a generous holiday bonus.
Weinstein does note that the key to implementing such changes is to keep them patient-friendly--make your patients feel as if you're making the changes for their convenience rather than your own.
"You can avoid risk, collect a greater share of the payments owed you and ultimately, improve your viability as a valued healthcare provider," he said. -- Ron