Practice efficiency is tied to practice profitability — and it can help physicians and staff members continue to provide good health care over time. This article lists five specific ways physicians can improve the efficiency of their medical practices, such as ensuring payments and billing are accurate on an ongoing basis and monitoring key performance indicators to evaluate whether any areas need to be improved.
5 ways to improve practice efficiency
The area of work efficiency is rife with adages such as “work smarter, not harder” and “arrive early, leave late.” And while certainly meaning well, these sayings are pretty vague. Here are five specific ways you can improve the efficiency of your medical practice:
1. Get paid for what you do. Obviously, you should make sure you get paid for the services you perform and for whatever chargeable items you dispense. But this applies to everything — from co-pays to various third-party payers, whether insurers or Medicare/Medicaid. Verify that all payers are remitting the full amounts they’re supposed to be paying. Of course, you need to ensure you’re billing appropriately, too.
2. Staff appropriately. The rule of thumb for staffing is to have three to four staff members for each physician, combined in the front and back offices. Some variation to this rule based on specialty areas may exist, but the advice remains: Make sure you have enough staff to maintain efficient, effective care; patient flow; and cycle time. Don’t just hire the right number of people — define their roles, train them properly and clarify your expectations.
3. Cut costs. Physicians are often encouraged to see an increasing number of patients, jamming in as many as possible in a day to improve revenue. But many find it’s easier to cut costs instead. How? Evaluate your overhead. Is your practice site bigger or more expensive than you need? Do you have too many staff? Are you spending money on services or equipment you don’t need or that’s underused?
4. Monitor key performance indicators. These are analytical ways of evaluating how your medical practice is doing. Most of them (though not all) deal with revenue collection. They include monthly charges, monthly collections, new patients, total patient visits, accounts receivable, per-visit value, net collection ratio and first-pass denial rate. While there are other metrics that can be monitored, these are eight of the most important ones.
5. Practice your best medicine. In the current health care environment, it’s easy to get sucked into a vortex where practicing medicine seems secondary to running the business. But practicing medicine at the highest level possible will not only allow you to stay operational, but also increase the likelihood that you’ll turn a profit. So, be sure providing high-quality health care to your patients is always your No. 1 priority. A strong reputation and solid patient base should then afford you the time to look for sensible, practical ways to improve efficiency.