Is your medical centre leaking money?
Several factors can lead to a medical practice losing money, yet don’t think for one moment that your medical practice is different from any other. If you do not have robust systems in place for every aspect of your medical practice, you will be losing money.
Below are a few ideas to help shore up those leaks that may have financial consequences for your medical practice.
Successful small businesses rely on accurate and timely market intelligence to stay ahead of the game.
A medical industry report will give you an understanding of what is driving success in your industry and how you can apply this to your medical centre. You can make better, more informed decisions about where you are heading.
A benchmarking report will provide you with an overview of general practice, average results grouped by key ranges, examples being turnover, profit, location etc.
The report will also give you improvement strategies which will help your practice business plan for the future. A benchmark report is an excellent tool also to assist a medical practice in motivating staff.
Check your billings daily
A practice management study revealed that doctors and staff were not charging the current item numbers or just forgetting to bill the client. For example, a doctor and a nurse would see a patient, but the nurse did not charge for diagnostics, that is they did not add in item numbers for items such as ECG and Spirometries. Doctors were also charging standard item numbers for consultations regardless of the duration of the appointment.
It is up to the doctor to make sure Medicare items numbers are charged for correctly. Hence, general practitioners should look at their billings daily. The calculated loss at this practice was approximately $60 per session for a five doctor practice. Averaged out over two weeks, the estimated loss was $ 156,000 per annum. I don’t know any medical practice that can afford a loss of this magnitude.
In summary, check your financial day sheet and ensure proper training of staff in using correct billing procedures. Even though it is up to the General Practitioner to use correct item numbers, well-trained staff can check for any mistakes.
Report on your practice
I’m always amazed by how many practices lack a regular financial reporting system. It is essential with any business that you check how your business is going every single month.
I don’t mean just printing out a profit and loss, but rather, analysing every single part of your practices finance. Reports could include;
- Fees per month per doctor
- Number of patients seen per month
- Average fees per patient
- Number of no show and vacant appointments
- The lost income per month that comes from incorrect billing or missed appointments
- GP Chronic Disease Management appointments
Financial reporting can help you analyse the practice peaks and troughs and identify the weaknesses and strengths of the practice.
Collect private and Workcover fees
A recent practice audit identified over $60,000, which was not collected. The amounts consisted of Medicare batches from past locums, uncollected private fees and WorkCover fees. We were only able to collect, 70% of these fees because patients had moved, and as some of the Medicare batches were so old, they were unable to be claimed.
So as the old saying goes about profitability, it doesn’t matter how much money you make, but how much you keep. In medical practice, it is easy to lose money to patients who are not paying on the day or do not have clear payment plans in place.
When it comes to providing medical treatment to your patients, doctors always have a process. The same approach should apply for financial collections within a medical practice.
Medical Receptionists should explain the billing policy each time the patient makes an appointment. If you have an online appointment system, make sure the details are on the website. Ensure patients bring along their healthcare cards, pension and DVA cards. Each time the patient visits the practice, it is necessary to check those cards. Sometimes patients are no longer eligible to be bulk billed, for example, their healthcare card as expired. If a patient owes money, make sure the patient understands there is an outstanding payment before they return to the centre.
A practice should have a clearly defined system for collecting fees and the practice manager, or the senior medical receptionist should allocate time to do this regularly.
Focus on keeping Urgent Care Patients
As urgent care and “retail” centres become more popular, many doctors find themselves seeing fewer appointments for low-level health problems. While this can free up more one-on-one time with your
chronic condition patients, it can also lead to your medical practice losing money.
To do this, let your offerings be known in your marketing and on your practice website. If patients are aware that you will see urgent care or walk-in appointments, they are more likely to choose your practice.
Some patients are taking up TeleHealth services offered on the internet. An at-home virtual appointment is attractive to patients with acute or minimal health issues. Best of all, many of these patients are willing to pay out of pocket for the TeleHealth services. Don’t be surprised if your patients say they are consulting TeleHealth providers when your medical centre is not available.
Do a health check on your marketing strategy
At least twice a year, you should review your overall medical practice marketing strategy.
That includes your medical practice website content, social media pages, your email and direct mail marketing, and any print marketing or signage you have. Make sure office hours and services are listed clearly, and that your seasonal promotions are up-to-date.
Ask new patients how they found your practice, with a questionnaire on your patient registration form. Doing so can help keep track of what marketing is working and which areas need improvement.
For paid advertising campaigns like Google Ads or Facebook Ads, assess your spend and the return on that investment. Can you track the effect of these ads on website traffic or the number of phone calls?
Do you have an enquiry form on your website from which you can start to build a client email database? With the use of eNewsletter, another avenue is then available to deliver information, such as new doctors and treatment services.
Follow Up Patients
As part of our financial reporting for medical centres, we calculate the loss of feeds associated with missed appointments. When we started managing one practice, we had a loss of approximately $2500 per month in a four GP practice.
As a strategy to improve cancellations, we advertised the number of missed appointments to patients. If a patient complained there were no appointments available, then those missed appointments that could have been taken by other patients were highlighted. The advertising was a success as patients were more aware of the consequences of missing doctors appointments, and with it, the loss of income decreased.
When patients reschedule, cancel at the last minute, or do not show up, it creates a loss in revenue. Patient follow-ups are essential, and it’s up to the medical practice team to ensure there is a process in place for follow-ups. Most medical software packages now have reminder systems, and online appointment systems also send reminders.
Monetise After Hours
Often the time away from the medical practice is the exact time when patients need help. Rather than visiting urgent care or emergency, they may prefer to speak with their trusted general practitioner.
You can approach this in several ways, including extending office hours on certain days of the week and having an after-hours roster for doctors. After-hours clinics are popular with people who can’t visit the practice during the day because of work, so even extending your practice hours a couple of hours each week can increase income. After hours for just a couple of hours per week can also introduce new patients to a practice.
All of these options enable the one thing that patients value most: access to their doctor and the support they need when they need it.
And finally….. IT
How much time do you and your staff waste on a poor quality IT system or telephones? Not only is it frustrating, but it can cause an enormous waste of staff time and wages. Start making a log of all IT issues, challenge your IT company and ensure you have a network that suits your practice – not one that suits your IT company.
A recent practice study revealed that doctors and staff wasted approximately 10-15 hours per month on IT issues. Not only did this accumulate unnecessary staff wages, but it also increased IT support hours, which can become expensive very quickly.
Most of the time, similar IT issues will happen. Changing IT companies can sometimes feel the same as changing a mortgage, however making sure that your IT works for you can save your practice thousands of dollars per year. Invite your IT company to visit the practice regularly, discuss the issues and make your IT company responsible. It is not acceptable that the same problems continually arise. Having staff to log all IT issues will ensure an accurate record of what is happening.
These basics tips will help you to slow down the medical practice losing money be it an existing medical centre or a new practice setup. If done correctly, and tracked with benchmarking, this can help to turn around an unprofitable medical practice.
It may also create positivity and a renewed excitement about owning your own business – because that is what general practice is – a business!