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Practicing Smart Business
For more than 60 years, we have been in the business of creating client success stories. Whether it’s uncovering hidden revenue streams or cutting out the fat from unnecessary overhead costs, every case study is a story in practicing smart business and maximizing profitability.
Practice Profit (click here to review newsletters linked to this topic)
- In one otolaryngology practice, we proposed a modified wave scheduling system enabling each doctor to see an additional 20-24 patients a week. At an average $60 per patient encounter, that was $60,000 annually for each doctor.
- In a busy ob-gyn practice, we found a doctor was significantly over-utilizing CPT code 99211, which is really a nursing code rather than a doctor’s code. With minimal documentation, most of those visits would likely be coded as 99212, which would gain them approximately $15 more than each lower level visit. This recommendation, along with other coding changes, resulted in additional practice revenue of more than $83,000.
- We worked with two internists let go by their institutional employer in helping them set reasonable production levels, adequate staffing, and effective office systems, enabling each of them to realize $17,000 higher profit than their previous employment.
- After one partner in a busy family practice retired and another terminated, we helped them find the right size and increased doctor compensation. We recommended that they add a nurse practitioner to help handle patient volume, resulting in a 12% increase in practice revenue, along with a 23% increase in annual shareholder salaries.
- A three-doctor gastroenterology group we reviewed was realizing $61,000 less than similar area practices. Their cramped office space lacked sufficient exam rooms, and their limited staff was unable to provide proper clinical support. We suggested using modified wave scheduling techniques and the addition of a "roomer" to move patients more efficiently, putting them on track to realize increased profit.
- In a busy two-doctor internal medicine practice, we noted the RN was charging many 99211 office visits, and medical assistants were handling numerous phone questions at no charge. We recommended adding a physician assistant so the full range of office visit codes can be charged while the doctors concentrate on more complex visits, resulting in more than $40,000 additional annual practice profit.
Overhead Reductions
- Our recommendation to switch from a traditional health insurance policy with prescription benefits to a Health Reimbursement Arrangement with Rx benefits yielded savings of 34% for a solo family physician, covering himself, his family, and one single employee.
- In reviewing a growing cardiology practice, we found their insurance clerk wasn’t using their computer system as efficiently as possible, severely impacting collection efficiency. Our recommendations for refining systems and procedures with the billing staff enabled them to collect an additional $50,000 during the next year.
- We found the retirement plan formula for two pulmonologists allowed them to shelter a total of only $51,000 instead of the maximum $82,000, while Social Security integration could reduce employee funding costs by 80%.
Improved Collections (click here to review newsletters linked to this topic)
- A family practice had accounts receivable much higher than statistics when we compared their numbers with our database for their specialty. We recommended a computer program that interfaced with their practice software to cross-match CPT and ICD codes before submitting claims, thus greatly increasing their accuracy while reducing receivables by $15,000 in just a few months.
- Our review of a busy primary care practice revealed that practice accounts receivable equaled 3.65 months of charges, much higher than statistical standards. Our recommendation for more consistent follow-up, including adoption of our Special Letter system, has resulted in their collecting from very old accounts an additional $34,000 in the first eight months. Through our continued monitoring of the staff’s handling of a new practice financial policy, as well as other recommendations, we projected an increase of total 2004 profit by 35%, much of which would be tax-free by increased sheltering in a newly revised retirement plan.
Staff Productivity (click here to review newsletters linked to this topic)
- In a recent family practice review, we found the receptionist wasn’t booking appointments after 3:45 p.m. for her personal convenience, impacting both the doctor’s and the nurse practitioner’s productivity.
- Our recommendation to hire a physician assistant who could charge the full range of CPT codes resulted in $45,000 increased practice profit for a 2-doctor urology practice.
- We found the business office was understaffed in a urology practice, with little space to work on collection follow up. We designated an area for a private work station, assigned employees specific times to pursue uninterrupted account follow up, and outlined how to run selected computer reports to effectively monitor specific categories of receivables, enabling them to achieve an additional profit of $75,000.
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