Given our country’s limping economy, having an effective cost management plan for your medical practice is crucial to keeping your doors open. This article offers guidance on how to accomplish this without sacrificing quality of care to your patients. A practice has several overhead costs that can be broken down into direct costs & fixed/variable costs. As you know, direct costs are those related to taking care of your patients (employees and equipment). Instead of just cutting overtime for your staff right off the bat, assess your employees to see if you have the right people in place to make your practice successful. Sometimes, overtime results from inefficiencies and improper staff members. By evaluating staff performance, you might find “dead weight” that contributes to overtime costs because others are taking up the slack.
Fixed costs are ones that remain the same regardless of the number of patients seen; they include rent, insurance, etc. The author suggests you review any contracts prior to renewal and ask vendors about any incentives or rebates for business loyalty. Sometimes companies will offer incentives in the form of discounts, added benefits or features, or better payment terms to encourage your renewal.
Finally, variable costs rise and fall depending on the number of providers and/or patients in your practice. One variable cost with huge budgetary implications is medical supplies. Assess your medical supply use and inventory levels to assure just-in-time ordering and minimize dollars that “sit on the shelf.” Check out the article for other ways to manage your overhead and have a thriving business.