Many practice management tips focus on maximizing revenue. Others look to efficient operations (which can maximize revenue) and low overhead. Still others emphasize leveraging all these factors for the best overall quality of patient care. Taking them all into consideration, below are some of the top ways to help ensure your medical practice runs like a well-oiled machine.
1. Be Smart About Your Medical Practice’s Money
Although maintaining a certain amount of liquidity is a good idea, there are ways to put your business funds to work. For example, you might want to open a money market account and link it to your practice checking account for telephone or online transfers. If daily receipts are deposited into the money market account, they will immediately begin earning interest.
Pay attention to accounts receivable (AR). These are, of course, the outstanding monies owed to the practice; but they’re also a measure of how long claims are overdue. Practices need to set a target to keep the aged claims under control. Typically, a high-performing medical practice’s billing is 30 days or less in AR. The average is 40 to 50 days, and 60 days is below average. Work hard to keep it down.
Also, don’t hurry to pay your bills. The idea here isn’t to intentionally miss paying bills on time, but rather to pay bills strategically so your practice can hold on to cash as long as possible. It goes without saying that you shouldn’t jeopardize your business or personal credit rating with late payments. But pay bills when they’re due or just before — not after.
In addition, leasing medical equipment and your medical practice space is typically more cost-effective than buying. However, there’s no one-size-fits-all approach. The right answer may depend on your location, cash flow and business credit. Also, some equipment leases allow practices to buy the asset outright at the end of the lease.
2. Develop a Marketing Mentality for Your Medical Practice
Learning how to “sell yourself” is good advice for anyone running a business (or life in general). To do so, a medical practice must develop a marketing mentality. This means that all aspects of your practice — how you treat patients from first contact to last, as well as ads, online activities and community presence — should have a focus on marketing. It doesn’t necessarily mean “sell, sell, sell at all costs,” but it does mean that everything you do needs to advertise your practice as a place to turn to for high-quality care and service.
Naturally, once you’ve drawn patients to your practice, you want to keep them. In fact, it’s easier and less expensive to retain a patient than to find a new one. So, don’t restrict your marketing efforts to only attracting new patients. Allocate some dollars to maintaining your relationship with existing ones.
3. Culture is Key
What’s distinctive about your practice? Is it your specialty or subspecialty? Is it the layout and décor of your waiting area and exam rooms? Maybe your practice has a reputation for a specific characteristic or set of characteristics — no waits, friendly service, value-added perks. Create a distinguishing culture for your medical practice and develop it into a strength.
Another important aspect of this is your workplace culture. Good, reliable staff members are invaluable. Ensure that the work environment for your employees is upbeat and enjoyable. And, in addition to providing competitive pay and benefits, regularly recognize how important they are and thank them for a job well done.
At the same time, acknowledge that your own time and energy are critical assets and an important part of the culture as well. Practicing medicine can be rewarding, but it can also challenge you mentally, physically and emotionally. Work efficiently, avoid unnecessary distractions — and remember to take time off.
The value of your medical practice is so much greater than a mere sum of its parts. Nonetheless, when you find ways to keep all those parts running smoothly and in harmony, you’ll likely see a stronger bottom line.
Please contact a member of your service team, or contact Kathy Walsh at firstname.lastname@example.org for further discussion.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.