Article

7 Ways to Increase Profits

April 3, 2023
Physicians office front desk with patients and doctor
Non-acute healthcare facilities may feel like they’re doing everything right and following industry best practices, but they’re still not achieving their profit margin targets. To overcome that hurdle, they can make changes to their operations or work with outside help, like a consultant.

It’s worth noting that in some cases, improving profitability requires trade offs. For example, extending office hours for more patient visits brings in more revenue, but it also means staff must work longer hours or the facility will need to hire additional part-time or full-time staff. Physician office decision-makers must consider all criteria when striking a balance between a heavier workload or investing in new resources and bringing in more money.

Organizations ready to boost profitability should consider these seven ways to increase medical practice revenue:

1. HAVE A STANDBY LIST OF PATIENTS

No-shows are an expensive problem for physician offices. A commonly cited study from a few years ago claimed the U.S. healthcare system loses $150 billion annually due to missed appointments—and there’s no data to suggest those huge losses are decreasing. Facilities can take measures to avoid losing income because of no-shows and late cancellations by modernizing their patient booking strategy, charging patients for missed appointments or creating a patient list for standby appointments.

To create the standby list, clinics should identify which patients can quickly fill in for no-shows and last-minute cancellations, then contact them when there’s a sudden opening. Having the list prevents gaps in appointments to ensure a full schedule, which allows facilities to bill for a full day of patient visits. The standby list should be periodically updated to reflect changes in patients’ availability.

2. EXTEND OFFICE HOURS TO SEE MORE PATIENTS

Longer hours allow physicians to provide care to more patients, which translates into more revenue. Facilities can offer extended hours one or more days a week to meet the needs of patients who have difficulty coming to daytime appointments due to their work schedules or a lack of transportation. Clinics can also consider being open on some or all Saturdays.
 
Extended office hours can be more patient-friendly, offering greater flexibility for scheduling. Offices see a three-fold benefit:

  1.  The ability to deliver care to more patients each week
  2. A higher number of billable appointments
  3. Greater patient satisfaction by meeting their schedules.

However, offering expanded hours requires an investment from the facility. Offices must provide the staffing resources needed to accommodate the new hours.

3. ENCOURAGE PATIENTS TO REFER FRIENDS AND FAMILY

Established facilities with good reputations and a history of providing quality care have built a loyal base of patients. Non-acute providers can gain new patients by asking their current ones to recommend the clinic to family members, friends and their social network.
“Referrals are the second easiest way to increase patient volumes, next to making sure that you retain existing patients,” according to Sequence Health.  
Referrals are effective because people are likely to trust a friend or family member over a stranger’s online review. This is especially true if the person is experiencing the same medical issues as their friend or family member.

4. SHIFT FROM PAPER TO DIGITAL PROCESSES

“Digital transformation” is a buzz term across industries, and for good reason. Digital processes improve operational efficiencies, leading to time and money savings. Moving from labor-intensive spreadsheets and paper processes to digital is just one way facilities can accelerate their digital transformation and modernization efforts.
While a shift to digital requires an upfront investment in new technology, it provides long-term savings and benefits. For example, switching from paper medical records to electronic health records is a common upgrade for non-acute facilities. The upgrade optimizes digitization to drive bottom-line efficiencies through easier record sharing and faster access to current, accurate and complete records.

5. OFFER ANCILLARY SERVICES THAT ADD NEW REVENUE STREAMS

These services expand a facility’s offerings, such as providing sleep management, an in-house lab, allergy testing or weight loss services. Facilities may have to increase staff size or bring in new expertise to provide the necessary resources and skill sets, but organizations can increase their revenues.
Provista offers contracts to support ancillary services, which can bring in more money and grow the business. Additional services that facilities can offer include genetic testing, mobile diagnostic services, chiropractic services and speech therapy.

“Once healthcare facilities implement changes, the increased revenue is sustainable, which can help clinics maintain higher profit margins on an ongoing basis. ”

6. CONSIDER HIRING A CONSULTANT

Sometimes a facility has accomplished everything the staff knows how to do, but the profit margin isn’t changing. Other times, employees are used to the way the facility has always operated and don’t have the expertise to implement changes that grow revenue.

By working with an outside consultant, facilities can explore ways to tap into new revenue sources or implement process improvements. A consultant can review the day-to-day operations of the practice and talk to stakeholders, then recommend improvements to increase profits. Facilities can find reputable non-acute healthcare consultants by working with their group purchasing organization (GPO) to explore such services as IT, financial, marketing and HR consulting.

7. TAKE ADVANTAGE OF PURCHASED SERVICES

Outsourcing tasks to third-party vendors that offer purchased services can augment current staff to handle specific jobs or assist when workloads increase. The services, which can be more cost-effective than hiring additional staff, enable facilities to cover gaps in their business and also meet clinical needs. And by only paying for services when they’re needed, facilities can better control expenses.

Purchased services are fee for service but allow healthcare facilities to bring experts into the office to help improve the business. For example, purchased services contracts can be used to hire financial consultants to help with current and future needs, determine the best way to finance new purchases, like capital equipment, and manage cash flow to avoid shortfalls. Additional services include clinical and workforce staffing, freight management, IT software, and hardware and services as well as web and digital advertising. 

SMALL IMPROVEMENTS CAN LEAD TO BIG RESULTS

Making seemingly small adjustments to the business can sometimes result in significantly higher profits. For example, if a doctor typically has three to four patient appointments per hour, staying open an extra three hours one day per week allows the facility to see up to 12 more patients that day.
 
Facilities can also talk to their GPOs for expert insights and advice. For instance, Provista can connect physician clinics to the best prices and terms on contracts, services and solutions in the industry, therefore helping them increase profitability and operational efficiencies. Once healthcare facilities implement changes, the increased revenue is sustainable, which can help clinics maintain higher profit margins on an ongoing basis.

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