Overhead Cost Containment & Reduction Strategies

Transcription

1 Overhead Cost Containment & Reduction Strategies Bruce A. Trickel, CMPE Administrator Albany Internal Medicine (AIM) (229) Cell (618)

2 Business Acumen A common misconception is that medicine is a profession, not a business. Actually it is both! More and more physicians and other healthcare providers are understanding this concept and enacting it in their business plans and models. Get your arms around the big ticket items. Hoard your nickels and dimes (after your certain you have dealt with the big ticket items

3 Today s Learning Objective Identify cost containment and reduction strategies Presentation ideas to physician owners, partners, and or decision makers

4 Don t simply reduce overhead Manage it! If you increase your medical revenue by $1.00, you make $0.50 after overhead. If you reduce expenses by $1.00, you get $1.00.

5 Analyzing Costs and Variances Do you have a BUDGET? - Very few Medical Practices do formal budgets. - Don t need to be detailed, something is better than nothing! - Comparative Analysis -- Industry Benchmarks (MGMA) -- Practice Benchmarks (your own)

6 Budgets and Variance Review at least quarterly if not monthly Is it a revenue problem or cost problem? Separate the two! Some costs are fixed and any change is long term (rent, depreciation, etc.) Other costs are variable and can be addressed faster or almost immediate (staff, benefits, operating, and insurance)

7 Knowing your practice Do you know your average revenue per patient ratio? Total monthly collections Total patient visits = Average revenue per patient Do you know your average cost per patient ratio? Expenses per month* Total patient visits = Average cost per patient Are you using these ratio s to keep a finger on the pulse of your practice? How are each changing over time good or bad? Ideally they should be moving in opposite directions Revenue per patient increasing, cost per patient decreasing!

8 OVERHEAD, THE BIG THREE Occupancy Expenses Operating Expenses Personnel Related Costs (salary & benefits)

9 Group Purchasing Organizations (GPO) Leveraging the purchasing and buying power of a group to obtain significant discounts that you typically can not obtain as a small group on your own. Medical Supplies Vaccines Office Supplies Insurances IT related services and supplies Seamless purchasing efforts

10 GPO s to consider AMERINET HRS PREMIER Healthcare PROVISTA (owned by VHA) ORION IPS Vaccine Group Most vaccines and injectable drugs (see handout for contact information)

11 Occupancy Related Costs Facility Mortgage or Lease Energy Consumption (use and consumption) Janitorial Services (garbage, landscaping, biohazard, disposal of expired drugs and samples, shredding) Repairs / Preventive Maintenance Insurance Taxes

12 Operating Related Costs Medical and Office Supplies Drug (vaccines and other injectable drugs) Credit Card / Bank Service Fees Advertising (Yellow Page) Postage Web Page and Patient Portal Communication and connectivity (phone, internet, TV) Computer / IT Equipment Maintenance Agreements Uniforms Outside Service Agreements / Relationships Fixed Asset Purchases/ Leases Income Tax (minimizing corporate taxes) Depreciation Inventory Control as potential waste

13 Personnel Costs Salary and Wages Overtime Employer Paid Taxes Retirement Plans, profit sharing Education & Training, Uniforms, Travel Vacation & Holidays (accrual) Health, Dental, Life, Disability, Medical Malpractice, and Workers Compensation Insurance Dues & Subscriptions Continuing Education Costs

14 Revenue Opportunities Search for lost revenue (accurately coding, claims resubmission, fee schedule review, reimbursement as comparison to fee schedule ) Aggressively work Wait or Standby lists for appointments (an unfiled appointment is lost revenue) New or Expanding Ancillaries: Imaging, lab, simple office based procedures Look at tests and procedures you are sending out / contract for Renegotiate existing insurance contracts, review your payer mix Are you getting paid what you are contracted for from insurance carriers Add a patient a day to your provider schedules, in a typical practice this can result in $25,000+ additional revenue per year per provider

15 Medicare Part D Have you considered offering patients with Medicare Part D benefits an option to receive certain Part D injectable drugs with your office vs. them filling through a pharmacy? TRANSACTRX Program (see handout for web link) Zostarvax Tdap Prolia Others to numerous to list

16 Presentation to Owners / Partners / Decision Makers Everyone has an interest in raising the quality of care for their patients, that is a given Reality is stake holders / physician owners want to know what the financial impact is Keep your presentation as brief as possible, but make your point Proforma should be a side by side financial impact comparison Talking paper needs to be brief, to the point, use bullet points if possible stake holders don t like to read wordy presentations

17 Presentation continued Have you considered all related costs and revenue? Be clear about both advantages and disadvantages Summarize with your recommendation lead them to the decision you want them to make

18 Questions?