5 Strategies to Help You Squeeze Your Bottom Line in Your Private Practice
By Don Cassano, PT, DPT
For many practicing clinicians/business owners, myself included, our focus tends to be on what makes or breaks the bottom line.
Often being hyper-focused on direct patient care with number of patient visits, units per visit, and reimbursement. While these key performance indicators are important, we became routinely awed by the tremendous gains on budget line items when our company began to focus on maximizing revenue and trimming the fat on every line item on the P&L. Explained differently, we decided to work smarter and not overfocus on KPI’s! These are the areas we continue to monitor and make the necessary adjustments as needed. We make a choice to continue business as usual, weather multiple storms, or even the recent pandemic allowing our numbers to drive our decision making.
The following 5 areas are some important processes to consider when evaluating your bottom line:
1. Is your front office staff estimating co-insurance and well-versed in respective co-pays, knowing deductibles then collecting upfront from patients before each visit?
By implementing this tool, our company’s collections on patient responsibility improved by >40%. We provide and thoroughly review a document with patients which includes their benefit and expected out of pocket responsibility on their first visit. This amount is due and collected upfront prior to being seen by a member of our clinical team. Educating and role playing with staff is vital in order to communicate to patients and handle objections. Those objections revolve around very difficult topics, money and health. We are sensitive to these conversations; however, our team recognizes that if a patient is unwilling to pay upfront, they are likely less willing to pay after the fact. The good news is our patients have learned to expect to pay at the time of service.
2. Does your benefits coordinator provide you with options at your renewal?
After experiencing our third consecutive year of double-digit premium increases, we began a process of renegotiating the employee benefits plan annually. We made a difficult decision to shift from a PPO to an HSA plan, resulting in significant bottom line company savings. To make this a seamless transition for employees and to maintain morale, our company returned 30% of the savings to each employee as an HSA contribution offsetting their high deductible by 50%.
3. Are you re-evaluating your company’s professional liability and property/casualty insurance each year?
Annual premium increases are the norm. Our company solicits three quotes per year regardless if we are anticipating increases in our annual premiums. We reach out to multiple agents versus allowing only one to provide us with multiple plan options. Insurance companies hold us hostage on reimbursement, it is time we hold these companies accountable through aggressive shopping. This should include health, liability, property and casualty insurances.
4. Do you take advantage of buying power through provider network affiliations?
Most folks view these networks as avenues to approach closed contracts and improved reimbursements with insurance companies. Initially, we did too with the thought that if we received three new patients per year by participating in the network that would offset our membership fee for the year. Our company, however, has experienced added benefits with discounts on hard goods such as clinical supplies, reduced cost with outcome measure tools and EMR services through these affiliations. Interview these companies to see who the best fit for your company is!
5. Are you giving consideration to the small, frequently used items that can add up quickly over a 12-month period?
Like many of you, our single private practice location in Central Louisiana experienced some hardship with the pandemic, but we also experienced 10 days loss of revenue due to a business closure that resulted from two hurricanes and an unprecedented ice/snowstorm. These events had our team looking more closely at the costs that we could reduce in the short and long term. Some changes were easier for us to implement than others. As you may know, we are deeply hospitable in the South. Louisiana is home to a 100 plus year old coffee company. Coffee here is about community and fellowship, so it makes sense for us to oblige, however we cut our coffee service for patients resulting in a savings of approximately $400 per month or $4,800 annually. Additionally, our team stepped up to perform deep cleaning and we were able to temporarily cut our janitorial services in half. A dedicated staff member monitors costs of goods on in house supplies for both front of the house and back of the house to ensure we are efficient in spending habits and don’t over order or overpay for supplies. We try to be patrons of local businesses when it’s cost wise and use a more cost-efficient approach to purchases when necessary. This includes utilizing online resources and free delivery options to limit the cost associated with acquiring these supplies.
Being creative and moving forward with eyes wide open during challenging times allowed us to continue to provide our staff with their annual holiday bonuses in 2020, and they have never gone without a regular paycheck. We are incredibly proud to have maintained this metric for 2020 and to date in 2021!
Don Cassano Jr., DPT,OCS is PPS member and co-owner of Elite Physical Therapy in Alexandria La. Elite is Confluent Health Partner. Don can be reached at email@example.com.