How to drive revenue growth in your medical practice
The challenges to sustaining a successful medical practice are numerous—declining reimbursements, government regulations, and third-party interference, among others, all play a role. But even in the face of these obstacles, many practices continue to hold their own financially. When asked about the financial state of their practice as part of the Medical Economics 2019 Physician Report, 22 percent of respondents said their practice is doing better than a year ago, 52 percent are doing about the same, and 26 percent are doing worse.
Once physicians know where to focus their efforts, financial improvements can often be generated by increasing staffing, improving productivity, embracing value-based care, or renegotiating payer contracts.
Add staff to increase patient capacity
Adding staff can increase patient capacity. And while it means higher operating costs, in many cases, the extra help pays for itself in multiple ways. Sterling Ransone, MD, FAAFP, a family physician in Deltaville, Va., had reached a point where he couldn’t see any more patients in a day. When he couldn’t find another physician willing to relocate to the area, he opted to hire a nurse practitioner instead. Now, he is able to focus on more of the chronically ill patients who require complex care.
Experts say there are often pockets of wasted time in a physician’s schedule or inefficiencies in how patients flow through the practice. Eliminating these means more patients can be seen during the workday.
As an example, an optimal design for a practice with four exam rooms is two rooms across from each other, not four in a line. That cuts down the amount of time the doctor spends going from room to room. The layout should also help patients navigate their way back to the front desk without the need for an escort, so the doctor can quickly move on to the next patient, says Brooks.
Increase revenue with value-based contracts
As Medicare and private payers continue to incentivize value-based care, experts say physicians need to understand how these contracts can benefit their practice. “If you have Medicare patients, you have the ability to gather information right now on some of the value-based principles and measures Medicare is looking at,” says Zetter.
Assemble the information and compare it to similar practices to evaluate practice performance. Then go to each payer and ask if they have any quality-based incentives appropriate for the practice.
When potential earnings have been determined, practices can make a return-on-investment calculation based on how much work is required to collect and report the data. “If it makes sense, go ahead and sign up, because you might be able to earn several thousand dollars a quarter, with no cost to sign up,” says Zetter.
Negotiate better payer contracts
Physicians who think they can’t negotiate better payer contracts are usually wrong, says Zetter, but it takes preparation. “Everybody can negotiate. Many people don’t because they don’t think they have any leverage,” he says.
Leverage starts with understanding the value the practice offers the payer. Ballou-Nelson says practices have to evaluate their patient data so they can tell a story about what they bring to the payer, pointing out how they excel in areas that the payer values.