Business Advisory Services

If your practice has too few staff members, patient care may suffer and collections may slow down. If you have too many, you’ll face rising operational costs. Is there an optimal level that will allow you to operate your practice efficiently without letting your costs get out of control and creating dissatisfaction among patients?

Start by using medical industry benchmarks for comparison. Various organizations collect a wide variety of data on staffing levels. You’ll want to compare apples to apples, so it’s important that you use data from practices similar to yours in terms of practice area(s), size, annual revenues, and the number of physicians employed. It’s also important to follow the same methods used in the survey when determining your practice’s numbers for comparison.

Look at These Key Benchmarks

Two benchmarks you should look at are the average number of support staff per full-time-equivalent (FTE) physician and the percentage of gross practice revenue used for support staff salaries. The first benchmark is the number of full-time staff (not including mid-level providers) required to support one full-time physician. The percentage of gross revenue is total staff salary expense divided by gross revenue over the same period.

Be Ready To Adjust

If your physicians see more or fewer patients daily than the average patient load, you’ll likely want to compensate for that difference when you compare your practice with benchmarks. Looking at the number of patient visits per year or week or the gross charges per physician can help you gauge your support staff to FTE physician ratio. Similarly, your practice may require more support staff than a benchmark indicates if your ratio of mid-level providers to physicians is higher than a benchmark survey suggests. By the same token, your need for support staff may be lower if you have no mid-level providers.

Start by using medical industry benchmarks for comparison.

We Can Help

To schedule a complimentary consultation with a CIG Capital Advisors professional, click here.

Article Links:

https://www.medicaleconomics.com/view/making-medicine-better-for-women

https://insidexpress.com/lifestyle/health/the-only-guide-that-make-hiring-for-your-private-medical-practice-easy/

https://www.ama-assn.org/practice-management/private-practices/tips-help-private-practices-lessen-sting-staffing-shortages

images: iStock by Getty Images

The end of the year is a time for reflection. It’s also a chance to apply the lessons of the past going forward. If one of your 2022 goals is to improve the operational, administrative, and financial aspects of your medical practice, here are some ideas you might be able to incorporate in your list of New Year’s resolutions.

Review Current Patient Service Approaches

The delivery of superior patient service takes leadership and commitment to patient needs. You can resolve to use staff meetings and personal example in the coming year to reinforce your practice’s values concerning patient treatment and care.

Superior care translates into high rates of patient satisfaction. Patient surveys have been found to be a particularly effective tool in providing feedback regarding a wide range of patient care and customer service issues.

Monitor Financial Performance Regularly

Tracking your practice’s financial results during the year allows you to identify trends and make changes as needed.

You may want to put a dedicated staff member in charge of focusing on several key indicators or metrics, such as your practice’s collection rate, overhead percentage, and number of office visits. These indicators should be reviewed at regular intervals as the year progresses.

We can help you interpret what the numbers are saying and see the big picture. Staying on top of performance throughout the year can enhance your practice’s financial management.

Improve Collections and Billing

Finding a way to streamline and simplify payment for services rendered may be a goal for your practice in the coming year. One approach that can work to reduce both billing expenses and collection difficulties: Have your receptionist ask for copays before your patients leave your office – or even better, when they arrive.

Ensuring that you bill for all of your hospital services in the coming year is another worthwhile resolution. When you are seeing patients at a hospital, be sure to make a record of your work promptly and transmit the information to your billing staff. Though it’s more efficient to call your billing office immediately after you complete procedures, if that’s not feasible, create electronic or written notes for later use by your billing staff.

Establish a process for following up on unpaid accounts. Make follow-up calls within a certain number of days of when services were provided or when the original bill was due.

Establish a Training Plan

Staff training can pay off in increased productivity, improved morale, and a more efficient operation. Look into what ways your support and administrative staff could benefit from training, seminars, and other educational opportunities. Budget for a specific dollar amount to be spent on staff development each year. Online seminars and training sessions can be a cost-effective alternative.

Plan for Capital Expenditures

As you prepare your budget, identify the equipment you intend to replace and set priorities for the systems and technologies your practice will need going forward. Determine what, if any, areas in your current facility need to be remodeled or expanded.

Preparing a detailed plan with a very specific timetable for achieving goals can help you clarify what needs to be done to keep your practice competitive.

We can help identify and prioritize the measures that will help your practice run more efficiently in the coming year. Please contact us for assistance.

Finding a way to streamline and simplify payment for services rendered may be a goal for your practice in the coming year.

images: iStock by Getty Images

Given the physical and emotional demands of their profession, it’s little wonder that some physicians look forward to retirement. However, many other doctors nearing retirement age are reluctant to turn their backs completely on their profession and would rather find a way to ease into retirement.

What should you do if retirement is on the horizon, but you would prefer to transition gradually into retirement by working part-time? Here are some things to consider if you are thinking of cutting back on your work hours.

Review Your Finances

First off, determine if you can afford the reduction in earnings that reducing your work hours will entail. Pay particular attention to any debt you are carrying (mortgages, etc.). Ideally, you don’t want to be overly burdened with debt once you are no longer practicing full-time.

A review of your current net worth can give you a clearer picture of your overall financial standing. Net worth takes into account the value of all your assets as well as your outstanding liabilities.

If you’ve been funding a tax-favored retirement plan, hopefully you have accumulated sufficient assets to provide a steady stream of income for all the years you may be retired. If you still haven’t met your goal, you’ll want to determine if your earnings from part-time work will allow you to comfortably continue adding contributions to your retirement plan. You’ll also want to determine when you can start taking penalty-free withdrawals from your plan(s) and project what your tax situation will look like. These are all issues we can help you assess.

Look at Your Options

If you are part of a multi-physician practice, talk to your colleagues about what arrangements can be made for you to start cutting back your hours. You may need to revise your practice agreement to incorporate a new compensation arrangement. Typically, such arrangements are based on the productivity of the part-time physician less a share of practice overhead expenses.

If you are a solo practitioner, you may find it hard to practice part-time without creating problems with your current patient base. Patients may feel that you can’t deliver the type of patient care they expect if you are practicing part-time. Bringing in a physician assistant may be helpful. However, recruiting another physician who would eventually take over the practice may be the most effective route for solo practitioners.

Give careful consideration to the financial arrangements you make with the new physician. When it comes time to sell, you’ll want to have a formal purchase agreement that outlines all of the rights, obligations, and responsibilities of the buyer(s) and the seller. It should also include a valuation of the practice.

Consider Malpractice Insurance

Don’t ignore the issue of malpractice insurance when you are weighing the pros and cons of going part-time. You need to be certain you will be covered during your part-time years and after you stop practicing completely. “Tail coverage” can protect you against any malpractice claims that may be filed against you after you retire.

We Can Help with Retirement Planning

Whether you are serious about transitioning to part-time work or are simply exploring your options, be sure to consult with us. We can help you run the numbers and evaluate your financial preparedness for retirement.

If you are part of a multi-physician practice, talk to your colleagues about what arrangements can be made for you to start cutting back your hours.

To schedule a complimentary consultation with a CIG Capital Advisors professional, click here. 

images: iStock by Getty Images

Providers exit their practices for a variety of reasons — dissatisfaction with the demands of running a business, the desire for a less strenuous work schedule, frustration with insurers, retirement. If you are thinking about exiting your practice, there are several steps you should take now that will help you maximize the purchase price and ensure a relatively smooth transaction.

Lay the Groundwork

Start by taking a critical look at your practice’s current financial condition. Identify areas of weakness. For example, does your practice experience poor collections or weak cash flow? How do your staffing levels compare to those of similar practices? Issues such as these can reduce the appeal of your practice. It’s to your benefit to deal with them well before you put your practice on the market.

You’ll want to have a realistic appraisal of your practice’s potential worth before you put it up for sale. Tangible assets, such as health care equipment, computers, and furniture, are relatively easy to value, though they generally make up only a small part of a health care practice’s total value. Goodwill is an intangible asset that can be difficult to value. But there are methods that can be used to establish a reasonable estimate. Some other widely used methods include the discounted cash flows and market multiples methods.

Identify Potential Buyers

You may receive an unsolicited offer. If you don’t, consider reaching out locally or contacting a broker who specializes in exiting health care practices. An experienced broker can identify and contact qualified potential buyers.

The speed with which a sale may occur will largely depend on the deal you’re seeking. Do you want a buy-out that will let you continue to practice as an employee? In that case, looking for a group practice, hospital, or other corporate buyer may be the best route. If the sale goes through to one of these entities, you will be able to continue to work in health care without the responsibilities of ownership.

If retirement is your goal, you may opt for a gradual buy-in by a provider who will take over your practice. Typically, this arrangement requires you to employ the prospective buyer and, under the terms of the deal, after a trial period of a year or two, offer a partnership with a documented exit arrangement for you. This arrangement could be in the form of a severance package.

Review All Offers Carefully

If you receive an offer, your focus should be on the would-be buyer’s financial condition and the payment terms if you plan on retiring. If you plan to continue working at the practice with the individual or entity who may buy it, you should carefully review all ramifications, including transfer expenses and malpractice terms involved in the sale.

Apart from satisfying yourself about the financial and legal issues involved in the sale, you should also feel that you will be able to fit into the potential buyer’s organization and that your advice and input will be welcomed.

Remember, whatever way your practice’s sale is structured, there will be tax implications. Let us help you secure the most tax-advantageous sale terms. Please contact us if you would like assistance.

The speed with which a sale may occur will largely depend on the deal you’re seeking.

We Can Help

To schedule a complimentary consultation with a CIG Capital Advisors professional, click here.

Dental tools photo: Succo/Pixabay

Stethoscope photo: Julio César Velásquez Mejía/Pixabay

Improving operational efficiencies should be an ongoing process for all medical practices. Reevaluating and examining existing procedures can help identify areas of weakness that can drain revenues and increase costs, lowering the bottom line. The following suggestions may help jump-start your own thoughts about ways you can maximize your practice’s revenue stream and reduce costs without sacrificing patient care.

Keep Coding Current

Miscoding is expensive: It can reduce reimbursements and cause delays or denied claims. Miscodes are often due to old data, under coding to avoid penalty risk, or leaving coding decisions to inexperienced support staff.

For more accurate coding, maintain updated coding manuals and software, keep a code reference summary handy in exam rooms, and use online coding resources. If you make notes during each patient visit, you’ll be able to bill more accurately. Taking coding refresher courses will help your staff stay current with coding practices.

Finally, periodic assessments of your practice’s coding accuracy can help uncover problem areas. These assessments could include a review of your practice’s forms and a comparison of billing codes with the actual services that were provided.

Improve Employee Productivity

Consider these ideas for improving productivity:

• • • Set productivity goals and offer incentives to your staff for reaching those goals
    • Delegate administrative functions (ensure that physicians spend most of their day doing only what physicians can do)
    • Plan patient flow so that physician and medical assistant billable time is maximized

Exercise More Efficient Control over Staff Time

It is often possible to trim overtime expenses without reducing the quality of patient care. Start by reviewing the payroll records of your non-exempt employees to determine who worked overtime and why. Find out if your practice was fully staffed and simply busy or if it was short one or more employees on the days when the overtime occurred. If overtime was necessary because you were short-staffed, see if this was due to vacations or some other controllable situation. It may be time to revise your practice’s policy on vacation time if scheduled time off was the cause of the jump in overtime.

Update Fee Schedules

Patients can be price conscious and resistant to fee increases. Nevertheless, if your practice hasn’t raised fees in some time, you may want to consider appropriate increases. In addition, you should periodically examine the reimbursement rates of all the plans you participate with and reevaluate whether it makes economic sense to continue accepting patients from some of the ones that reimburse poorly.

Improve Your Purchasing Practices

Medical and office supplies can be a significant part of a practice’s expenses. Busy practices may take the path of least resistance and continue ordering from the vendors that have always supplied them. That can be an expensive mistake. Choose several of your practice’s “high-volume” items and find out how much other vendors are charging. Use that information to negotiate lower prices with your current suppliers, consolidate orders with fewer vendors, or switch to new suppliers to save money.

We Can Help

We can help you identify areas where streamlining operations may help optimize your practice’s bottom line. Please call.

. . . if your practice hasn’t raised fees in some time, you may want to consider appropriate increases.

To schedule a complimentary consultation with a CIG Capital Advisors professional, click here.

Photo: Daniel Sone/Unsplash