Okay, so that got your attention.
But there is some logic to the title.
You see, most medical professionals who do not run a medical practice think that medical practices make a pot load of money. Reality is some do. But most make average incomes at best.
This means that it is not unusual for medical practice owners to sit around a table with me asking how more money can be made and asking what expenses can be cut. And everything goes on the table, including my fees.
And sometimes that is like saying we want to solve a $50,000 overdraft by electing to not go to the hairdresser. Yes, you will save a few $$ but that $50,000 overdraft will still be $50,000 and at best you will look like Shaggy in Scooby Doo.
Here is the reality if you own a medical practice
• 60-70% of your costs relate to contracting doctors.
• 17% to 25% relate to admin and nurse costs
• Your rent costs will be about 5%
And that’s before we get to any other costs which typically are about 5%.
So, if you concentrate on the reducing the 5% of other costs its going to be a bit like solving a $50,000 personal overdraft by electing to not go to the hairdresser.
The alternative?
You need to concentrate on a few things that will make a massive difference to your bottom line.
- Pathology – there are still many medical practices that do not have any pathology income. I appreciate this is a not as good as it once used to be but this is additional income so is a no brainer
- PIP and NPIP income – many practices would not be able to survive without this.
- Who is doing the work and who is getting paid? This is very interesting question because some practices are paying medical professionals 60%-70% for health plans when most of the work is being done by the nurse. If a doctor spends only 15 minutes with the patient, is it fair that they receive the majority of the income?
- Grab the low-lying fruit! Your patient database is full of money. You just need to grab it. There are many medical practice software systems that can be integrated such as KPeyes and Cubiko which can tell you how to create more income. Use them.
Automate and use technology – you want your team to become efficient and remove routine admin work. Train them to think about practice income.
