How An Ideal Medical Practice Optimizes Revenue
While running a medical practice, sometimes the biggest challenge is to balance the need to earn a living against the amount of time spent helping people.
How do you make it so that a doctor has adequate time to spend with patients but the overall practice does not suffer financially for it?
This is where creating an ideal medical practice comes in.
An ideal medical practice is focused on patient-centered, high-quality healthcare that cares for patients while maintaining a commensurate level of profitability.
A less-than-ideal practice may have one of two operational scenarios: one, the practice may see few patients and experience low revenues, or two, the practice may see many patients and have significant revenues but suffer from issues such as high patient churn rate (patients going elsewhere for medical attention after the first visit), high overheads, burnt out staff, etc.
In both scenarios, revenue optimization is not addressed and because of this both arrangements lose out in the long run. To understand better the mechanics of an ideal medical practice, let’s delve into the details.
Overhead will kill any business when expenses outstrip income cash flow. This is no different for medical practices that must grapple with staffing costs, technology costs and rental/office related costs. For instance, when it comes to technology, your practice may be utilizing technology that is too expensive when correlated to ROI. So while you may be paying a few thousand dollars for your technology, that tech isn’t translating into productivity and revenue optimization gains for your practice. An ideal medical practice has very low overheads in correlation to revenues, which translates into higher net profits.
Medicine is people businesses, meaning if people are not happy with how they are being handled, they will take their business elsewhere. This is different than a business that, say, manufactures a physical product and is judged by the quality of that product.
A medical practice is judged by the soft skills of the staff and their capacity to make patients feel valued and well taken care of. This may not seem as an ideal way to boost revenues but customer retention is the biggest driver of revenue growth across the business landscape. In business terms, the cost of customer acquisition is many times the cost of customer retention while the value derived from each is the same.
So, how do you ensure your patient management is top-notch? For starters you will need a patient management system that works. The system must be able to efficiently handle appointment alerts, medication reminders, billing alerts, among others. Efficient use of technology is one element that will ensure your patients are happy and keep coming back.
There’s more that goes into an ideal medical practice. By tracking and measuring performance over time and correlating performance to changes implemented within your practice, you can work toward building your financial goals.