According to Medscape’s 2017 Physician Compensation Report, average income for all physicians has risen steadily since 2011. However, the costs of maintaining a medical practice continue to rise as well.
In order to be profitable, you must keep the income flowing, but you have to keep your costs at bay.
Please read our previous blog on 4 Cost Centers That Every Medical Practitioner Must Monitor & Control to Be Profitable
Here are some tips to be cost-efficient in your practice:
Look at the Quality and Quantity of the Staff You Have
Once you made a decision to hire a staff, ideally, you will have a job description for your candidate. Once you hire the right candidate, you will use this same job description to clarify roles and responsibilities. It is also a good idea to establish performance standards and goals upon hiring so the expectations are clear for both you and your staff. Establish a regular review and feedback session. With this performance management system, you can conduct periodic review to evaluate their performance. With this, you will also have a tool to establish organizational structure of each of your staff in the most efficient way to achieve your medical practice business objectives.
Eye a more suitable condition for renting a facility and purchasing equipment
Think about your clinic hours. Do you really operate on an eight-hour workday? Is your appointment usually fully-booked? If not, you might want to consider ‘coworking’, which is basically sharing your space to other practitioners. Apparently, it’s gaining a lot of attention in the industry right now. This way, you can split your costs on rent and utilities. Meanwhile, in securing an equipment, it’s not always necessary to purchase a new one. You might want to consider leasing or upgrading an existing equipment. Consult with your bookkeeper or tax advisor on the financial and tax impact to make the best and informed decision.
Assess the best setup in supply maintenance
It’s healthy for your business to keep track of your supply spending because supplies are used daily in your practice. It is good to monitor your average monthly usage; as well as your economic order quantity and reordering level, to know when to get more supplies. Also, if possible, arrange a better payment deal or pricing with your preferred vendors using the volume of your purchase and payment performance from the previous years as leverage.
Reconsider Other Costs
You should also look into your other expenses. You might be on auto-pay for a service that you have not used for months, and that’s not healthy for your business, so you should cancel that. You might also want to go eco-friendly to keep your utility costs tamed. Choose compact fluorescent light over traditional light bulbs or improve the insulation of your space to reduce heating and cooling costs. You may think that these are insignificant costs but don’t forget that these items can easily add up and saving on these minor items can have a favorable impact on your medical practice’ profitability in the long-term.
Never forget to have an accurate and timely financial information to keep track of your costs
While it seems that hiring an independent bookkeeper will result in spending more money, the truth is, in the long run, outsourcing this task will help you save more money and generate even better results. Having financial information ready when you need them is important in running your business.
So, there you go! Just keep in mind that you have to L.E.A.R.N. to earn!
If you need help to make sure your medical practice is monitoring and controlling costs, as well as help with bookkeeping and tax preparation for your practice, contact us today at email@example.com or 832-437-0385.
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