Small shifts that make a big difference in finance 12 month plan to lower your overhead
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Transcript of Small shifts that make a big difference in finance 12 month plan to lower your overhead
Because your patients come first.Because your patients come first.Because your patients come first.
Small shifts that make a big difference in financeSmall shifts that make a big difference in finance12 month plan to lower your overhead12 month plan to lower your overhead
Steven A. Adams, Steven A. Adams, CPC, CPC-H, CPC-I, CPC-P, CCS, CCS-P, PCS, FCS, COACPC, CPC-H, CPC-I, CPC-P, CCS, CCS-P, PCS, FCS, COA
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
So What’s So What’s Wrong?Wrong?
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
Inman EquationInman Equation
4 - 5 = -1
It’s not 1’s fault
R - OH = P
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
What Can You What Can You Do?Do?
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
Object of the GameObject of the GameAverage practice with a
60% OverheadHas a
5% Increase in RevenueOr a
5% Reduction in Overhead
Results in a
10% Gain in Profit
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
5 / 10 Rule5 / 10 Rule2008 2009
Revenue 500,000.00$ ## 512,500.00$
OH 300,000.00$ ## 292,125.00$
Profit 200,000.00$ 220,375.00$
A Small Change Makes a Huge A Small Change Makes a Huge DifferenceDifference
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Before We BeginBefore We Begin
On the financial statement, there are more than 30 lines showing us how we spend our
money. But there’s only one line that focuses on how much we make. Increasing revenue
while decreasing overhead is the key to financial success.
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• A/R < 18% > 90 days• Patient Debt < 20% of
A/R• PQRI• E-Rx• EMR bonus• Stimulus Package ’09• Coding Correctly• CCI Edits
• Fee Schedules / Contracts
• Preventive Services G0101 Q0091 G0372 99406 99407 G0102 G0179 G0180
Top Line StuffTop Line Stuff
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Now Your 12 Now Your 12 Month Plan to Month Plan to
Reduce OHReduce OH
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Month 1Month 1Staffing NeedsStaffing Needs
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5 Things to Consider5 Things to Consider
I. Largest expense 23-30%II. List what you believe to be
the problems in the officeIII. Can you outsource to save
money?IV. Have staff list top 5 things
they do - look for overlapsV. Look for high paid people
doing low pay work
mgma.com
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Month 2Month 2Employee SalariesEmployee Salaries
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5 Things to Consider5 Things to ConsiderI. Don’t just count FTE’s consider
a budget for staffingII. Create a grid with positions and
create maximum salaryIII. Consider raises based on
incentives plans for each position
IV. Make your money their money
V. Show employees their entire benefit package annually
salary.com
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Month 3Month 3Health InsuranceHealth Insurance
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5 Things to Consider5 Things to Consider
I. Does everyone at your office need their coverage?
II. Drop the dental and vision and/or charge a percentage of the premium to your employees
III. Consider a high deductible HSA / HRA catastrophic plan
IV. Partially or fully fund the deductible with an “HRA”
V. Watch the person making this decision
ehealthinsurance.com
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Month 4Month 4Retirement PlanRetirement Plan
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5 Things to Consider5 Things to ConsiderI. Pay yourself before anyone else –
look out for youII. IRA income limits abolished in
2010 for converting to a Roth IRA but stay for contributing
III. Take your 401K/201K and diversify and reallocate
IV. Invest in an IRA through MAG with a 7% guaranteed growth rate
V. The average doc will need $3,000,000 in retirement to live on 12,000 per month
cbpp.org
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Month 5Month 5Sick Leave and Sick Leave and
OvertimeOvertime
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5 Things to Consider5 Things to Consider
I. Average sick is 5 days, average vacation is 10 days
II. Update policy manual to reflect separation pay and unused time
III. Just switch to CAL time 17 work hours for 1 CAL hour
IV. Make your time their timeV. Why are your employees working
over time
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Month 6Month 6Lease AgreementsLease Agreements
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5 Things to Consider5 Things to Consider
I. Operating stop provisions II. Net rentable space and net
usable space III. Is the insurance necessaryIV. Would it be cheaper in the
long run to own a building than to rent office space
V. Look at the leases and interest on your equipment – you’re killing me
officefinder.com
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Month 7Month 7Medical, Lab and Medical, Lab and Office SuppliesOffice Supplies
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5 Things to Consider5 Things to ConsiderI. Make a budget and stick to
it – Tie it into a staff bonus – Make your money their money
II. Consider ILS through MAGIII. Have one person
responsible for suppliesIV. If pass through billing for
labs check the billsV. Requisitions forms work
and should be reconciled by you
magmutual.com
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Month 8Month 8Outside ServicesOutside Services
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5 Things to Consider5 Things to ConsiderI. Usually overlookedII. Outside services CAN save
you money and help ensure compliance:
I. (coding and documentation, payroll, bookkeeping, billing, collections, budgeting, yard, janitorial, hardware, software, HR management)
III. Inquire about free services available from vendors, IPA, Malpractice
IV. You’re paying for advice, so listen
V. Always ask for a discount [email protected]
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Month 9Month 9Postage and Postage and
Telephone CallsTelephone Calls
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5 Things to Consider5 Things to ConsiderI. Stop sending indefinite
statementsII. Use a system like MD
Messages to confirm patient appointments and for lab results
III. Look at having statements done off-site by your billing vendor
IV. Look at stamps.com instead of a meter
V. Put in a 900 line for rx refills mdmessages.co
m
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Month 10Month 10AdvertisingAdvertising
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5 Things to Consider5 Things to ConsiderI. How did your patient find
you in the first place?II. Satisfaction survey helps
show you what worksIII. Did the color add in the
yellow pages work?IV. Are you on the web?V. Its always cheaper to
keep an existing patient than to find a new one. Marketing never stops masseyeandear.
org
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Month 11Month 11Patient RefundsPatient Refunds
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5 Things to Consider5 Things to ConsiderI. Refunds are not a good
thingII. Patient refunds should be
researched to find out what went wrong?
III. Refunds to governmental and private payers must be made immediately
IV. Make sure you find out why a plan requested money back
V. Take corrective action – keep that cash magmutual.com
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Month 12Month 12Petty Cash, Bank Petty Cash, Bank
Charges and Other Charges and Other Things That Cost Things That Cost
You MoneyYou Money
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5 Things to Consider5 Things to ConsiderI. Make sure all petty cash is
accounted for with receiptsII. Make sure you only have one
receipt book at the front deskIII. Call the bank and ask if there is
another option for your primary account based on your activity
IV. If you use a credit card do you have one with points that can be used for future purchases
V. Call your mobile carrier and find a way to reduce costs
magmutual.com
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
Remember…Remember…
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
Object of the GameObject of the GameAverage practice with a
60% OverheadHas a
5% Increase in RevenueOr a
5% Reduction in Overhead
Results in a
10% Gain in Profit
Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come First
Any QuestionsOffice: 888.624.6474Direct: 770.241.4344E-Fax: 404-848-8661E-mail: [email protected]: facebook.com/people/Steven-Adams/1154124331