10 strategic ways to improve the profitability of a Medical Practice
08 May 2023
How to improve your medical practice can feel overwhelming without knowing where to start or what to prioritise. As experts in the industry, we can provide you with our top tips to help you strike the balance between improving profitability and providing optimal patient care.
Set your fees right. It is important that your patient fees are set at a level that is both profitable for the practice, the doctors working in the practice and is at a level that will not discourage your patient base from seeking services.
Review doctor remuneration. It is essential that you don’t just set your doctor remuneration level at what the practice down the road does or what is “industry standard”. Firstly, there is no industry standard for what percentage of gross fees a doctor should receive, rather there is a broad range that is dependent on experience, skills, specialties, location, practice size etc. It is important to set doctors remuneration based on what is appropriate for each doctor and for the practice.
Understand Medicare item codes. Are the practice, staff and doctors aware of different Medicare item codes, and are using the correct codes? Not only are there important legal reasons for this, but it also makes sense from a business point of view. There is no point putting the code for a 15-minute consult, if you have prepared a care plan.
Structure your practice correctly. It is vitally important from a commercial, asset protection and taxation point of view that you are correctly structured. Doctors can generate substantial amounts of wealth during their careers and making sure you are properly structured can mitigate their risk.
Review the doctor performance. The only way to sustainably grow is by understanding where you currently are. Make sure you know your numbers, and doctor performance through their gross fees, Medicare items and patient care.
Keep an eye on overheads. We don’t have to tell you; it is incredibly busy owning a business and working in a business. Doing a monthly review (at least) on the practice expenditure can ensure things are in order and there are no surprises or missed opportunities.
Develop a healthcare network. While GPs are the gatekeepers of the medical profession, it is important that you have a good network of trusted allied health and specialist that you can refer patients to so that they get the best care. This network should also be making your life easier by keeping you updated on the patient's condition and results and sending reports in a timely manner.
Get good contracts. Contracts with doctors, employees, patients, suppliers etc. are all critically important. It is not worth trying to take short-cuts with contracts as it often leads to bigger issues in the future. Especially in relation to contracts of doctors and employees, it is important these contracts are legal and covers what it is intended to. This is prevalent right now with the changes to the way doctors are treated for payroll tax purposes around the country, so it is essential that contracts are drafted in a clear and agreed upon way.
Take time off. As a practice owner, there is always work to do and it is easy to become overwhelmed. It may not feel possible sometimes but starting to build the system around you that enables you to take time to rest, recover, and enjoy your life is important. This system will become essential if/when you are forced to take time off due to unforeseen or unfortunate events.
Use professionals. People go to your practice for help and advice because you are professionals in that field. Use professionals to ease the burden of running your practice in the same way. You’re not expected to know the ins and outs of the administration, financials and growth strategies that can optimise your practice, and your time is spent on providing patient care. Finding a professional service that can ease your day, not add to it, is what will take your practice forward. We work with our clients to tailor services that suit the needs and goals of the practice. From removing the burden of bookkeeping, payroll and HR through to Medical CFO services for practices, we allow you to focus on patient care without the headache.
Contact our team of industry experts and start your practice on the journey of growth, stability, profit, and the highest quality of patient care.
The views and opinions expressed in this article are those of the author/s and do not necessarily reflect the thought or position of Findex Group Limited.