Do you feel like you are constantly fighting to keep your medical practice afloat? Are you looking for ways to reduce your expenses and improve your bottom line? If so, you’re not alone. In this post, we’ll explain our approach to reducing medical practice expenses, and how we saved one practice as much as $260,000!
A common concern echoed by physicians is the issue of working more yet earning less. On one side of the equation, everyone knows reimbursements continue to decline and insurance companies are always looking for reasons to deny your claims. But what about the other side of the equation? Have you evaluated how much the practice is spending, and on what?
When Cornerstone Healthcare Consulting is retained to evaluate your practice, one of the first things we will ask you for is a copy of an expense report from the last 12 months. This report will provide us with a few initial clues for the low hanging fruit of where you are paying too much. For example, we will immediately review your medical supply costs, as well as medical waste costs. With respect to medical waste, there is a certain vendor that is notorious for ripping off medical practices. We have saved practices thousands of dollars just in medical waste services because of this vendor. To give you an example, below represents a former client who had waste services with this vendor for two of their locations. It shows what they were paying for medical waste with the former vendor versus what they are now paying with the new vendor, and total savings.
Evidently, this was a large savings, and it may seem like this was a one-time occurrence. However, it was not. Whenever we see this vendor, we know the client is paying too much money. Often, the medical practice is unaware there is a different choice than that vendor. Even if they assumed there must be an alternate vendor to the one they are using, they have no idea who that would be. Additionally, they often get locked into contracts and see it as impossible to get out. This particular vendor has been sued in the State of New York for violating contractual law, not notifying the client their contracts were set to expire within 60 days. As a result, the clients were locked into another year or more, paying these prices. Fortunately, the lawsuit against them was a success. Therefore, we have been successful in getting clients out of existing contracts with this vendor, citing the recent lawsuit.
Similarly, we always look to see who the practice is using for their medical supplies. There are a couple culprit vendors that are known to charge too much. We have a preferred medical supply vendor we like to work with, who many physicians don’t even know exist. Each time we have worked with them, they have saved our clients more than 20% on medical supply costs. Also, we have had scenarios where practices have switched to them, and suddenly their former vendor is willing to match those prices. That confirms they can significantly lower their prices. But if no one is watching the pricing as it goes up year to year, and no one knows there are options for other vendors, then they will continue to get away with charging too much.
Another area for big savings is within employee benefits. As mentioned in a previous blog titled, The One-Stop Shop for Doctors, both the retirement plan and health plan are often in need of review and revision. Within the Cornerstone Network, we have professionals we regularly work with, who have been incredibly resourceful in assisting our clients. Planned Futures Financial primarily deals in the medical industry and is our go-to when it comes to retirement planning as well as life and disability insurance. One client they saved over $40,000 between what was saved in reducing their retirement plan expenses and group disability insurance, as well as eliminating the cost of their TPA. Azeros Health Plans is our go-to for health insurance costs. Co-owners Ron Zoeller and Kevin Gannon previously operated their own companies for years before opening Azeros together. In addition to assisting us with health plans, we also work with Azeros on Direct Primary Care initiatives.
Although our intent is to save you money, it is also our responsibility to ensure you have the proper resources to operate your practice. If it means we need to recommend a new vendor that may cost you a little money, but you are properly covered, we will do that. One area this could happen, is with your business insurance. We collaborate with Steinmiller Insurance, who are well versed in understanding medical practice coverage needs. They are very familiar with the HIPAA laws, as well as the need for data protection. Upon reviewing your current insurance coverage, they may match what you have and save you money. But they may also suggest adding important coverage that you do not currently have, which will cost you a little more, but could protect you in a big way.
When evaluating your expenses, we don’t just go for the low hanging fruit, or the large expenses. We will thoroughly review everything, both big and small. In addition to the recommended changes, we will help facilitate them! From reviewing expenses, to negotiating with vendors, to executing the change. We have done everything from counting inventory to helping to install new phone systems to assisting with the transition form server based EMR to cloud based EMR.
With insurance reimbursements declining the ability for medical practices to reduce expenses is a top priority. We can help you! Schedule a consult today, so we can get started!