Quite a few of the past few posts have been directed toward
ways to improve practice efficiency and save money. On the flip side, one can
improve revenue by bringing in more money which means performing more services…
or does it? Many providers think that the only way to make more money is to
increase volume. This is not always the case. My point goes back to the old adage
‘work smarter, not harder’. It is not necessary
to turn your office in to a factory to make a profit. As previously shown,
improvements in efficiency can save you an bundle. Similarly, a practice can
increase revenue with a few simple but potentially profitable changes.
The first place to start is to look at your schedule. Is
your schedule planned to maximize your revenue? Think of it this way…. According to New York
Medicare a 99213, a level three evaluation and management follow up visit, pays
$80.22 in 2011. A 99203, the lateral evaluation and management for a new
patient, pays $119.78. Clearly, it pays to see new patients. So the question
is, are you saving time in your schedule for new patients? Or are you making
them wait for an appointment and risking losing to another doctor? This same
thought holds true for other higher paying procedures and services.
The idea here is to plan your schedule in advance. Allot
time each week to accommodate new patients and patients who need tests, as well as standard
follow ups. If you don’t plan your time in advance, you cannot maximizing your
schedule for profit. To facilitate these changes, you will have to get your
staff on board with the plan and involve them in the planning. Also, to help
the scheduling staff remember, make use of your scheduling system’s templating
capabilities. If you don’t know how to use the system’s scheduling templates or
you are not sure if your system has such abilities, call your software vendor
and ask. This minor implementation will really help to maximize you revenues.
Rule: Plan your schedule in a way that maximizes revenue
The next idea to improve revenue is to consider the role of physician
extenders in your practice. Nurse practitioners and physician’s assistants are
a wonderful asset to help maximize the practices revenue. The NP or PA can take
some of the burden off the physician’s shoulders while bringing in revenue for
the practice.
Think of it this way… Your practice’s operating costs are
the same whether you use one exam room or two – right? So there is no loss in
using a PA from the operating cost perspective. Simple rule of physics - a physician cannot be in two places at once. But
using a physician extender, you can ‘see’ twice the patients. Now, the PA/NP is
generally paid 15% less than the physician for the same service. Even so, look
at the numbers before assuming it is not profitable:
Assuming that each of the PA/NP’s appointments are 15
minutes long and the PA/NP sees about 24 patients per day (6 hours working and
2 hours for lunch and breaks). The NP/PA
will be reimbursed at 85% of the physician fee schedule, so let’s use CPT code
99213 which pays $80.22 in NY. Based on that number at 85%, a PA/NP will bring
in $68.18 per patient. So that’s 24 patients times $68.18 payment equals
$1,636.32 per day times 230 working days per year (excluding weekends, holidays, and vacation) equals $376,353.60
minus the PA/NP salary of $80,000/year equals $296,353.60 extra revenue per
year.
Rule: Physician extenders are a cost effective way to increase revenue
Obviously, a physician will not lose that 15% and therefore
has a higher earning potential; however, their salary will also be higher. The
same type of calculations hold true for the employment of technicians – like ultrasound
techs. I have seen a lot of practices where the physician performs their own
ultrasounds and that is not the way to maximize profit!
There are many more ways a practice can add revenue. In my
next post, I will give more thoughts on how to boost revenue including ideas on
increasing the number of patients referred to your practice by other medical practices.
