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.