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How to Create a More Efficient and Profitable Medical Practice in 2024

How to Create a More Efficient and Profitable Medical Practice in 2024  

Authored by: Steve Hunt, Vice President of Sales, Healthcare

Improving efficiency has always been important to medical practices, but with a record number of practitioner retirements, rising labor costs and inflationary pressures, there’s never been a more critical time to master efficiency. While it’s true you’re a trained doctor diagnosing and treating medical conditions, you’re also running a business – which creates a huge opportunity to make strategic changes to improve revenue and the patient experience 

When thinking about efficiency, we often think about speed. And, yes, speed is definitely important. However, mastering efficiency goes a step beyond doing things faster. It’s about running a business that easily handles unforeseen bumps in the road while continuing to operate smoothly. Medical practices can accomplish this by getting good at spotting efficiency hang-ups so that they can fix them.  

Know your numbers, know your “choke points” 

If you’ve watched “Shark Tank,” you’re familiar with Kevin O’Leary and that he’ll never invest in a business – no matter how good it is – if the owner doesn’t know their numbers.  

I often ask providers, “What is the average number of patients you see on a daily or weekly basis?” The response is often a range, like 20-25 a day. Or “I do 50-100 ultrasounds a month.” Then, I say, “That’s not really an average; it’s more of a range.”  

So I’m suggesting that you go a step further than knowing your ranges and get to know your “no-vacancy rate.”  

 

Understanding your no-vacancy rate. We know what “no vacancy” means for hotel rooms, but for medical practices, you want to know the number of patients you can care for over a period that allows you to maintain efficiency. What level would you like to achieve that would make your practice successful and efficient from a revenue standpoint? Typically, when you dig into your rate, you’ll uncover processes that interfere with efficiency, or as I call them, choke points. 

 

Define your biggest choke points. I’ve spoken with providers who easily see 25 patients one day but struggle to get through their 15 scheduled patients the next. They have the same number of hours in the day, and yet one of the days (the one with fewer patients!) seems more difficult. Why? I’ve found it comes down to inefficient processes interfering with productivity (aka choke points). And these inefficiencies often fall into patterns, which means you can fix them if you can spot them.  

Target what’s holding your practice back  

There are endless choke points, but a common one is related to staffing. Do you have the right person doing the right task? If not, it can slow down productivity, and it can be costly.  

For example, a medical assistant may cost around $15 an hour, while a nurse practitioner might cost upwards of $50 to $60 per hour. You want to align your workers’ tasks with their expertise, education, and licensing requirements. Of course, you can’t have a medical assistant doing something that a nurse practitioner should do. That would create a liability. But you can ensure that a nurse practitioner isn’t doing something that a medical assistant could do.  

Another common choke point is when patients call with questions, reach a voicemail, and initiate a phone tag game. Sure, you might have online portals designed to solve this problem, but if messaging systems aren’t actively monitored, patients might just call anyway. As a result, targeting communication inefficiencies is critical to recapturing time.  

Other challenges are linked to not having the right data at the right time. When a practitioner doesn’t have the necessary information at their fingertips, or asks the patient questions they’ve answered before, it wastes time and effort. And this can interfere with the patient experience and productivity, impacting costs.  

These types of inefficiencies can be strategically targeted by grouping them into “efficiency corridors” so you can begin solving these problems.  

 

Evaluating efficiency corridors 

Efficiency corridors are activities that work together to create more efficient workflows. The corridors include the front desk, clinical operations, back office, and in between visits.  

You’ll want to inspect and evaluate how you’re doing in each area. For example, what were the main workflow events that happened before a patient visit? Are you managing your appointment schedule properly? Are you enabling your patients to know when their appointment is and sending reminders? All these activities start your revenue cycle, so they’re important.  

And similarly, when the patient arrives at the clinic, what are you doing to ensure you’re as efficient as possible? Do you have the right medical information and the tools to document the visit efficiently? You want to ensure that each step of the process is smooth and efficient.  

Then, when you move to the back office, which handles getting you paid for your services, you want to ask: Am I submitting insurance claims efficiently? How am I communicating the patient financial responsibility portion of the revenue stream? Do I have the right staff in place to be efficient?  

These questions only scratch the surface, but you get the idea.  All the pieces in the various “efficiency corridors” need to work together for maximum efficiency.  

Key takeaways: Next steps 

If you want to target efficiency, capture more revenue, and improve the patient experience, here are a few steps to get started.  

  • Focus on your no-vacancy rate. Your no-vacancy rate is one of the most important aspects of efficiency because your business is a repeat business. Customers return to you again and again. Decide on a reasonable no-vacancy rate and work toward that goal.  
  • Inspect and evaluate efficiency corridors. Define your most significant choke points and create strategies that target them by streamlining workflow processes.  
  • Create a regular habit around process improvements. Set a regular amount of time each day, each week, or whatever frequency works for you. During this time, focus on process improvements. And get your team involved because nobody knows your efficiency problems better than your staff.  

And lastly, work with a technology partner that can support you in targeting your efficiency corridors by streamlining workflows, recapturing efficiency, and creating processes that directly support meeting your no-vacancy-rate goal. 

 

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