Medical clinics that devote time, money and human resources to better budgeting ultimately pass benefits of cost-effective, diligently managed healthcare along to every single patient. That isn’t just good business sense. Conscientiously utilizing resources as efficiently as possible conveys a commitment to delivering the most comprehensive, high-quality overall treatment for the patient’s money. There is no more definitive win-win proposition throughout the entire healthcare industry. Patients can afford to heal. Clinics bolster their profitability.
Invest in Compliance
Investing in the best regulatory compliance tools for the life science industry is an important step towards clinic compliance. The life science industry is heavily monitored and regulated to ensure every organization that exists to help patients and save lives administers the safest, most effective treatment available. Companies and clinics face a perpetual balancing act to maintain equilibrium between productivity and ethical responsibility. For example, given their inherent combined focus first and foremost on the bottom line, many clinics’ field-based sales and marketing teams are particularly susceptible to operating with a potentially flawed understanding of the consequences that follow inadequate regulatory compliance.
Executive leaders tend to more intimately comprehend just how costly violating certain rules can quickly become, up to and including the jeopardization of a clinic’s continued operation. Whichever regulatory compliance tools you introduce, make sure they promote, clarify and integrate unmistakable standards and practices with uniform support from every department. Your ongoing compliance from the boardroom to the waiting room is the most essential step in earning every patient’s ongoing trust.
Benchmark Your Budget
The Medical Group Management Association (MGMA) Cost Survey and Statistics Report on Medical and Dental Income and Expense Averages should always be go-to sources of family practice cost data. Both are goldmines of staffing count, accounts-receivable levels and contractual disallowance percentages data presented as percentages of revenue. After choosing a benchmark data source, pull the statistics matching your accounts chart’s expense categories to establish your budget’s baseline, which you should prioritize updating annually. Next, adjust each benchmark to fit your practice. For instance, factor in above-average staffing costs if you employ registered nurses instead of medical assistants since the industry benchmark for an RN’s hourly pay significantly exceeds the standard for an MA.
If you operate in an urban area, budget for higher expected rent. A practice with a thriving patient base and steady activity could possibly afford to reduce lower marketing expenses. Once you identify adjustments within your first budget, you can more intuitively re-apply the same adjustments each year upon receiving revised benchmark data. Factors that push one month’s expenses or income into the next shouldn’t be used for annual adjustments but mark them for later recall. Likewise, short term variations occurring because of holidays, weather closures, seasonal changes, epidemics, local economic shifts and physician absences should not factor into yearly changes either.
Improve ER Deficiencies
On a more practical level, emergency rooms and trauma centers routinely display particularly strained budgets. To some extent, that is owed simply to certain seemingly unavoidable day-to-day realities. These are the first havens where uninsured patients can walk and receive basic treatment without being able to pay the care they receive. Fortunately, administrators have more agency in subverting this budget-straining conundrum than some might expect.
According to the Foundation for Health Coverage Education, as quoted by Becker’s Hospital Review, around 80 percent of uninsured ER patients qualify for at least one publicly funded program. Here, a savvy administrator has an opportunity to keep patients out of debt and guarantee eventual reimbursement for care rendered. Achieving both only requires assisting trauma patients with completing publicly funded health coverage applications in the interest of preventing further reliance on last-resort emergency care centers. Medicaid might pay doctors less for their services than private insurers, but some guaranteed payment is always better than receiving nothing.
Examine Ongoing Expenditures
Every budgetary decision a clinic administrator makes should include a clear justification and estimation of its impact on the facility’s overall performance. Without such due diligence, there is no telling how much more you might be paying for some resources than necessary. Always size up equipment and service providers’ contracts up against the clinic’s optimum coverage level. That includes reviewing what your facility spends annually on inbound and outbound delivery services and reserving the option to renegotiate terms in the interest of saving potentially hundreds of thousands of dollars per year.
In addition to explicitly writing out your expected expenditures for the lifespan of a piece of equipment before entering a vendor agreement, develop a complete warranty database for each apartment to ensure nothing is unwittingly repaired at an overpriced estimate. Finally, save time and expense in the event of an emergency by contracting with an outside firm to perpetually track your resources’ storage or location in real time, from patients and staff to capital assets.
Better budgeting is much more than better business in the life sciences industry. Allocating financial resources as wisely as possible based on careful examination of a medical clinic’s operations could save countless lives in the long run. If exceptionally thorough bookkeeping, paperwork and internal auditing could eventually rein in spending, improve efficiency, guarantee strict commitment to regulatory compliance and reveal inventive ways to help patients, aren’t those objectives deserving of a deeper dive into a clinic’s accounting and policies with a fine-toothed comb? Any patient would likely think so.