Sound revenue management in a clinic is essential to ensure the institution’s sustainability. Daily cash inflows and outflows are frequent in a clinic, necessitating having a prudent financial management system to avoid the pitfalls of under/over budgeting. There needs to be a balance between adequate provision for the clinic’s needs and avoidance of wastefulness.
Revenue management enables the clinic to anticipate demands for cash, optimize the availability of funds, and provide better care to the patients. Make sure you put the time and resources into better managing your revenue systems. This allows you to remain successful as a clinic in the future.
Take a Look at Your Budget
Having a proper budget is the foundation of sound revenue management. A budget helps allocate resources to activities, monitor performance, and identify financial challenges before they occur. The budgeting starts with determining the expected revenue of the clinic and planning its expenses. With this forecast, you can pre-empt future challenges like over and under expenditures on medical supplies.
Keeping track of the inventory is a vital part of budget monitoring. A budget should not be a document prepared at the start of the financial year and filed away to gather dust until the next. The budget process helps you monitor the supplies and detect any anomalies or know when adjustments are necessary. There may be changes in revenue and expenditures that need alterations in the budget.
Simplicity in a budget is essential for easy monitoring. A complex budget can lead to apathy among staff because of difficult-to-understand line items or terminologies. The employees will hence be unlikely to use the budget, making the whole planning process counter-productive.
Invest in Software
A revenue cycle process includes all procedures of collecting revenue from a patient and several micro-steps. These steps include billing categories (consultation, pharmacy, lab tests, etc.), integrating with insurance claims, and determining amounts the patients should pay out-of-pocket. Such procedures can be daunting and need revenue cycle management software (RCM) to do the leg work.
Software like NextGen RCM helps track all the medical practice revenue from appointment booking to collecting payments from patients. When a patient books an appointment at the clinic, there is a determination of the insurance cover limit. When the patients get to the clinic, there is clarity on amounts billable to insurance/patient.
The software also submits billable fees to insurance companies and collects payments from third-party insurers. Investing in such software makes the revenue management process seamless and efficient. There is also the elimination/minimizing of errors associated with billing and payments.
Reduce Unnecessary Testing
There is some inclination with physicians to subject patients to several diagnostic tests to rule out particular ailments. In the process, many patients go for tests they don’t need. The unnecessary procedures are costly for the clinic because of the high maintenance costs of machinery for carrying out the tests.
Physicians can avoid sending patients for unnecessary procedures by spending more time with them during the consultation to discern the essential diagnostic tests required. Scrutiny of the patient’s past medical records also indicates probable diagnosis and limits the need for tests. These simple acts can free the medical practice of wasteful spending.
Your clinic can also avoid too many procedures on a patient by attempting to do away with readmittance. The physician tries to assist the patient after one visit, eliminating the need for another visit for the same condition. A second visit may involve the patient being attended to by another physician, who ends up repeating some of the procedures of the first visit. Such actions are wasteful for the clinic.
Some clinics have contracts that have been in existence for years without review. An assessment of the agreements could reveal that some of them are not the best deal the clinic could have. There is a misconception that contracts are not subject to review before they expire. This perception could not be further from the truth because you can renegotiate your contracts with outside vendors before expiry.
A good starting point for renegotiating contracts is comparing those from similar vendors and distinguishing the ones with the best deals. The more favorable contracts can be used as leverage to get better deals with other suppliers. It is critical to know the best timing for such a contract review when you have control over the negotiations. Having different options of vendors at hand helps with the discussions.
You should carefully assess all current agreements. From the assessment, you should know your fee schedule, compare different vendors, have an end goal in mind, and seek third-party help. The bottom line is to be ready with facts for a successful negotiation.
Take Charge of Your Clinic Revenue
Your clinic revenue is the lifeline of the practice. If the expenses override the revenue, the clinic becomes unsustainable, and only a matter of time before it closes. Prudent acts like budgeting, sound operational practices, automating systems, and negotiating for good contracts make all the difference in clinic sustainability.