Many would associate improving a medical practice’s income with increasing patient volume. However, a profitable practice is more about having the best services at the best price. As patients don’t care about your profitability, they are approaching their healthcare as consumers, shopping for the best services.
The move towards value-based care has also played a large factor in the services and quality care patients are demanding. Boosting your practice’s bottom line now has less to do with attracting more patients and more to do with providing the right services at the right price.
Key Areas of Practice Profitability
The volatility of the healthcare industry has left many practice owners balancing the fine act of patient care and practice management. To stay competitive, practice owners need to ensure they cut costs while still offering quality services.
Without a business degree or marketing training, it can be difficult for medical professionals to keep a practice afloat. There are, however, key areas to focus on to make a practice more profitable:
1. Reduce costs
Although more easily said than done, practices can take a cold hard look at the prices they are currently charging for the services they are offering. How do they compare to other practices? It is important to explain pricing in detail to patients. That way, if your prices are slightly higher than your competitors, but are rightly so due to specific reasons, they will want to know that. Communicating it will also justify your prices, making it more likely they won’t mind paying a higher fee for quality services.
Pricing strategies are all about evaluating the quality of your services rather than the costs they incur to provide them. A practice must match a profitable price for them with what their patients will deem the best value for their money in comparison to competitors.
2. Focus on operational efficiency
Operational efficiency encompasses attracting more patients, reducing operational costs and having the right marketing budget to achieve both. This means possibly advertising more products at once that complement each other, upselling or even offering new services.
Depending on the type of medical practice you own and your comfort base, you can incorporate fidelity strategies. Much like McDonalds offers you a free coffee after purchasing a set amount, you can offer patients discounted prices on certain services when they bundle visits. This way, they will come to your practice for all services and have the opportunity or incentive to try new ones.
When it comes to reducing operational costs, practices need to evaluate their current processes and eliminate any inefficiencies that affect profitability. This could mean implementing practice management software to eliminate double entries, free up staff time by automating certain processes, and other initiatives to ultimately reduce expenses.
3. Integrate relevant technology
Practice management software is a great way for practices to implement technology that will reduce costs in the long run. As most have online booking services, this reduces the number of incoming calls and frees up valuable staff time.
With customizable practice and workflow settings, along with secure messaging, staff can do more with less. Certain integrated tools even allow practices to capture additional income by calculating the cost of non-covered services, procedures and supplies, and then automatically charging patients (including no-shows). This not only increases your cash flow, but it also stops revenue leaks and boosts revenue.
4. Offer patient services
On top of what patients need as basic services, concentrating on what they want in today’s technological world is key. As patients are approaching their healthcare differently, it stands to reason practices need to evolve along with them.
Patient loyalty is everything when it comes to the long-term viability of a practice. The best way to cultivate patient retention is through quality care and enjoyable experiences. As patient retention is significantly cheaper than patient acquisition, investing in tools that augment patient experience as well as ensuring staff are held to certain standards will go a long way in terms of patient loyalty.
When it comes to technology, investing in a user-friendly website provides patients with a clear indication of the services provided by the practice along with other valuable information. On top of that, integrating patient portals can both attract and retain patients, all while providing a quality care experience. They provide patients 24/7 access to their patient file, a direct way to communicate with their doctor, and a way to book their appointments online.
Improving your practice’s income boils down to augmenting your care offering by focusing on retaining your current patient base. This means lowering costs by implementing efficient processes and technology, optimizing your practice’s operational management and diffusing relevant marketing strategies. These will in turn affect your practice’s profit margins and hopefully, increase your revenue.