How to save costs while setting up a new practice
As a fairly new doctor you might feel that you’ve gained enough clinical experience and therefore, you’re ready for the freedom and flexibility of owning and running your own practice. This is an exciting time for any new practice owner. But, it can become overwhelming once you get into the nuts and bolts, because you soon realise that running a practice does not only require clinical experience, but business experience as well.
An important aspect of running a thriving practice is having a healthy and positive cash flow. One way to do this is by keeping costs low. Below we’ve suggested a few ways you can reduce costs when starting up.
Adopting technology may seem a bit risky, especially because the traditional methods have been tried and tested for many years. But, whether you are technology averse or not, it is worth looking into technology to see how you can run an efficient practice. Here are a few cost-saving technology methods versus manual methods:
- Automated appointment reminders vs. manual reminders
Patient follow-up’s and appointment reminders are usually managed by phoning the patient or by completely leaving this in the patient’s hands. Regularly phoning to follow up usually results in higher phone bill costs, and on the other hand, not reminding patients might result in missed appointments and therefore a loss of potential income.
By managing patient appointments with automated SMS reminders, you decrease the chance of a no-show, and therefore decrease the loss of potential income; and by phoning less you decrease phone bill costs.
- Automated benefit checks vs. manual benefit checks
In order to know if the patient is still part of a medical aid and if they have funds available, the manual process requires you to phone medical aid or to browse medical aid websites. This a lengthy process, which may result in higher phone bill costs. Alternatively, by using automated benefit checks, you avoid lengthy phone calls and browsing sessions. This can be done by checking patients in online when they arrive for their consultation and having an automated benefit check generated immediately.
- Using software vs. hiring too many people
Hiring too many people may result in high costs. For example, hiring someone to focus on manual reconciliations may take up a lot of time; we have found that manually reconciling 100 claims may take up to 2 hours.
On the other hand, having your claims automatically reconciled saves you hours, we have found that 100 claims can be automatically reconciled in 10 minutes. This saves you money which would have been spent on an extra staff member.
Weigh office space options
When choosing a location, it is important to that you are located in an area which is prime and convenient for your desired patients. In addition to that, you need to be aware of rental overheads and if you can afford to spend that amount of money. It may be your dream to own your own prime office space, but if you have a limited budget you may have to consider other options.
Office space options include:
- Owning your own space
If you want to lease a space and convert it into a practice, you need to ensure that you have a budget for conversion costs, and you need to ask yourself whether or not the conversion costs will pay off long term. But, leasing a practice which does not need much converting will result in lower conversion costs.
- Shared practice space
With the tough economic times, sharing office space with other medical professionals might seem like the most cost-effective option, but ensure that you are clued up on all the latest legal requirements when entering into room sharing agreements. Read about what the HPCSA says about room sharing here.
Get free advertising
We won’t be getting into the specifics of how to advertise in the medical industry. But, if you would like specifics on how to advertise in the medical industry, find the policies here.
So, instead of spending a lot of money on marketing and advertising you can cut costs by marketing for free. Two great marketing tools are a website and social media. Invest in a website which speaks to the kind of patients you would like to service- there might be initial costs, but once that is done, your website is a permanent space to speak to your target, consistently. Social media is another effective tool. The great thing is that you can reach a global market and it is free.
Shop for less
When looking at your potential vendors, do enough research and compare prices.
Look into different:
- Waste management companies
- Office supply companies
- Tax and legal experts
- Other vendors
Do not just go with the first person who comes to mind or the traditional option. Really take the time to weigh your options.
This new journey can be easier than imagined, especially if you are not stressed by costs. Leverage technology, weigh your office space options, try free advertising, and shop for less- then you’re well on your way to small business success!