Scale your medical practice for profitability
Just about every business owner will reach a stage when they will have to decide whether to scale their business or not. It’s a decision that should be taken after a careful process of analysis and evaluation of the business and the market within which it operates. This article explores some of the considerations you should take into account when you are thinking of scaling your medical practice for better profitability.
When it comes to running a medical practice, it’s important to bear in mind the difference between growing your business and scaling your business. For example, you may see a steady stream of new patients visiting your practice through your marketing efforts and word-of-mouth referrals. This is a good indication that your medical practice is growing. But this might also result in the need to add additional staff/ resources to manage the increased workload. If this is the case, you will probably need to scale your business as expenses are increasing at the same rate that you are growing.
Scaling your medical practice means that your practice is able to cope with an increase in patients, while keeping costs low and maintaining or improving efficiency. With that in mind, a good place to start is to assess your practice in its current state. This will help you to know what to focus on to put you in the best position to scale your business.
Assessing your practice’s readiness to scale
Before you make any changes, it’s important to know what shape your practice is in. Ask yourself the following questions to help guide your strategy to scale:
- Is your practice currently working at full capacity or could it cope with expansion?
- Have you determined what benchmark metrics will you use to measure your progress?
- Do you have the right systems in place to make sure the practice runs efficiently?
Your answers will give you an idea of where and what to focus on to be able to scale effectively. For example, if your practice would struggle to cope with an increase in patients and associated admin, you might consider implementing a cloud-based medical billing software to help your staff cope with a bigger patient population.
Other tactics you might consider if they are financially viable is to increase your staff compliment, refine your clinical processes, upgrade your equipment (clinical and IT) or outsource certain tasks to give you more capacity to manage the growth and scale successfully.
You will probably find in reviewing your practice’s current state that the weaker areas of your practice are related. For example, efficiency and administration are inextricably linked and could have a knock-on effect on patient satisfaction and/or bad debt.
We’ve outlined four key areas that cover most of the well-known barriers when preparing to scale your practice. You can apply these tactics to your business, regardless of the size of your practice, and tweak the finer activities depending on your specific circumstances.
1. Automate your processes
It’s very difficult to grow your business without incurring more admin unless you implement technology to automate processes that cut time-consuming, tedious tasks for staff. A further benefit to automation is the reduction in tasks that are susceptible to human error and duplicate effort.
Consider the time and effort required to book a single patient appointment without technology. It probably requires numerous phone calls, possible changes, delays and a reasonable risk of error in recording the appointment by the practice or the patient. And that is just to book a consultation. There is still benefit checking, billing, claims submissions, reconciliations and follow up communication.
All these tasks (and more) can be easily managed from a single system. Healthbridge’s cloud-based medical billing and practice management solutions such as myMPS and iHealth use advanced technology to fit seamlessly within your workflow. The technology can also allow you to see more patients, more efficiently without incurring the expense of employing additional staff members to manage the workload.
2. Identify your competitive edge
In order to scale your practice successfully, you have to attract new patients while retaining existing patients. Part of getting this right is having a thorough understanding of your patient base and the surrounding practices competing for the same patient-base.
Consider some of the following questions to help you get a comprehensive understanding of your position in the market and how to improve it:
- Who are your existing patients? Are there other patient demographics that may need your clinical services that you haven’t targeted before?
- What sort of clinical services are you referring your patients to on a regular basis? Have you considered offering new services for new and existing patients?
- Are you able to diversify without unnecessarily high risk or cost to the business?
- Do your competitors offer this service? Is it something you should consider?
- How do you communicate with your patients to stay top of mind when they need to see a doctor?
It might be tricky to take an objective view of your business but that’s where your practice data will help you plan and execute your strategy. Healthbridge’s Business Insight reports use your day-to-day practice data to give you an invaluable understanding of your practice from a financial, managerial and clinical perspective. These easy-to-understand reports are at your fingertips to help you know what to focus on and importantly, measure your progress.
3. Focus on the right things
Focusing on the right things can mean different things to different people but ultimately, every practice should focus on the patient if they want to appeal to more patients and scale for profitability. The starting place for the changes you want to implement and the goal should be one in the same – a better patient experience. Technology is one way of drastically improving the patient experience. Use it to improve efficiency and communication, in addition to billing and practice management. It’s also a good idea to measure patient satisfaction over time to truly gauge how you’ve improved and what still needs improvement.
4. Build your network
As a business owner, you will know that developing your network is crucial to your overall success and long-term growth. Your network is also key when it comes to scaling your business. For example, you can expand your practice by joining forces with another practice or specialist that compliment your services or can act as a referral partner.
Partnerships, mergers, acquisitions and joint ventures are all options when it comes to scaling your practice. And while they all come with considerations that need to be weighed up carefully, there can still be clear advantages such as more resources, expanded skills, a bigger patient base and more. Its advisable to explore the best fit for all parties involved and to consult with trusted legal advisors to ensure that communication is clear, and the outcome is beneficial for all parties.
As mentioned previously, it’s important to measure the success of your practice not simply by how much it grows but in its success in scaling as a business. You should aim to achieve exponential growth while keeping costs relatively low. This can be easier said than done. As you begin scaling you will inevitably incur some additional expenses, possible miscommunication between staff or patients, gaps in your revenue cycle management (RCM) system, and more. Don’t try to scale too quickly. Instead, find the right partners who can help you evaluate your practice and implement the changes that get you to where you want to be.
Healthbridge is a trusted partner to over 5000 private practices. They’ve been helping private practices achieve scale for over two decades. Get in touch to find out more about how they can help you do the same. Contact email@example.com