Running a Healthcare Practice

9 Strategies to Minimize the Cost of Running a Healthcare Practice

Healthcare costs are continually on the rise – according to MGMA’s 2023 Cost and Revenue survey, the average cost of running a healthcare practice in the United States reaches $1.2 million per year. This upward trend poses challenges for healthcare practices, necessitating a strategic reevaluation of operational practices and business decisions.

In this article, let’s go over nine effective strategies that can help practice leaders navigate and succeed in the industry, despite the current fiscal circumstances. From auditing expenses to embracing alternative staffing models, here are ways healthcare practices can minimize their expenditures.

1. Track Expenses & Identify Areas for Improvement

Reducing the cost of running a healthcare practice starts with tracking every single expense of the organization. By maintaining a vigilant eye on the financial data, leaders can maximize their resources and pinpoint specific areas where costs can be further optimized. This data-driven approach facilitates informed decision-making that will benefit the organization in the long run.

2. Negotiating Better Rates with Suppliers

Healthcare practices can significantly cut costs by engaging in negotiations with suppliers. This strategy involves bargaining for better prices on medical supplies, equipment, and services. Additionally, practices can explore bulk order discounts and negotiate terms for timely payments. These efforts can lead to substantial savings, contributing to the overall financial health of the practice.

3. Implement Energy-Saving Measures

One line item in the list of expenses that healthcare practices are subject to is energy consumption. While this expense is unavoidable, healthcare practices can minimize it by incorporating energy-saving measures, such as installing energy-efficient lighting and HVAC systems or considering renewable energy sources like solar or wind power. These environmentally conscious initiatives align with both fiscal responsibility and sustainable healthcare practices.

4. Embrace Waste Reduction Programs

While wastage is an inevitable part of running a practice, implementing programs to reduce it can lead to substantial cost savings. One example is ordering supply amounts only as necessary, which can be accomplished by tracking supply usage. Doing so will ensure the practice’s wastage is kept to a minimum and expenses are maximized.

5. Offer Preventive Care Services

The phrase “prevention is better than cure” not only applies to patients but also to healthcare providers. For this reason, practice leaders must invest in preventive care services as these can help keep patients from developing chronic diseases. By taking a precautionary approach to delivering healthcare, practices reduce the financial burden associated with providing extensive treatments while enhancing patient outcomes.

6. Utilize Technology for Efficiency Gains

While securing technology can incur initial costs, embracing it can lead to long-term reductions in administrative expenses. One specific example is the implementation of Electronic Health Record (EHR) systems that can streamline a number of lengthy processes, such as billing and insurance processing. This approach saves time and minimizes the margin for error. By leveraging technology, healthcare practices can enhance operational efficiency and redirect resources toward improving patient care.

7. Manage Patient Demand Strategically

Strategic management of patient demand is crucial for improving efficiency while reducing operational costs. Considering how today’s patients value convenience, practices can implement online scheduling, appointment reminders, and telehealth services. These initiatives not only enhance patient experience but also contribute to better resource utilization, minimizing unnecessary expenses.

8. Cross-Train Staff for Operational Flexibility

The number of patients and their needs are often volatile. While these shifts can sometimes be anticipated, there are also times when practice leaders cannot predict them. To prepare for unprecedented changes, taking a proactive approach by cross-training staff is a good practice to improve efficiency. Doing so can also cut down costs because existing team members can fill in specific job roles as necessary, minimizing the need to hire additional staff.

9. Explore Staffing Alternatives

While human resource is arguably a practice’s strongest asset, practice leaders can optimize it by exploring staffing alternatives. On average, the monthly salary of an in-person healthcare staff in the US is nearly $5,000 – that’s almost $60,000 per annum. To cut down on staffing costs while keeping job roles filled, leaders should consider opting for remote staff like medical virtual assistants instead of in-person team members.

In most cases, the cost of hiring a remote staff is up to 70% less than that of their in-person counterparts. However, this doesn’t come with any compromise in the quality of their service because medical virtual assistants have the credentials, expertise, and capacity to succeed in a wide range of administrative job roles, from medical receptionist to medical biller. Moreover, their flexibility allows them to simultaneously tackle tasks across different departments.

It’s worth noting that not all remote professionals are the same, so practice leaders must hire them from reliable outsourcing companies like My Mountain Mover. One significant advantage of partnering with us is that practice leaders are guaranteed quality virtual talent thanks to our stringent applicant screening process. When our clients hire an MMM medical virtual assistant, they also get a full support team consisting of HIPAA-compliance, account managers, IT, and payroll – an edge over our competitors that allows our clients to focus on working with their ideal virtual team member and growing their practice instead of managing them.

To learn more about how My Mountain Mover can drive the success of healthcare practices while minimizing their expenses, book a 10-minute discovery call today!