5 Ways Medical Practices Can Save Money in 2021
Running a medical practice can be an expensive business. Most practices in the U.S. today have overheads worth between 60% and 70% of their revenue. That’s a troubling figure in any context, but considering the economic disruptions of the past two years, reducing costs may be particularly pressing now.
While you can’t escape every high cost in this industry, some expenses are avoidable. Some may be unavoidable, but they don’t have to cost as much as many practices pay. Here are five ways you can reduce and eliminate expenses to save money this year.
1. Reduce Your Inventory
One easily overlookable but prominent source of waste is pharmaceutical inventory. Every year, health care providers throw out $10 billion worth of expired medications. Reducing how much you keep on hand will help prevent medicine from expiring, eliminating this costly waste.
High-cost but low-use drugs are often the first to expire and cost the most to replace, so these are the first selections you should minimize. Adjust your inventory to favor medications that your patients need most often. You may also want to consider using a virtual dispensary, which is often cheaper than holding medications in-house and eliminates the expiration issue.
2. Embrace Virtual Visits
Another way to realize significant cost savings is using telehealth services. Since virtual visits streamline and bypass many time-consuming processes, they result in lower costs for patients and practitioners. While these aren’t ideal for every visit, you can use them for many.
Virtual visits can also apply to any clinical trials you sponsor or run. Patient dropouts can cost up to $8 million per day through delays and disruptions, but telehealth makes them less likely. When participants only need an internet connection to participate in the study, they’ll likely be more willing to follow through with it.
3. Adjust Your Lab Test Ordering Habits
Many medical professionals may not realize that their habits in ordering lab tests lead to unnecessarily high costs. More than 50% of cost savings in lab tests come from simply changing your ordering behavior. Ordering the right test from the right lab can make a considerable difference.
Analysis of nearby labs and their offerings can reveal the most cost-effective solutions. While paying more attention to which test you order from which lab can take work, it can lead to substantial savings.
4. Streamline Administrative Tasks
As in many businesses, inefficient administrative work is a significant source of waste in medical practices. Data entry and filing don’t add value to your work but can consume most of your time. Consequently, streamlining these tasks can be an effective and minimally disruptive way to save money.
Analyze your administrative workflows to find bottlenecks or other inefficiencies that you could change. You can often streamline these processes with simple, low-cost technologies like cloud services or robotic process automation (RPA). The more you can automate in this area, the more time you’ll have for value-adding work.
5. Upgrade Your Office Equipment
While many practices understand the importance of using new medical technologies, their office equipment may go overlooked. If you’re relying on legacy equipment on the administrative side of your business, it could raise your expenses without you realizing it.
Modern alternatives are often far more cost-effective. For example, using Voice over Internet Protocol (VoIP) can reduce telecom expenses by 80% compared to traditional phone lines. While new devices come with higher upfront costs, their efficiency benefits lead to long-term savings.
There Are Many Opportunities to Reduce Expenses
Running a medical practice involves high expenses, but they don’t have to be as high as you might think. These steps provide some relatively straightforward ways you can reduce operating costs, both short- and long-term. Implementing them can help you recover from any recent disruptions and push your business forward.