Squeezing more out of your practice's bottom line

Practice Pointers. By Karen S. Schechter, AMNews contributor. Jan. 19, 2004.

PRACTICE POINTERS

Answers to questions about the business side of your practice

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Question: I am seeing approximately the same number of patients as I have over the past few years, yet my practice's bottom line continues to decrease. I have considered hiring a nurse practitioner to help boost revenues. What else can I do to increase the profitability of my practice?

Answer: This question continues to plague physicians as insurance reimbursement decreases and key expenses, such as liability and employee health insurance, keep increasing.

Let's examine both sides of the profitability equation: revenues and expenses.

You indicate that the number of patients you see remains constant over the years. While this may be true, it is important to evaluate the types of patients you are seeing. Volume is not the only driver of revenue.

Key information to look at is the acuity of the patients being seen and the payer mix. The acuity of patients determines the office visit level that is assigned, as well as the number of additional services that are provided and submitted to insurance companies for reimbursement. If the percentage of higher-level office visits has decreased over the past few years, then it follows that revenues would follow suit.

Look to see if the payer mix has changed over the years. Are you treating more patients with lower reimbursement rates than you have in the past? One way to perform this analysis is to identify the five to 10 CPT codes that generate the majority (75% or more) of the practice's revenue. Then look at how the top payers are reimbursing the practice for those codes.