New Trends Emerging in Moderating Practice Expenses

Physicians continually struggle with the amount of their hard-earned revenue that is consumed by operating expenses. According to a Medical Economics Continuing Survey, 2003, "doctors spent from 43 to 50 percent of their earnings on overhead" in 2002*.

Rising health insurance premiums, workers' compensation, malpractice insurance, and unemployment costs added to the biggest outlay, depending on the area of the country.

However, there are a few bright spots emerging as ways physicians are learning to save money, as follows:

Trends toward electronic medical records and billing software. Practices that move in this direction are experiencing improved billings and collections and a reduction in operating expenses. Practices that have become paperless are no longer spending countless hours and labor expense associated with managing, storing, and retrieving paper. In addition, unlike most of the software currently in use today, the new applications now have built in intelligence and the ability to learn from your mistakes. Point-of-care documentation and point-of-care coding have significantly improved compliance and reimbursement through appropriate coding and documentation.

Dumping bad managed care plans. Physicians are realizing that if they lose money on a contract because reimbursements are too low, working harder and longer won't add to the bottom line. In fact, it will cost more because they will have to pay their staff for more hours to process patients and claims. Ask yourself this question; "If you drop a non-profitable contract, who will get these patients"? Hopefully your competition, if you see my point. Do yourself a favor and free up your exam rooms to see the profitable patients. The managed care plans are in no hurry to change reimbursement as long as physicians are willing to accept their low fees. You should keep in mind that "employers" drive the managed care market and, if necessary, they can assist with driving bad contracts out of town when the employees start losing access to their providers.

Using the Web and E-mail instead of snail mail, the telephone, and conventional advertising. As the cost of paper supplies, postage, and stationery rise, and conventional advertising (especially Yellow Pages ads) escalates, practices are communicating more through e-mail and via Website advertising. The result is that fewer patient calls are coming into the office seeking information that is available on the Internet, and fewer letters are going out consuming postage and mailing supplies. This, in turn, lowers administrative costs. Moreover, insurance companies are now posting information such as eligibility, benefits, and claims status on-line that will substantially reduce valuable staff time spent on hold. For more information on evaluating EMR and other IT solutions for your practice, analyzing managed care contracts, and using the web to enhance communication with your patients, contact Jeffery Daigrepont at This email address is being protected from spambots. You need JavaScript enabled to view it. or at (678) 832-2010.

* Gail G. Weiss, "Exclusive Survey, Practice Expenses, Medical Economics, November 7, 2003, page 31.

Jeffery Daigrepont is a Manager at The Coker Group
Reproduced by permission from The Coker Group, CokerConnection, (Roswell, GA: The Coker Group, 2003), Vol. 3, No. 12, December 2003 by The Coker Group.

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