In order to increase the profitability of an organization, it’s important to know the financial principles and apply them when making decisions. There are many ways to improve the profitability of the local physician group without increasing rates.
A recommendation would be to optimize revenue cycle management. Revenue cycle management is the tracking of patient care starting with registration, appointment scheduling and ending with the final payment. For RCM to be optimized, physicians groups should implement electronic health records (EHRs) and automate billing and payment procedures. EHR systems help to improve billing accuracy and reduce errors. They also streamline the claim submission process. Automation of billing and payment can reduce the administrative costs that are associated with manual billing.
One recommendation is the implementation of cost-savings measures, such as group buying and supply chain optimizing. By purchasing in large quantities, you can negotiate with your suppliers for discounts. In order to improve the efficiency and reduce costs, supply chain optimization analyzes the flow from suppliers to end users. These cost-savings can help the physician group reduce its overhead costs, and boost profitability without increasing rates.
Physician owners are advised to optimize their revenue cycle and implement cost-saving methods such as group purchases and supply chain management in order to boost profitability, without having the need for rate increases. Applying the principles shown in Exhibits 6.5 and 6.6, the physician group can improve their billing accuracy and improve their efficiency by optimizing their supply chain.