The COVID-19 pandemic negatively affected many physicians’ practices over the past few years. As medical practices begin to fully rebound, this is an especially good time to evaluate your financial strategies to determine what’s still working and what needs to be improved.

Is there room for improvement?
Here are five steps you can take to improve profitability going forward:

Collect and analyze benchmarks. To understand how your practice is doing, you have to have some metrics to provide objective financial performance measures. Anything can be measured, but key financial benchmarks include accounts receivable (A/R), days in A/R, claim-rejection rate and denial rate.

Ensure you and your staff understand payer contracts. Each contract is unique in terms of prior authorizations, medical necessity, filing timelines and other details. Physicians and staff need to understand what’s in these contracts. In addition, it’s important to review and, if necessary, renegotiate payment rates. Also, confirm that the payments you receive are at the rates negotiated in your contracts. Sometimes practices are accidentally underpaid.

Communicate payment expectations to patients. Patients must understand what they’re going to be required to pay when they arrive at your office. Your staff needs to know this and communicate it early in the visit.

If the patient can’t pay, the practice needs policies on how they can pay. This can be an uncomfortable topic for staff, but it’s essential. You may also consider customizing how you communicate with patients — whether by phone, text, portal or app. Customizing patient communication is generally viewed as a significant way to improve compliance with billing and payment.

In addition, payment via your patient portal can significantly simplify and speed payments. Keep in mind that transparency about these matters is important for staff involved in collecting money from patients. Understanding patients’ eligibility and benefits is empowering and provides staff members with the right tools to do their jobs.

Create a positive culture. Understand what your practice’s mission is and, from the top down, create a culture that reinforces that mission. Everyone in the practice needs to understand and buy into what that mission is so that this sense of purpose gets transmitted to patients.

To help generate a positive culture, begin with behavior modeling — in other words, it all starts at the top. Staff will follow the physicians’ examples. In addition, open and transparent communication about methodology and taking steps to increase employee engagement in their jobs are helpful. But empowerment doesn’t just happen. Staff needs opportunities for training and continuing education. They also need room to take initiative and receive constructive feedback.

Don’t “manage neglect.” Sometimes physicians operate under a belief that if they only see more patients, profits will go up. This is true, but only up to a point. One problem with this strategy is that it actively courts burnout.

In addition, an increase in the number of patients seen per day may lead to a decrease in the quality of care. Are you managing patients or treating them? And, if you are treating them, are you focused on only a small segment of each patient’s pathology, or are you treating the whole person? You may be falling short of optimal care, happier patients — and even making more money — by managing neglect.

What is success?

A successful physician practice both excels at treating patients and operates as a profitable business. By better handling the business side, and by leveraging profit-building approaches such as monitoring metrics, analyzing contracts and not leaving money on the table, you’ll be better able to offer high-quality patient care in an effective, satisfied workplace with a strong bottom line.