Cost Benchmarking & Cost Containment
Too few physician group practices review expenses or use cost benchmarking in a routine and organized fashion. Instead, the typical practice waits for a profit crisis and then cuts costs across the board. This approach often actually leads to even less profit, as the practice continues to spiral downward.
Just as every medical lab value for a patient has “normal limits,” every line item on your financial statement can be examined through ratio analysis, to determine the health of your practice. Over the past several decades, we have utilized, assembled, and developed industry benchmarks. Our client assessments go well beyond the basics to include labor productivity, retention, goods costs by segment, inventory metrics, billing and collection efficiency dash boards, P&L health, and payor reimbursement compliance.
As a service business with mostly fixed costs, enhancing the profit margin ismore often achieved through revenue enhancement than through cost containment. We can teach you the right numbers to watch each month, how to be a better negotiator, and what to cut first–with the least amount of damage–if expenses must drop in a crisis.