As concerns about a potential economic downturn have challenged American households' bottom line, so too have administrators become more aware of the need for practical, cost-saving solutions at their medical practices.
This episode of the Ask MGMA podcast features MGMA senior advisor Cristy Good discussing a number of simple strategies designed to reduce expenses and boost operational efficiencies at the same time for healthcare organizations. As Good explains, “The ROI in these cases is about freeing up internal resources to focus on patient care and revenue.”
A Year-Round Need to Control Costs
Good says that as practices are focusing on growth and staffing while continuing to recover from COVID-era disruptions, healthcare businesses need to develop a long-term strategy for cost containment. Those money-saving strategies need to become a continuous process, not just a yearly task at budget time.
“I think we’ve reached the point where rising labor costs, inflation and tech expenses are creating sustained pressure, especially when reimbursement rates remain flat or are in decline,” she says.
Impacts Felt at Large and Small Practices
Members of MGMA’s community have reported that both small and large organizations are struggling with similar economic issues, with limited administration support. Vendors, they say, are also recognizing the ongoing austerity and holding firm during negotiations.
“Whether you’re a nine-site urgent care group or a major health system with 14,000 employees, it really comes down to bandwidth,” Good says. “Admin teams are stretched thin and many don’t have the capacity to analyze their spending at that granular level or to engage in strategic negotiation with their vendors.”
Those vendors, she says, see this struggle and, in many cases, have tried to take advantage of the situation. Practices need a strategy and a structure to dig into those costs and how they can make differences through simple changes.
Tech, Scheduling Optimization, Outsourcing are First Steps
Many practices are focusing on cloud-based tech and automation as savings tools, with automated claim scrubbing, AI-assisted coding and digital payment systems helping to reduce manual errors and staffing costs.
Scheduling optimization can also help cut costs, as administrators more closely examine waitlist bills or double-booking high no-show slots to help reclaim some of the revenue they used to lose.
“A third idea is strategic outsourcing of things like credentialing, prior authorizations and billing. Those can save you costs and improve turnaround times if they’re done with the right partner. That’s really the key: hold them accountable if they’re not delivering.”
Limiting Hidden Overspending
Just as individuals have found personal cost savings by canceling entertainment subscriptions, Good says many practices have identified hidden costs, such as copier or fax leases, software licenses and utilities – sometimes for equipment that isn’t even being used anymore.
Others have discovered that they were paying for two overlapping patient messaging platforms, or carrying regular, semi-invisible costs such as shredding services and storage fees. Those are all easy fixes, Good says.
“Do a 90-day look back and ask, ‘Are we even using this? Are there redundancies? Can we renegotiate?’ Involve your team, because they often have great insights and ideas, and that creates buy-in. You don’t have to overhaul everything overnight; just start small and be consistent. Then you make it part of your culture.”
MGMA’s Guide to Cost-Saving Strategies
Good has put together a list of ideas to help practices put savings into action. Among them, automation is absolutely critical, especially for time-consuming tasks such as patient reminders.
“Automating those reminders via text or email can drastically reduce no-show rates and front-desk workload,” she says. “We know that a patient who gets that reminder the night before is more likely to remember versus someone who set up that appointment six months ago, as they get busy in their everyday life.”
AI tools for billing and documentation can now be integrated into EHRs and can help reduce denials and staff time, as well. And if credentialling or prior authorizations are slowing your team down, they’re also a great candidate to shift externally.
Boosting Staff Skills and Rethinking Scheduling
Many practices are also seeing the benefits of cross-training their staff, allowing your team to pivot when employees are off, or during slow periods. Front-desk staff can learn basic billing workflows and clinical staff can help with outbound patient calls.
“I think that also gives your staff that career growth, maybe the change or variety in their job that many are probably looking for,” she adds.
Clinic schedules are another area for innovation, with group visits for chronic care better served with additional Saturday hours for patients who can’t come in during the week. Those changes can mean more efficient throughput and increased patient satisfaction, and many staff also appreciate a working schedule that gives them a day off during the week.
Take Advantage of Group Purchasing
Group purchasing organizations (GPOs) can also be beneficial, especially for smaller practices that don’t have the same buying power as a hospital system. Good says GPOs help aggregate demand and negotiate lower prices for things such as medical group supplies, equipment and even vaccines.
“The key is, you need to do your homework. You need to make sure that the GPO you join has pricing arrangements or agreements with the vendors you already use, and then check to make sure that their contract terms are favorable.”
Resources:
Consider MGMA’s Best Price system, which offers group price and purchasing discounts.
Additional Resources:
Email us at dwilliams@mgma.com if you would like to appear on an episode. If you have a question about your practice that you would like us to answer, send an email to advisor@mgma.com. Don't forget to subscribe to our network wherever you get your podcasts.
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