A presentation by Jim Stroud of Warren, Averett, Kimbrough & Marino, presented on September 21st 2010 to the Decatur Alabama MGMA luncheon attendees.

1. Improving Practice Profitability
JAMES A. STROUD, CPA
Warren, Averett, Kimbrough and Marino, LLC
2500 Acton Road, Birmingham, AL 35243
(205) 979-4100
Jim.Stroud@Wakm.com
www.WAKM.com/healthcare

2. Cutting Costs
 Eliminate the use of the some goods or services
 Sunset mentality - what happens if we do
without?
 Is the need driven by a flawed or outdated
decision?
 Every item is a candidate.
 Use MGMA data for comparison purposes.

3.  Shop for Different Brand or Provider
 Avoid the “We’ve always bought there”
mentality.
 Top 20% medical and office items - competitive
bids.
 Can use of available staff time lower the cost to
outsiders?
 Negotiate a Lower Price
 Ask preferred vendor to match lowest price.
 Delegate to an employee who “takes
ownership.”

4.  Get outside consultants to assist.
 Ask vendors “How can I reduce my costs?”
 Find Some Way to Subsidize the Cost
 Identify the “interested parties” to your practice.
- Drug and supply companies.
- Equipment manufacturers
- Landlord
- Other vendors
- Entities to whom you refer
 Ask them how they would like to help you.

5. Don’t Overlook the Biggest Item in the Budget
 Compare salaries to surveys.
 Lower or eliminate overtime.
 Summarize total package.
 Convert sick, vacation, etc. to personal days.
 Review part-time staff situation.

6. Increasing Revenue
 Add Physician Time to the Year
 Lengthen work week.
 Take fewer vacations.
 Are you ready for a new associate?
 Improve the tempo.
 Pack the schedule.
 Productivity
 Capture all charges.

7.  Code consistently and correctly.
 Account for charge tickets.
 Review Fee Schedule
 Annual fee schedule.
 Compare increases to third party payor.
 Identify the profitable vs. loser procedures.
 Check the Payor Mix, Procedure Mix, and Referral
Mix
 Review several years for payor mix trend.

8.  Analyze your procedure mix.
 Who is not referring to you - and why?
 Match Capacities to Demand
 Where are the bottlenecks?
 What limits your practice?
 Use of physician extenders.
 Nights and weekends?
 Add NEW Revenue
 New procedures.

9.  New services.
 New referral sources.
 Satellite offices.
 Hire other specialists.
 Establish a web site.
 Collect for what you do
 Who appeals claims and what is outcome?
 Are you collecting most co-pays and
deductibles?

10.  Revise collection procedures.
 It starts at the scheduling point.
 Review professional discounts and courtesy
write-offs.
 Get the right temperament person involved.
 Conclusion
 Word of Caution - Profitability Defined