Effective Cost Management for Your Medical Practice

Posted: June 10, 2013 in Uncategorized
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Balancing cost containment and quality care is a topic health professionals consistently address. With the filing of every financial report health managers increase efforts in efficient cost management understanding the importance of a comprehensive financial strategy in sustaining a medical practice.

Segmenting health care costs into three parts, an analysis of direct, fixed, and variable costs of a healthcare facility allows health managers to determine cost centers in which efficient cost management can foster financial gains.

Direct costs

As staff compensation care equal nearly 25 percent of a health facilities’ revenue, managers often leverage work hours and employee counts to counteract overhead costs. As effective as leveraging direct costs may seem, it provides health managers with only a short-term resolution. Instead, facilities should concentrate on measures to improve staffing such as enhancing employee competence and improving service delivery. Moreover, though increased employer-employee engagement and incentives a health manager can foster a more effective response to addressing direct costs.

Fixed and variable costs

As fixed and variable costs are congruent with contractual obligations of the practice (e.g., rent, malpractice premiums) contract negotiations are always a viable means of cost saving. Health managers can also look to inventory for cost containment as proper management and use of medical supplies is a practical yet essential means of controlling costs.

Read more at: http://www.physicianspractice.com/pearls/effective-cost-management-your-medical-practice?GUID=486EE5D3-4BF0-4FD4-AD7F-9DC7CAE60C0C&rememberme=1&ts=06062013

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