Cut costs without cutting corners to keep the office efficient

The boilerplate letter reduces the cost per letter from around $15 to $1 (factoring in the cost of time spent crafting individually written letters), increases efficiency, and keeps the referring doctor as the “captain” of the patient's health care ship (in the case of referrals from primary care physicians), Dr. Baum said.

Lower the overhead

There are several areas in which a practice can cut costs, which together add up to big savings, Dr. Baum said. They include:

Transcription. About $1,000 per month per doctor is spent on dictation in typical practices, Dr. Baum said. In addition, there is often a delay between the time a patient is seen and the relevant dictation is transcribed. Investing in voice recognition software “pays for itself in less than 90 days, and reduces those costs from $1,000 per month to pennies per month,” Dr. Baum said. Some versions are 99% accurate, and they are available for dozens of subspecialties, he said.

Phones. Consider reducing the number of phone lines; checking that the practice isn't being billed for numbers canceled in the past and that bills don't contain erroneous charges; and asking the phone company if it might have a service that better suits the practice.

Advertising. Few people find physicians through display ads in the phone book anymore, Dr. Baum noted. “If you are going to advertise, I recommend using the Internet instead. If you do place an ad in the phone book, keep it limited to the practice name, address and website.”

Staff. If it's feasible, reduce employees' schedules to four or 4.5 days per week. If a full-time employee resigns, consider replacing him or her with two part-time workers, in order to forgo health insurance and benefits. As for full-time benefits, consider offering employee-only health insurance instead of family coverage; increasing the deductible; and omitting dental and vision coverage.

Supplies. To reduce the cost of supplies, get printer cartridges refilled rather than buying new ones; develop a system for monitoring supplies and keep them on hand for three days instead of three months; and ask your suppliers for discounts. Using the U.S. Postal Service instead of Federal Express also saves about $5 per piece of overnight mail, Dr. Baum said.

Website. Create a site that patients can use for paying bills, making appointments, requesting prescription refills online, and downloading forms and educational materials (which saves the practice on printing costs). A site also helps cut down on communication expenses like postage and telephone service, he noted.

Rent. Look into the vacancy rate in your practice's building to see if the landlord is having trouble attracting tenants; if so, he or she may be more open to renegotiating the monthly rent. Another tactic: When the lease is about to expire, see if you can get a lower rent as a condition of extending the lease.

Payment. Collect the patient's portion of a bill upfront. Practices that do this report a 7% increase in collections, Dr. Baum said.

Innovation. Call a staff meeting and explain you will reward employees who suggest money-saving ideas with 5% of the savings of amounts up to $10,000, and 2.5% of the savings of amounts from $10,000 to $50,000. “We had an old autoclave machine that broke, and rather than buying a new one, an employee found a $150 fix via an engineer friend of hers. She got $100 for that suggestion, and the engineer who fixed it got $100, too,” Dr. Baum said.

Today's private practice physicians face a seemingly insurmountable problem: Reimbursement is declining and overhead costs are rising, yet patients demand more time and access to physicians than ever.

“We need to see more and more patients in the same amount of time,” said Neil Baum, MD, a New Orleans urologist, during a session at the Medical Group Management Association's annual conference in New Orleans last October. “How do we do this? By improving efficiency, increasing productivity and decreasing overhead costs.”

Tightening up scheduling, using a scribe, streamlining patient education, revamping referrals and cutting overhead expenditures are the tactics to use, he added. “I am using these measures; I have tested them, and they genuinely work,” Dr. Baum said. “I'm a urologist, but my ideas are transferrable to other types of practice.”

Tighten up scheduling

The first step to keeping the office on schedule is determining a realistic patient-per-hour rate. Start by conducting a time-and-motion study, Dr. Baum said. Over the course of a week, have an employee keep track of the time each patient arrives in the office, the time each one is taken to the exam room, the time spent with the physician, and the time the patient leaves the office.

Next, classify each patient's time into categories of medical time (time spent with a physician), “delegatable” time (time that was or could be delegated to non-physician employees) and wasted time (time spent waiting). Evaluate each interaction to the quarter-minute, and determine where patient, doctor and staff time is being wasted or used inefficiently. Reshift job duties as needed to better align staff with different segments of the patient visit.

Then, create common categories of care in the practice, and estimate how much face-to-face time with a physician each type of visit requires. In Dr. Baum's practice, for example, a new-patient visit takes about 20 minutes, a postoperative patient takes five minutes, a routine annual exam takes 7.5 minutes, a prostate-specific antigen (PSA) test follow-up takes three minutes, a visit about complicated incontinence takes 20 minutes, and a newly diagnosed cancer patient takes more than 30 minutes. Knowing the average visit time helps with planning daily schedules accordingly, he said.

To help keep appointments on track, build “sacred time” into the daily practice schedule. This is a 15-minute, unscheduled block of time reserved for urgent and emergent patients whose visits might otherwise eat into the appointments of scheduled patients. After sacred time was instituted at Dr. Baum's office, waiting times went from 30 to 35 minutes to about 15 minutes per patient, he said.

Spending long stretches in the waiting room is one of the top causes of patient dissatisfaction, so be sure to actually show up to the office on time, Dr. Baum added. “Some patients wait two hours to spend five minutes with their doctors,” he said. “Patients will leave your practice over this.”

Certain delays are unavoidable and out of a doctor's control; in those cases, physicians should call their offices so patients can be informed. In Dr. Baum's office, patients are given the option of leaving and receiving a phone call later in the day when a slot is available, or rescheduling to a different day. Those who choose not to leave the office are given a coupon to buy coffee at a nearby café. If a patient appears very upset about a wait, he or she is treated for free.

When the patient is finally seen, it's important for the physician to apologize, Dr. Baum said. “‘I'm sorry’ works,” he said.

Use a scribe

Once you've determined how much time the physician(s) in the practice should be spending with each patient, a scribe can help ensure physicians do only the medical work for which they were trained. Here's how Dr. Baum uses a scribe in his office for most visits:

1. 1. The physician introduces himself/herself to the patient, telling the patient that the scribe (whom s/he addresses by name) will come in shortly to gather additional information.
2. 2. The scribe comes in, takes the patient's medical history, history of present illness and review of symptoms. This takes about 15 minutes, and the physician sees other patients during this time.
3. 3. The scribe leaves, and concisely presents the patient information to the physician.
4. 4. The physician enters the room and examines the patient based on the information obtained from the scribe. While performing the exam or procedure, the physician wears a Bluetooth and dictates notes on the patient to the scribe, who is recording the notes in another room and entering information into the electronic medical records system.
5. 5. The physician leaves the patient, and reviews the plan of action for the patient with the scribe. While the physician leaves to introduce himself or herself to a new patient, the scribe compiles end-of-visit paperwork (for example, prescriptions, receipts, educational material) for the first patient.
6. 6. By the time the physician is done meeting his newest patient, the final paperwork on the previous patient is ready. The physician returns to the first patient, presents the plan of action, and answers any final questions.

“Using this method reduced the actual time spent with a patient during a standard visit from 15 to 20 minutes to less than five minutes, in my practice,” Dr. Baum said. “You can see more patients and do more procedures if you use a scribe.”

If, by using a scribe, a physician is able to see one extra patient an hour in a seven-hour day, it adds up to seven additional patients per day. With each patient bringing in $75 in revenue, and a scribe working five days a week for 48 weeks a year, that means an extra $126,000 per year, more than double a typical scribe's salary, Dr. Baum noted.

Streamline patient education

When it comes to patient education, most doctors and practices give the same spiel over and over. To save staff time, Dr. Baum has created five-minute educational videos, starring himself, about the conditions for which he sees patients most often: PSA screening, vasectomy, evaluation of erectile dysfunction, ultrasound and prostate biopsy.

“Making videos takes an investment of time and money up front, but it more than pays for itself” in preserving staff time for other activities, he said. Patients may watch these videos before a procedure or at the end of an examination to learn about a given condition or treatment.

To create videos, a practice needs access to a video camera, like a Flip camera (about $100), cell phone or digital camera with video; a tripod; and a script. Creating the script requires some thought about the most common subjects of patient education in the office, which usually correspond to the most common type of visits. Potential video topics for primary care physicians include cancer screening, the annual exam, colonoscopy, nutrition, osteoporosis and hypertension, Dr. Baum said.

The elements Dr. Baum includes in his script are:

• description of the topic,
• explanation of why the topic is important to the patient's health,
• risks and complications associated with the condition or procedure,
• alternatives to the procedure or prescribed care plan, and
• a “what's next” statement, such as: “I will return to the room after you have completed the video to answer any questions that you may have and provide you with a summary of the video.”

Once a script is written, the physician simply tapes the conversation he or she wants to have with the patient, Dr. Baum said. The practice can hire a local video editor to spruce up the presentation, he said.

“While the patient watches the video, I'm seeing another patient. It makes me one-third more efficient, and it also provides medical-legal protection,” Dr. Baum said. “If you want, you can make an accompanying true/false questionnaire to make sure the patient understands the material at the end, and put it in the patient's chart.”

Examples of videos can be viewed online or by searching “Neil Baum” on YouTube.com.

Revamp referrals

Overhauling the referral process can also increase efficiency and revenue for a practice, by making other doctors more likely to refer to you, Dr. Baum said. “Research has shown that one of the top reasons Physician A refers to Physician B is that he hears back quickly from Physician B about his patient,” he said.

While a traditional referral letter is lengthy and arrives by mail in 10 to 14 days, Dr. Baum's office faxes letters to referring doctors while the patient is still in the office. “We send the letter as the patient watches, via computer fax,” he said.

It helps to have a boilerplate letter with blanks for the patient's diagnosis, medications and treatment. Dr. Baum's looks like this:

Dear [Name of doctor],

[Name of patient] was seen for a problem of [diagnosis]. I recommended [medications and treatment plan].

I will keep in touch with you regarding her progress.

Sincerely,

Neil Baum

The boilerplate letter reduces the cost per letter from around $15 to $1 (factoring in the cost of time spent crafting individually written letters), increases efficiency, and keeps the referring doctor as the “captain” of the patient's health care ship (in the case of referrals from primary care physicians), Dr. Baum said.

Lower the overhead

There are several areas in which a practice can cut costs, which together add up to big savings, Dr. Baum said. They include:

Transcription. About $1,000 per month per doctor is spent on dictation in typical practices, Dr. Baum said. In addition, there is often a delay between the time a patient is seen and the relevant dictation is transcribed. Investing in voice recognition software “pays for itself in less than 90 days, and reduces those costs from $1,000 per month to pennies per month,” Dr. Baum said. Some versions are 99% accurate, and they are available for dozens of subspecialties, he said.

Phones. Consider reducing the number of phone lines; checking that the practice isn't being billed for numbers canceled in the past and that bills don't contain erroneous charges; and asking the phone company if it might have a service that better suits the practice.

Advertising. Few people find physicians through display ads in the phone book anymore, Dr. Baum noted. “If you are going to advertise, I recommend using the Internet instead. If you do place an ad in the phone book, keep it limited to the practice name, address and website.”

Staff. If it's feasible, reduce employees' schedules to four or 4.5 days per week. If a full-time employee resigns, consider replacing him or her with two part-time workers, in order to forgo health insurance and benefits. As for full-time benefits, consider offering employee-only health insurance instead of family coverage; increasing the deductible; and omitting dental and vision coverage.

Supplies. To reduce the cost of supplies, get printer cartridges refilled rather than buying new ones; develop a system for monitoring supplies and keep them on hand for three days instead of three months; and ask your suppliers for discounts. Using the U.S. Postal Service instead of Federal Express also saves about $5 per piece of overnight mail, Dr. Baum said.

Website. Create a site that patients can use for paying bills, making appointments, requesting prescription refills online, and downloading forms and educational materials (which saves the practice on printing costs). A site also helps cut down on communication expenses like postage and telephone service, he noted.

Rent. Look into the vacancy rate in your practice's building to see if the landlord is having trouble attracting tenants; if so, he or she may be more open to renegotiating the monthly rent. Another tactic: When the lease is about to expire, see if you can get a lower rent as a condition of extending the lease.

Payment. Collect the patient's portion of a bill upfront. Practices that do this report a 7% increase in collections, Dr. Baum said.

Innovation. Call a staff meeting and explain you will reward employees who suggest money-saving ideas with 5% of the savings of amounts up to $10,000, and 2.5% of the savings of amounts from $10,000 to $50,000. “We had an old autoclave machine that broke, and rather than buying a new one, an employee found a $150 fix via an engineer friend of hers. She got $100 for that suggestion, and the engineer who fixed it got $100, too,” Dr. Baum said.