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Use Economy to Make Needed Changes

Today's economic uncertainty offers the perfect excuse for making changes you’ve been putting off far too long, particularly those related to personnel and performance. As dermatologists face unprecedented business challenges, there are a number of proactive steps you can take to strengthen your bottom line—without increasing your costs.

By evaluating each of the areas below, you'll find opportunities to better manage expenses, streamline operations, and create financial resiliency through the market's ups and downs.

  • Overall Payroll — This represents the most expensive line item for nearly every business, including dermatology practices. Many practices have not closely evaluated their payroll against current business needs to determine if they are staffed appropriately, or if they should reduce/combine job responsibilities. In "good times" this is not a problem. In today's economy, however, you cannot afford the risks and costs of being overstaffed. Each of the subsequent areas below directly impacts this costly line item.
  • Office Staff — It's time to evaluate the efficiency and productivity of both your front-office (e.g., receptionists) and back-office (e.g., medical assistants) staff. Can you get by with less, without aversely impacting customer service or performance? Conduct an evaluation of your team's workload and activities—from phone calls to data entry to patient service—particularly during busy times to determine levels of performance and if changes can be made.
  • Additional Providers — While additional physicians, mid-levels, nurses, estheticians, and other service providers offer a good opportunity to increase profitability, you must ensure each of them is "pulling their weight" against what you're paying them. A simple cost analysis and evaluation of their productivity can provide clear answers. Are their schedules full, or are there gaps? Are they attracting new patients to your practice, or just "hitching a ride?" If paid hourly or by salary, consider adjusting their compensation based on production and performance.
  • Billing Operations — There are significant costs associated with managing your billing in-house, not to mention your time and effort required to oversee the function. Weigh the expense of your billing staff (and associated costs) against their productivity and collections performance to determine if outsourcing may be a more cost-effective, efficient option. Doing so can improve your billing performance and enable you to shift or reduce staff accordingly.
  • Merit Increases — It's important to educate your staff on the current business challenges—reminding them of the record high unemployment rate—to better manage expectations around raises and bonuses. You don't have to eliminate them completely, particularly if you're concerned about losing key staff members as a result. Rather, it's an ideal time to tie these increases to individual and practice performance (based on goals). After all, it's not an entitlement, but rather something earned. Also, there are a number of ways to reward employees and show appreciation beyond financial compensation.

Re-evaluating any or all of these areas will help you right-size your team, perhaps trim some fat, and be in a better position to succeed in today's—and tomorrow's—economy.