Are You Burning Money? Know the Signs

February 17, 2010

From the moment Keith Solinsky joined Atlanta Orthopedics as administrator last year, it was clear the practice was hemorrhaging money. Health insurance premiums for its 30 employees were disproportionately high. Supply costs were stuck in the stratosphere. The problem was that no one had been questioning the status quo, Solinsky explains. For example, “no one had ever seen health insurance rates as high as this group was paying. They stayed with the same carriers for years and the companies just kept raising rates and raising rates. I was able to reduce their costs from $676 per employee to $420 - a $40,000 savings. I also shopped around their malpractice insurance and got that lowered by $40,000. From there I just threw everything else out to bid.”

That included janitorial services, medical and office supplies, and promotional and marketing materials, which Solinsky bundled into a single provider for a reduced bulk rate. His efforts paid off. Overall, Solinsky estimates he has saved the practice between $100,000 and $200,000 a year. “It’s really just a matter of looking at every piece of the practice and not being afraid to question every vendor,” he says.

Indeed, when it comes to managing costs at medical practices, it’s rarely a single line-item that throws the budget out of balance. More often, it’s a series of smaller, seemingly insignificant wastes and missed opportunities that contribute most to poor performance.

From inadequate coding to unnecessary referrals, such infractions are easy to overlook. But, for the most part, they’re also easy to fix. Here’s a look at some of the most common ways an otherwise functional office burns money. Read More