The ultimate how-to guide to optimize margins and increase revenue at your medical practice

Independent medical practices are less preoccupied with questions of growth than with the challenges of scaling operations and maintaining profitability in the face of several stressors. These include staff shortages, evolving patient expectations, and competition with larger health systems. 

This is especially true now, as rising operational costs in the healthcare sector are driving a healthcare financial crisis. Consider that national health expenditures are predicted to grow at a rate of 7.1% in the coming few years, compared with an expected economic growth of 4.7%, according to an analysis by McKinsey & Company.  

Further, as costs rise, reimbursements are falling. Physicians are facing a 3.36% cut in pay under the proposed 2024 Medicare physician payment schedule.

Given these disparities, how can practices prepare themselves to navigate the uncertain economic environment ahead? In this guide, you’ll learn how to stay on top of your practice's financial performance, optimize operations, and provide exceptional patient experiences — while making your practice more profitable. 

Use digital tools to gain a clear understanding of your financial position and improve practice efficiency. 

Financial performance management is essential. It empowers medical practices to make informed decisions for the growth of their business based on real-time data. Data offers insights on how to approach various financial questions, like whether or not to hire more staff, or expand into a larger office space. It also allows for cost reconciliation — the process of checking that the money you’re spending matches a realistic budget for your practice. 

But how to begin? Practices can start by getting an accurate sense of the overall financial well-being of their practice, which involves evaluating various aspects of the business — revenue, expenses, profitability, cash flow, and financial stability — and using key performance indicator (KPI) software to do so. Some commonly used KPIs for medical practices are: 

Continually monitoring KPIs and billing trends allows for proactive revenue management. Regularly reviewing these metrics can help identify potential issues before they become significant problems, such as increases in claim denials or adjustments. This early detection system can lead to quicker resolutions, protecting your practice's cash flow.

Improve medical billing through financial analytics

One of the most significant and impactful ways to improve medical billing is through data analytics. Comprehensive data analytics can reveal patterns and trends in your billing operations that may not be immediately apparent. For example, if certain insurance providers consistently delay payments or reject claims, your practice could prioritize negotiations with these companies or even consider whether it's advantageous to continue working with them.

With the right data analytics software, you can pull multiple data types with ease, such as:

What’s more, key revenue indicators like claim reactions, denial rates, and net collection rates can inform staff training and education on how to avoid commonly committed billing errors. 

Private healthcare practices are no different from other businesses in that they need consistent cash flow to cover all their costs and survive. By being well prepared with a financial crisis management plan, practices will be more likely to ride out unexpected events and downturns without disruption to their operations. Improve cash flow by applying these 6 strategies:

Taking these steps will not only increase the financial security of your practice, but also prepare you for any future disruptions that occur. 

A combination of process and technology can help you submit clean claims sooner  — while getting you paid faster. 

Electronic claims submissions improves accuracy and processing speed — claims are transmitted instantly and you get real-time visibility into their status, enabling proactive follow-up and resolution. America’s Health Insurance Plans (AHIP) found that insurers typically process electronic claims faster than their paper counterparts.

With this in mind, practices should invest in practice management systems or medical billing software that support it. This way, claims are scrubbed before submission to let you know if there are problems. Your clearinghouse will do the same. With these two checkpoints, you’ll submit more clean claims. The benefits of electronic claims submission are numerous, including: 

In addition, digitizing the claims submission process leads to better resource allocation — staff no longer have to spend time on manual data entry or addressing errors stemming from manual entry, freeing them up to focus on revenue-generating activities. 

Payers may deny payment for any number of reasons — but the most common denial relates to insurance eligibility. The patient’s insurance might have lapsed or the patient might have switched policies without informing the practice. Eligibility checks can reduce claim denial and manage patient payment responsibility. Here’s what you can do to avoid financial pain and losing time to claim resubmissions: 

This leg-work ensures you can bill the correct insurance company for the services provided and prevent billing errors, increasing margins for your practice.

Also, insurance verification helps identify patient responsibilities, such as deductibles, copayments, and coinsurance amounts. Communicating these financial obligations to patients upfront ensures that they aren’t caught off guard, and that you can expect timelier reimbursement. 

The process of submitting claims and getting paid has always been fraught with errors. To combat this, most payers now accept — and some mandate — electronic submission. The majority of practices have had some form of billing software as well. Despite these steps, they still struggle with timely filing and getting paid promptly. While some of the problem lies with payers, here’s how you can still get paid faster: 

If your practice management and billing system doesn’t offer the tools to support this process, then it’s probably time to consider alternatives. 

By embracing automation, or outsourcing to billing companies, healthcare practices can achieve shorter revenue cycle times — and optimized operational efficiency.

Health expenditure in the US will reach 6.8 trillion dollars by 2030, according to the Centers for Medical and Medicaid Services (CMS). In order to stay profitable, many providers are turning to robotic process automation (RPA) to help decrease the time and effort spent on repetitive billing tasks taking providers away from patients. 

RPA is transforming healthcare billing. Using RPA “bots” — customized software scripts that replace the more tedious aspects of medical billing — practices can process payments more effectively and achieve: 

All these improvements work together so practices can improve accuracy, reduce costs, and free up staff for more fulfilling tasks — while increasing revenue. 

Medical billing can be complicated, overwhelming, and time-consuming particularly if you’re a small office that is struggling to hire and fund a dedicated biller. There’s so much to know when it comes to coding, insurance, and collections — and it keeps changing.

A medical billing company can best ensure accurate billing processes and stay on top of trends in patient collections. Accuracy is critical — 50% of rejected or denied claims don’t get reworked, leading to revenue loss. Plus, they provide an array of services such as claims submissions, follow-up, appeals, and more. 

Many are leveraging medical billing automation — patient collections are made more efficient with technological advances from pre-programmed messaging to electronic payment options. 

As the knowledge experts, medical billing companies have systems and workflows in place to optimize revenue collection and don’t require you to train staff. The benefits of outsourcing medical billing are numerous, including:

Hiring experienced personnel can help you navigate the complexity of coding standards, and provide the best care for your patients. Considering how important billing is to the financial health of your practice, paying a monthly fee in lieu of in-house billing hassles may be the right choice for your practice. 

Why do clean claims matter? Clean claims translate to increased net collections — which means more money for your medical practice. To augment clean claim rates, it is essential to undertake a systematic, strategic approach that involves careful identification of problem areas, developing solutions, and maintaining diligence in billing processes.

To improve clean claim rates in medical billing, providers should start by identifying the 1 or 2 claims categories that result in either the largest number of rejections or the largest dollar amount to your bottom line. 

Once identified, delve into the root causes of these rejections. Establishing policies and procedures to curtail these rejections can significantly reduce their recurrence. Repeat this process, focusing on a different problematic category each time. Remember, this requires a concerted team effort — motivate your staff by setting “no-rejection” targets.

More generally, practices should be sure to: 

By following these steps, providers can improve their First Pass Acceptance Rate (FPAR), prevent front-end rejections, reduce follow-up efforts, and eliminate labor-intensive filing of denials. 

Tech upgrades can help you save time and improve patient experience — while optimizing operations as you grow. 

In today’s challenging healthcare environment, healthcare practices need all the technological help they can get to drive efficiency and do more with less. Though national data suggests staffing shortages lessened late last year, workers are still leaving their positions at rates that far exceed those in the previous decade, according to Fitch Ratings. 

Automation in healthcare can help medical practices streamline tasks, deliver better patient experiences and remain profitable with: 

Automation doesn’t just help optimize your practice — it creates convenience for current and future patients and fosters patient loyalty to increase your bottom line. 

When evaluating practice management software, consider those that are scalable, secure, and integrate with other systems you currently use. The more information you gather beforehand, the more likely your choice will align with your practice’s business needs and goals. 

A healthcare tech stack is an entire suite of applications that connect together in one platform. It lets both you and your patients handle routine interactions digitally while improving your practice workflows — from appointment booking to managing your online presence, all in one place. The benefits of a single platform are many, including: 

There’s a lot to gain from consolidating to a platform — interoperability, flexibility, scalability, data-driven insights, and data security. Also, it’s cost effective. Rather than having to update and maintain various one-off solutions, practices can leverage a unified tech stack for all of their practice management needs. 

Patient experience is an objective measure that represents a patient’s perception of care across multiple touchpoints. Find out if you measure up. 

An effective patient experience survey encompasses everything from the ease of booking an appointment, to the quality of care a patient receives, to follow-up care and payment. 

Seventy-five percent of patients say online reviews are “very or extremely important” when considering a practitioner. A short, post-visit questionnaire, a patient experience survey is an often overlooked way to improve patient care and generate reviews for your practice’s website. 

Send patients a short, electronic survey within a few hours after their visit to capture patient feedback while it is still fresh. The survey should ask questions that address the many touch points across each patient’s journey. Be sure to ask about:

Gaining an understanding of your patients’ experience of your practice is a key step in moving towards patient-centered care. 

Benchmarking is an effective way for medical practices to evaluate their performance and pinpoint what they’re good at and where they need improvement. In turn, they can improve the quality of care they deliver to patients. To set benchmarks and measure patient satisfaction, practices can use existing professional surveys such as: 

The CAHPS (Consumer Assessment of Healthcare Providers and Systems) survey is a standardized patient survey developed by the Agency for Healthcare Research and Quality (AHRQ) to measure patients' experiences and satisfaction with healthcare services. It provides valuable feedback directly from patients and covers topics such as communication skills of providers and ease of access to healthcare services. 

Press Ganey is another well-known patient satisfaction survey, widely used by medical practices to gather feedback from patients. It includes questions to measure different aspects of the patient experience, such as communication with providers, staff responsiveness, wait times, facility cleanliness, and overall satisfaction. 

Net Promoter Score (NPS) is a market research metric that allows businesses to obtain feedback from customers about their experience with your products or services. A healthcare NPS measures patient satisfaction by asking how likely they are to recommend your medical practice. 

Alternatively, practices can also assess what data they have available — via their EHRs, practice management systems, or billing software — and select a few key performance indicators to focus in on. This allows you to determine underperforming areas and make changes for better overall financial health. 

Effective patient education improves outcomes and empowers individuals to become active participants in their own care. 

Whether it’s short term plans and information for acute illness, long-term strategies for chronic disease management, or health and wellness promotion, the importance of incorporating patient education into clinical practice is critical.

Patient education influences patient behavior, and it can be a powerful tool to change knowledge or attitudes towards health. 

However, with an estimated 6.75 million internet queries on health-related topics conducted every day, research indicates that limited access to patient education content opens the door for patients to Google their questions and be exposed to medical misinformation. What people research on the Internet can clash with what they're actually dealing with.

What does optimal patient education look like? It involves recognizing patients’ readiness to learn, a trusting relationship, the ability for patients to ask questions and get feedback, and opportunities for them to show they understand what they have learned. In addition, interactive learning is best, with handouts or digital materials tailored to patients’ education and cultural background. This ensures that all patients have an equal opportunity to receive quality care and achieve optimal health outcomes.  

Ninety-four percent of patients want education content, but a third don’t get it. Practices can address this head-on with the help of digital tools. To increase impact and reach, practices can move beyond informal brochures and educational pamphlets, and use multiple modalities, such as mobile apps, patient portals, telehealth, and/or social media. 

Access to digital educational content isn’t just a “nice to have.” Consider that 50% of patients forget treatment plans and need better tools like portals to recover information and adhere to their care plans. As practices look to enhance their approach to patient education, here are 4 patient education examples: 

Digitalized patient education also allows patients to access the information as frequently as they need, increasing the likelihood of comprehension. 

Give patients the same efficiencies they encounter in the rest of their on-demand lives — including digital interactions, self-service, and hassle-free communication.

Patients want the control and ability to use technology to manage their own healthcare. The first step in improving their experience is offering digital tools at every touchpoint. 

Sixty-eight percent of patients say they’re more likely to choose providers that offer the ability to book, change, or cancel appointments online. By allowing patients to engage with your practice on their personal device, without needing back-and-forth phone calls or follow-up, you’re also decreasing the likelihood of no-shows or missed payments — which directly impacts your bottom line. 

Apply the following digital conveniences to your workflow: 

With the rise of healthcare consumerism and the shift to patient-centered care, there’s a clear demand for modernization. Practices that meet the demand will be poised to exceed patient expectations and foster patient loyalty — while saving time for their staff and reducing administrative costs. 

Cultivate lifelong relationships with new and existing patients by applying convenience and connection at every point in the patient journey. 

Most of today’s patients are digitally savvy and turn to the web when it’s time to find a new healthcare practice and reviews are an essential part of a comprehensive marketing strategy. 75% of patients say online reviews are “very or extremely important” when considering a practitioner. 

By making it routine to collect patient feedback, practices can get 5-star reviews and amplify their online presence. Here’s how: 

Getting a handle on your online reputation management is a must for attracting new patients. People put a lot of stock in online reviews — giving current patients a voice can attract new patients, keep existing patients coming back, and boost your practices’ profit margins. 

Taking time to connect with new patients is so important — it’s in those initial meetings that you establish a relationship, build trust, and improve patient retention. Yet, 62% of doctors spend just 13 - 24 minutes with each patient. Providers are losing time to administration such as charting and other paperwork. And chances are, their teams are overworked too, so doctors feel compelled to pitch in. To free up your team’s schedule, practices should automate routine tasks and prepare in advance for each visit. Follow these steps to spend more time with new patients: 

The lifetime value and relationship with every new patient is paramount — thinking otherwise might mean short-changing opportunities at ongoing revenue. Offer your patients a kind, personal touch and work on listening empathetically. Forty-three percent of patients would switch providers for a doctor who is a good listener.  Ultimately, loyal patients can be your best advocates, generating additional business. 

Communication is at the core of what it takes to retain a patient — how and when you reach out to patients, and what you say to keep their business. Consider that 67% of patients want appointment reminders through digital interactions like text, and 61% want digital ways to make their next appointment. To inform your patient retention strategy, here are 5 tactics to implement: 

A satisfied patient is almost always a loyal patient — and that means a greater likelihood they will book regular visits for necessary care and follow-up. Build long-term relationships with new and established patients by offering convenience and ease and listening to their insights. 

Take advantage of online appointment scheduling and other modern conveniences to lighten the workload on staff and give patients simple, intuitive experiences that improve their access to care. 

Online patient scheduling lets patients find providers and book appointments 24/7. And 94% of patients would be more likely to choose a new service provider if that provider offered online booking options. This, in turn, gives your staff a break from fielding phone calls, lets them direct their focus towards revenue-generating activities, and increases revenue by securing more bookings.

Further, putting appointment scheduling in patients' hands empowers them to take control of their health journey wherever they need care — whether virtually or at a doctor's office. 

If online patient scheduling is already offered via your practice online, it’s time to cast your net wider. Here’s 4 additional places to prompt patients to schedule appointments: 

When a practice adds secure online appointment scheduling to its website and online profiles, potential patients who are already looking for healthcare information will be clicks away from scheduling the appointment they need. Offering online patient scheduling gives you an edge on the competition, but get the most from it by maximizing your reach. 

Long wait times — both to see a clinician and to book an appointment — can have a negative impact on patient satisfaction and patients’ experience of your practice. Consider that 1 in 5 patients say they have switched doctors because of long wait times, and 30% of patients have left a doctor’s appointment as a result. More critically, when wait times for appointments are too long, patients may experience worse health outcomes and are often left to use emergency department resources. 

One systematic review on the topic found that open access scheduling significantly reduced wait times and is the most widely implemented intervention to reduce wait times in primary care settings. Here are 3 ways to improve patient wait time: 

Working towards minimizing wait times will demonstrate your commitment to improving patient experience and will help you retain patients in the long run. 

Private healthcare practices must address employee retention to meet patients’ need and keep their business running productively — and automation plays a critical role.

An exceptional staff is one of the most valued assets you can have. But across the sector, staff are leaving their positions in record numbers. Thirty-three percent of non-clinical staff are reporting intent to leave their roles. Here are 6 best practices to retain your best employees while improving patients’ experience of your practice: 

The COVID-19 pandemic increased stress across the entire healthcare workforce, and the problem of burnout persists today. Approximately 50% of respondants reported burnout, with the highest levels among nurses and other clinical staff. Approximately 33% of non-clinical staff and 31% percent of clinical staff are reporting intent to leave their jobs. These numbers highlight the pressing need for medical practices to prioritize the well-being of their employees. 

Prevention is key. Actively listen to your staff, and consider their suggestions. Practices should be proactive and look at the pain points and sources of stress within their office — and take steps to remedy them. Consider the following actions to address burnout and and improve employee retention in healthcare: 

What’s more, providers should take the time to notice and observe how their staff is doing and offer help. Substance abuse in medical professionals is not uncommon, so if you notice staff member struggling, it’s important to be knowledgeable of warning signs to look out for.

From check-in to check-out, private healthcare practices have traditionally faced a mountain of daily administrative work. The front desk team is charged with managing the office and the patients, with a task list that can feel a mile long. 

Many medical practices are seeking ways to streamline operations, reduce healthcare worker burnout, and retain their valued staff. Manual and repetitive tasks, such as phone-based appointment scheduling, consume valuable time that practices simply don’t have. Further, studies reveal that 80% of patients actually prefer physicians who offer online scheduling options. 

By leveraging automation, practices can alleviate the burden on their front-desk staff while enhancing patients’ impression and experience of your practice. Here are the top 5 tasks to office tasks to automate:

By using simple technological tools, providers and their staff can manage their significant workload with greater ease, control, and success — and focus on providing patient-centered care. 

How can medical practices remain financially viable and thrive? The answer is proactively embracing technology and automation. With the help of digital tools, practices stand to enhance their financial management, operational efficiency, patient retention and attraction, as well as staff retention and performance — and grow profitably and pain-free. Secure the financial future of your business and stand out in this competitive landscape today.