Several businesses are witnessing the effects of inflation. However, medical practices tend to be hit the worst, considering the way insurance companies dictate payment patterns. Moreover, practices don’t have the ability to increase their prices, and the present labor market tends to favor workers so keeping positions filled is challenging. In some cases, workers are requesting more compensation than in the past, which is understandable given the intense competition for competent labor.
So how is inflation affecting medical practices?
Impact Of Inflation On Medical Practices
There is no question that a quickly growing inflationary environment may have drastic consequences for health care practitioners, whether in private practice or institutional employment. To begin with, employee salaries, including ancillary suppliers, as well as products and services, will keep climbing, straining already low margins.
This margin compression, described in economic terms as rising input costs quicker than rising product sales, may cause layoffs or reorganization of human capital if the practice’s personnel expenses become unsustainable. Such implications might have a severe impact on the quality and accessibility of treatment provided to our patients.
One of the most significant issues in contemporary medicine is that, except for certain concierge or out-of-network services, the majority of healthcare practices and facilities nowadays have minimal or zero pricing power owing to their dependency on insurance or third-party payments for facilities. The capacity to increase prices without reducing demand or losing market share to a rival is known as pricing power. Unfortunately, insurance-related compensation is usually out of their control. So, most doctors find it difficult to maintain their insurance and patient payments in line with the current market and overhead circumstances.
Inflation is projected to have the greatest impact on providers’ payroll expenditures. Staffing shortages cause expenses to rise as providers boost wages to attract and keep new employees, pay overtime fees, and recruit additional temporary workers. To maintain a stable inbound cash flow and margin improvement, providers that wish to strengthen their cash flow against the possible effect of inflation can concentrate on enhancing labor efficiency to control costs and limit the risk of postponed care.
So is there any way that medical professionals can save themselves from the adverse effects of inflation? Yes, there are. Check them below.
Steps Physician-Owned Practices Can Take Against Inflation
1. Automation and digital tools
By boosting the productivity of current procedures, automation and digital solutions may assist in addressing personnel shortfalls and keeping payroll expenses under control. For instance, digital technology may enable patients to do numerous administrative tasks on their own, so it eliminates the need for staff participation.
Patients can schedule appointments and complete pre-service documentation without taking up vital staff time using online registrations and self-scheduling. These systems use data and automation to pre-fill patient data which reduces the likelihood of expensive mistakes and saves patients and staff time.
2. Outsourcing business functions
A physician-owned practice will likely have the need to fill administrative staff positions. Rather than competing in a competitive employment market, consider outsourcing certain work responsibilities. Often, you may locate vendors that offer administrative services at lower prices. With this, they may also offer a higher ROI than a comparable full-time employee. Medical billing, credentialing, authorizations, etc., are the things medical practitioners can outsource.
3. Helping patients understand the medical billing
By implementing technologies that provide more pricing transparency, providers may aid patients in comprehending their hospital expenses and payment choices. They may make comfortable arrangements with the aid of upfront patient estimates. These go right to their smartphone and include links to the proper financing options and payment ways. Patients will be encouraged to seek treatment sooner by knowing that costs have not grown much as a result of inflation.
How Can NEMB Help Physician-Owned Practices?
Expert understanding of medical billing is necessary, and it might take years to become proficient. Too often, hospital ambulances or other medical transportation firms, schools, and medical centers lose money as a result of incorrect or delayed claim processing.
When you work with NEMB, you and your team will have access to all of our expertise and resources. To save you from becoming too involved in the administrative procedure, we simplify the medical billing process for you. Additionally, you’ll experience higher revenues than you have in recent times!
Managing a medical practice is challenging regardless of the level of inflation. Ensure effective collection procedures to boost income. Being smart about which procedures you may outsource and placing them in the hands of specialists allows you to concentrate on patient care.