pediatric expense management

The importance of appropriately managing expenses in a Pediatric Medical Practice

February 3, 2012 in Blog by support Team  |  1 Comments

A simple evaluation of a practice is Profit = Revenue – Expenses. The ‘old’ days of practicing Medicine there was more forgiveness in managing expenses. This was due to higher margins in the business. Also, with well-designed practice processes, procedures and computer systems, there is a need for less space today than yesterday. If your Pediatric Practice allows patients/parents for walk ins, then you will need to establish your space differently than if all appointments are scheduled via phone and/or the web. Let’s take a look at some considerations on appropriate space planning:

1) If your practice schedules all appointments, evaluate the rate per hour. For example, if you see 4 per hour (25-35 per day), many offices can manage well with 2 exam rooms per provider.

2) If the practice allows walk-ins, evaluate the number of patients seen during the walk-in time during both the busy and slow days to evaluate the range of walk-ins. Determine the number of exam rooms for walk-in over flow based on these extra patients and apply a factor (since the exam room can be shared other times). This might move the number of exam rooms by provider to 3 or a different number.

3) If there are multiple providers in the practice, evaluate the number of providers during any four hour period and evaluate the load (# patients an hour or day) during this period. Although the practice might be open from 8 am – 8 pm with five full time Pediatricians, there might only be 3 providers working at any one time. Using the 2 exam rooms per provider example, the practice would need 6 exam rooms plus waiting room, front desk area, lab area, bathroom(s) and shared offices.

Interesting that walk-in “Minute Clinics” and similar type areas manage their clinics with one room per provider. Interesting that many Pediatric practices built on the ‘old’ model are grossly oversized. This leads to extra cost for Rent, Common Area Maintenance, utilities as well as extra management time. Other areas of business evaluate their sales and expenses on a square foot basis (e.g. Retail segment), I believe the Medical professional should embrace this factor as well. More efficient practices provide a means to drive down health care costs while providing the Pediatricians a good income to support their family. The evaluation of square footage needed for the practice requires a different mind-set and a willingness to change by all involved in the practice. The leadership for the change needs to come from the Physician Partners. The physician partners should consider leveraging Pediatric practice consultants to help them with this evaluation.