I joined an Internal Medicine group in 2002.I was in this group for a number of years. It was the first time I had been a member of a private practice. I enjoyed it very much. Each physician had a specific area that he managed as far as the business issues of the clinic. One partner was particularly adept at collating numbers. He provided a monthly summary of our income from many different sources including our fully functioning lab and x-ray services. He was able to show each partner’s individual earnings.

We had weekly meetings on Tuesdays and discussed business issues. At my first meeting, we learned that we had to replace all the phones. I suddenly recognized that this expense was going to be covered by US and NOT the hospital across the street who owned our office space. We also discussed converting our paper charts to an Electronic Medical Record system. How much was this going to cost? We bought a Bone Density machine. Now, that was expensive. Rent was always a topic of concern since we all knew that a lower rent facility would mean more take home pay. One partner wanted to rent a house down the street and have patients see us there.

We struggled to determine the appropriate wages for our staff. We had an amazing nurse who had been with the group for many years. She could do everything seemingly at the same time and was a wonderful person. The problem was that we tended to increase our staff’s pay as they stayed with us, year after year. She also required an especially generous wage since she was so invaluable. She was expensive! We also had to provide health insurance for ourselves and the staff. This issue was reviewed and changed frequently to try to keep the cost down.

I have noticed that the front desk staff in many private practices turns over frequently. Our manager always seemed to be hiring people who then required one on one training. This process is time consuming and expensive. We were able to reduce our billing staff from three to one which did reduce our overhead . If we had to let an employee go, it was difficult since we felt a loyalty to that person and we often developed friendships with our staff members .Some medical practices hire family members who are particularly difficult to let go. However, we appreciated that having too many staff members could determine whether we survived or did not survive, as a private practice.

Some of the more routine expenses included payroll taxes, stationary, postage and office supplies. Utilities, equipment maintenance and data processing all increased our overhead cost. It seemed to be never ending !

In my current practice, I have found a great answer to many of the expenses mentioned, Outsourcing. Outsourcing has many advantages to a private practice. It reduces paperwork and reduces staff in the office. The money paid to employees for their work and benefits can be recouped since less staff is needed. Off sight billing is often more efficient and payment denials rates and cash flow improve due to the advanced software used by these companies. Billing companies offer more affordable rates since they have a huge client base. ICD 10 coding is much more complex than the old ICD 9 coding. Off sight companies often have the newer and more complex software to handle these new codes. What I have mentioned so far, is only a fraction of the many benefits of outsourcing . Hindsight is 20-20. I wish I had tried to outsource more of my office expenses when I was in my 2002 medical practice.