One reason revenue is greater at the better-performing groups is physician productivity. Group success is credited to the quality care and strong work ethic of their physicians – highly qualified, hard-working, patient-oriented physicians.
Cost management performance also separates better performing physician practices from the rest of the crowd. Better performers understand what it costs to deliver care because they have accurate and easily accessible cost data. This allows them to evaluate their care delivery and make informed business decisions. This also helps in evaluating whether managed care contracts will be profitable.
Like any business, better performing practices recognize that they must also understand what it costs to provide medical care in order to be truly successful under current market conditions. The leaders of these practices approach management of the organization as running a business, and use tools to analyze and control costs.
So do you want to become a better performing physician medical practice? Consider using the following techniques to increase profitability:
§ strategic and profit planning;
§ cost management;
§ evaluation of capital structure and investments;
§ evaluation of tax policy and management;
§ internal controls; and
§ financial reporting and performance evaluation.