Another physician knee-jerk decision

Short-Sighted Cost-Cutting Hurts Medical Practice Profits in the Long Run

I was visiting yesterday with a very well qualified practice administrator who informed me that her position was being eliminated in a cost cutting move to prop up the profits of the practice. As you can guess, the wife of the physician is going to now become the administrator (she has been working in the practice the whole time however).

This is another case of a physician stepping over dimes to pick up nickles. Instead of attacking payer reimbursement and aggressively marketing the practice to increase production, the physician would rather cut overhead instead. In these cases, this type of cost cutting is going to hurt the practice instead of helping it in the long run. It doesn't take a rocket scientist to figure this one out.

Forget for a moment that the doctor is already making 300k but can live on this amount.............this is a classic example of a practice operating without a strong strategic plan. Instead, it is making crucial decisions on a day to day basis; does this sound familiar to anyone? I wish physicians would have better business heads on their shoulders but I guess if they did, my consulting work would go way down!!

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.