Is overhead really to blame for today’s woes?

I recently saw the recent blurb in an email newsletter called Physician News Briefs:

Diagnostic clinic short on docs

Once a vibrant and expanding practice in the medical community, the Amarillo Diagnostic Clinic is beginning to wither as doctors continue to leave. By the end of the month, three of its four internal medicine doctors will have left the clinic at 6700 S.W. Ninth Ave.

Internist Olga Smirnova, who is leaving March 31 to work for Baptist St. Anthony's Hospital, said the clinic is "not stable lately."  "It's too much overhead pay," she said. "Let's put it that way."  Amarillo Diagnostic for years was one of the largest - if not the largest - collection of doctors in Amarillo working outside a hospital or medical school.  Many parts of the clinic are now vacant and administrators keep dropping and losing services, some of the reasons Smirnova cited for leaving.

Here is my simple response to this: IT’S NOT ABOUT OVERHEAD ANYMORE – IT’S ALL ABOUT THE TOP LINE!!!!

Overhead is such an easy target for physicians because it’s something they see every day and it’s easy to pick on to prop up the bottom line. However, in most medical practices, can overhead really be cut that much? My answer is no in almost all of the medical practices I consult with. Sure you can “nickel and dime” it but are the reductions really end up that material?

DEAR PHYSICIAN……..start concentrating on doing what it takes to maximize productivity, add new services, etc. to maximize your top line and therefore increase your bottom line. Quit blaming overhead as your problem when in fact if you take a hard look at it, it’s really not your problem at all.

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.