The study factors in total charges, minus fixed and variable costs for a typical practice and proves that a 5% reduction in patient volume for a practice results in a 13% reduction in physician compensation and benefits. Startling as that statistic is, it gets exponentially worse the more patient volume decreases: A 10% reduction in patient volume equates to a 27% reduction in physician compensation and benefits, and a 30% reduction in patient volume equates to a 80% reduction in physician compensation and benefits!

The good news is that the opposite is true as well:

- a 5% increase in patient volume results in 13% more profit
– a 10% increase in volume = 27% growth in profit
– a 30% increase = 80% growth in profit

There is no way to “cost cut” yourself out of financial challenges on the horizon. Medical practices aren’t recession-proof, and the rules that apply to other businesses apply to them: cutting marketing during a recession is a mistake.  If you’re a practice administrator at a specialty practice facing declining patient numbers, you need to market. This doesn’t have to mean expensive billboard or print ads or flashy TV spots. But your efforts do need to result in new patients, i.e. new referrals for your practice. Adding just one patient a day to a doctor’s appointment schedule will have a significant impact on profit!

This entry was posted on Monday, July 13th, 2009 at 1:59 pm and is filed under All Posts, Statistics & Studies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.