There are several ways that physicians can increase profitability for their practice.
Some are obvious, others not so much. For physicians to increase profitability does not just mean taking on more patients, more cases and more procedures. Doing this may help with increasing your overall profit and would increase your revenue. But it wouldn’t necessarily increase your profitability for physicians.
Increasing profitability is the “work smarter not harder” motto. Finding ways to net more money without increasing your output.
How to Increase Your Compensation Both Clinically and Non-Clinically
The easiest way to increase profitability in your practice is by reducing costs
I am not suggesting you reduce your staff or reduce working hours. This would indeed increase your profitability. But it would increase someone’s workload, create burnout, and hurt employee morale. This goes against “work smarter not harder”.
Payroll is typically the largest line item expense.
So, let’s focus on the second, your materials and supply
Reducing your overall cost on the products you use is the simplest, quickest and least disruptive way for you to increase profitability.
“Okay, all that sounds great. But can you back it with some numbers?”
Monitoring supply costs can help you save anywhere from 10% to 40% with minimal work and no major changes in products.
“Okay great. I need to reduce costs. Where do I start?”
I learned the most critical aspect for cost savings on your supplies is finding the right distributor and Group Purchasing Organization (GPO). Additionally, the correct supplier will save you time on ordering, administration time, and back office operations.
However, finding the right distributor can be like dating
There are many options, but not many will have a mix of all the attributes you need.
I’ve spent considerable time sorting through various distributors and have identified one in particular that I became a huge personal fan of, so you don’t have to. They then actually became a key resource and sponsor for this blog.
This distributor is Pipeline Medical. They were formed by 2 physicians instilling a philosophy of increase leverage, decreasing costs, and making doctors lives easier! They serve a ton of plastic surgeons, dermatologists, and medusas but offer a full range of medical products for any practice type of any size, from huge corporations to solo practitioners.
Here are some of the things about Pipeline Medical that I like
They were originally founded by plastic surgeons, so they get it, they get us. The original structure was developed by doctors for doctors, with price and time savings in mind.
The company is very stable and strong at its foundations, being around since 2007 and private equity backed.
Like an Amazon for physician offices.
Pipeline accesses multiple distributor and manufacturer product portfolios and lists them on their easy to use website. This provides multiple options in one location, alleviating you from searching around. Their buying power of thousands allows for lower prices than you likely can get on your own.
The marketplace has over 700,000 products, everything you need to stock a physician office to a hospital.
Best of all product supply is consistent and ships typically within two days.
Dedicated Account Manager
Account managers at Pipeline Medical are responsive, helpful, and knowledgeable. They can source backordered products and provide alternatives when not available elsewhere. They’re able to help you around the market place and, unlike other organizations they do not control your pricing.
This permits a true white glove service.
Stable pricing is critical to increase and maintain profitability.
Pipeline offers something that most practices never receive, access, or even know about: master service agreements (MSA). MSAs are contracts to lock in prices with suppliers. MSAs are common in hospital systems and some larger ASCs.
Without these contracts, materials won’t have a fixed price, and costs can fluctuate throughout the year. This makes it almost impossible to forecast and maintain profitability.
Prices differ between distributors and between practices of the same distributor.
Unique Product Portfolio
Pipeline’s unique med-tech structure allows them to partner with the brands we love. They carry different medical products, the best sutures, and are always expanding their product portfolio.
Since they are not a single supplier they’re able to pull from multiple suppliers, and also create direct to manufacture relationships.
Pipeline Medical checked all the boxes I had in mind. I learned their website gets constant improvements thanks to the feedback from ordering nurses and doctors, and they have recently invested heavily in their tech.
A case example of a practice’s increase in profitability
When I approached them to learn more, they presented me with a case study regarding a dermatology practice in Georgia that saved over 30% on their medical supplies, without changing product, brands, or manufacturers. They offer great savings on pharmaceuticals and well-known brands.
What physicians can benefit from this and increase profitability
The answer: every one.
Whether you own your practice or work as an employee (in whatever setting), decreasing your bottom line will always benefit your practice and you.
When you own your practice, the impact is certainly more direct.
However, even as an employee, reducing your costs gives you additional leverage and good will with your employer’s for future negotiation. This can only better your negotiating position, increase your value, and better your compensation.
I work in a large hospital corporation and actively look for ways to improve patient care and decrease costs for us.
By signing up for Pipeline Medical, you’ll save anywhere between 20% – 40% on your medical supplies. If interested, you can click here to register free or learn more on their website.
This will fall right down to your bottom line.
What do you think? Have you worked to control supplies cost in your practices? How else can physicians increase profitability? Let me know in the comments below!