Four Ways to Increase Private Practice Profitability

To be perfectly honest, Pediatric Private Practice Owners are possibly the most purpose-driven individuals I’ve ever met. They’re in this industry to help kiddos. And so many of those kiddos are truly and urgently in need. 

It’s not easy for most of these earnest and purpose-driven folks to focus on profitability. After all, this business isn’t about getting rich! (I’m sure you know exactly what I’m talking about.) 

However . . . your practice has got to be profitable so you can keep the doors open, properly maintain your premises, retain great staff, keep the lights on and more. And, to stay true to your purpose of helping kiddos and serving the community, it’s really your duty to be successful—the more successful you are, the more you’re living out your life’s purpose.

There’s just no way around it. Profitability is essential. For most people, improving or maximizing our profitability isn’t second nature. It kind of has to be taught. So that’s what we’re going to look at today: How to increase the profitability of your private practice. 

Here’s a hint: It’s so much easier than you think! It comes down to simple basics you could just about turn into a checklist and monitor every week. Let’s get started. 

First Way: Increase Patient Visits

  • Increase your referrals with increasing, steady outreach. Even if it’s just handing out more referral cards, get those numbers up.
  • Boost word of mouth about your successes. Do you have glowing reviews or success stories from your families or caregivers? With their permission, get these posted on your website and every social media outlet available and get some buzz started. 
  • Get families or caregivers to commit to full corrective care. This doesn’t mean using harsh insistence or scare tactics. It means using good communication skills and that includes listening to their concerns and their goals for the kiddo’s care. It means letting your caring heart shine through in everything you say. 
  • Increase your focus on marketing and PR. Even if it’s just small steps like posting photos of your practice, news updates and information about events and cheery messages in your social media or any newsletters you might publish. Don’t forget to add articles to your blog regularly. They don’t have to be long and fancy, just share some helpful tips and hit publish! 

Second Way: Increase the Average Billed

  • Collect copays and deductibles on the spot. Never let them build up, never!
  • Implement cash-pay programs. By which I mean offering special services (with cash payment, not insurance) that appeal to niche markets within your clientele. This could include sports performance; wellness; fitness; weight loss (nearly 20% of American kiddos are obese!). It could also include sales of PT/OT/SLP equipment so families can make faster progress at home. 
  • Ensure every coding is correct. Update training for your staff if mistakes are being made. 
  • Raise your rates. Is it time? Has it been a considerable time since you raised them? Analyze how your costs may have increased. See if you can find out what your competitors are charging. Then decide if the time is right. 

Third Way: Decrease Write-Offs

  • Bill immediately and accurately. No matter what, no matter who’s out sick, don’t let this area backlog. 
  • Police your collections. Probably not your favorite activity, but this is the only way to decrease write-offs due to unpaid bills. Keep on those people who owe you money.
  • Negotiate insurance. However, you don’t want to form a group with other practices to attack insurance companies. I know from experience that it’s not the way to go. This is where you have to worry about yourself.  

Fourth Way: Decrease Overhead

  • Do precise financial planning and expense control. If you know how, do them consistently. If you don’t know how, learn how. (You’ll be so glad you did. Call me if you need help.)
  • Establish performance-based pay plans. That way, you motivate your staff to be optimally productive. Also, with this type of pay plan, there’s an incentive for them to fill their schedules and treat the highest number of patients. 
  • Hire people who really want to produce. Then retain them. (I can help you learn these skills, too.)
  • Ensure you’re not paying too much for payroll. If you know how, determine what percentage of your expenses should consist of payroll. Then adjust if it’s too high.

I’m not going to kid around with you. Most of these steps require some training and skills! There’s a very simple way for you to get started gaining these skills. Start studying Keys to Private Practice Success, a simple way to fill in all these skills you need to improve your profitability. All these points mentioned here are discussed in this book. 

With greater profitability comes lower stress, better working conditions, well-compensated staff and a healthier financial situation for you personally. It’s worth it.