Although death and taxes seem certain in life, another certainty is that prices always go up. Managing this increase in cost can be difficult for some rheumatology practices. But Chris Morris, MD, rheumatologist, Arthritis Associates, Kingsport, Tenn., and Herbert S.B. Baraf, MD, FACP, MACR, managing partner, Arthritis & Rheumatism Associates, and clinical professor of medicine, George Washington University, Washington, D.C., have actually found some ways to lower expenses at their practices. Here’s a look at some specific areas and strategies.
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The time and money devoted to hiring and training are among the most expensive aspects related to employees. To save money on this expense, Dr. Baraf recommends hiring slow and firing fast. “In other words, take your time to find good people,” he says. “Each time you have to rehire a position, it involves training, fees, time and resources. On the other hand, a bad hire should be recognized as quickly as possible and terminated.”
“Retaining staff will save you a lot money,” Dr. Morris adds. He’s also a proponent of cross-training. “No one should be so specialized that they cannot do other tasks. Think twice before outsourcing a position—which can end up being more expensive.”
Regarding health insurance, when purchasing or renewing policies a practice can lower its premium costs by increasing deductibles and coinsurance amounts, maximum out-of-pocket limits and copays for services for prescription drugs. “Although this lowers the cost of the policy to the practice, such adjustments will increase out-of-pocket costs to the policy holders, i.e., physicians and staff members. Keep in mind there is a trade-off to doing this—by reducing benefits staff is disadvantaged and loyalty suffers,” Dr. Baraf cautions.
Owners of independent private rheumatology practices should strive to own their office space rather than rent it. “Your monthly payments will go toward building equity, rather than paying rent [that goes to] someone else,” Dr. Morris says. “Rheumatologists’ offices do not need to be located next to a hospital. Look for a location that is convenient in terms of accessibility, parking for patients and staff, and other amenities.”
Dr. Baraf adds, “Purchasing your own office and paying rent to yourself can provide a great benefit if you’re a solo practitioner.”
However, if you add partners, owning your office space may not work as well.
For growing practices that decide to rent, Dr. Baraf recommends getting a space that allows room for expansion, because moving and renovating are expensive.