Overhead Reduction in Geriatric Medicine

Overhead reduction is one of the most powerful skills available to boost profit. It is similar to weight loss. It is easier not to take in the calorie than to burn it off. Likewise in business it is easier not to incur the unnecessary expense in the first place, than to work to pay for it.

Easier said than done. This is true in business as it is in life. Look at any practice that isn't closely managed and supervised. There are usually a multitude of expenses that are either hidden or are considered too small to matter. It's this slow leakage of capital that eventually leads to an anemic practice with weak profits.

Long-Term Care has the enviable quality of being a cheap practice type to run, if properly set-up and managed. Oh and don’t think “managed” means reviewing complex ledger sheets and profit reports. Managing is as simple as reviewing the checkbook at the end of the month. Pay attention to exactly where your money is going. Many physicians are very surprised by what they learn from this very simple exercise.

Geriatric Medicine can be very simple to set-up and practice if you don’t fall into the many “doctor” traps around. What I mean by traps is, spending extra money on things and services because you are a physician. You know, fancy stationary for billing statements, “Because you’re a doctor, it wouldn’t look right to send a bill on plain paper”. Or how about the expensive office with fancy furniture, and high end decor, as opposed to a simple, very clean and pleasant reasonably priced office. Let’s take it one step further...

For those of you interested, a profitable Long-Term Care practice doesn’t need an office at all. Due to its many practice models (most of which occur in a facility) Geriatric Medicine practiced in Long-Term Care functions very well with bare-bones overhead, and no office. This alone will cut your overhead in half. Yes, this may seem radical to you, but rest assured it is not new. I’ve been doing it successfully for years.

Having an office is one of those things you’ve been brain-washed into thinking you must have to be a “real” doctor. I know because I believed that for years. As my Long-term Care practice grew I initially maintained my office, but soon realized I was seeing most of my patients outside the office. It took me several years to finally overcome inertia and drop the unnecessary expense. Remember, if it doesn’t directly improve patient care or income, get rid of it, now.

There are many other examples of unnecessary expenses lurking in your practices right now. I challenge you to spend one hour with your practice checkbook, and I bet you can find ways to reduce your overhead by 5 or even 10 % just by looking and crunching the numbers. Learn from my mistakes and review your own expenses today.

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