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BLOG: Practice efficiency — The adventures of Dr. Lycra, part 2
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In the last blog post, we introduced you to Dr. Lycra, in the year 2066, and the innovations allowing future doctors to see vastly more patients. We continue.
Unfortunately, we don’t have a time machine. We can’t come back here to 2016 after a trip to the distant future and bring back all of Dr. Lycra’s labor-saving and energy-boosting devices. But we had better do something. And fast. Based on current trends in reimbursement and the slowly rising cost of doing business, your personal income as a surgeon is destined to be falling year after year unless you are able to improve productivity.
The math is rather simple, and I’ve covered it in this space before. Let’s say you see an average of 40 patients per day, 3.5 days a week, 48 weeks a year, and have an average ticket of $180 per patient visit and run a practice with a 60% overhead. You’ll make about $484,000 this year.
If there’s a net fee reduction of just 5% and all expenses stay the same, you’ll be taking a 12% pay cut. If expenses also go up at a typical 3%, you’ll take a 17% net pay cut. To make up for these impacts, you would need to see about three extra patients per day.
This productivity gain is a lot more likely to be accomplished than the 11% cost savings it would take to yield the same profit restoration. (Getting rid of 11% of your costs in a single year would be equivalent to lopping off about 1.5 staff members in a solo practice or all of the marketing and facility costs.) The best, most practical, reasonably sustainable way to slay the fee reduction dragon is with increased personal productivity. And you don’t need Dr. Lycra’s slick suit or tool belt to get there.
To be continued ...