Running a successful oncology practice requires you to be one part doctor, one part CEO. After all, your practice demands a skilled combination of high-quality patient care and business acumen. And with countless office procedures and mountains of paperwork involved, your practice also requires that you pay close attention to even the smallest details, which means that you must also serve as an auditor and a chief financial officer. The survival of the practice, like the quality of the care you deliver, rests in the details.
These details include the specific set of billing codes that oncology practices are required to use. When compared with other specialties, any errors and inefficiencies in oncology billing are greatly magnified, making it imperative to have a nearly flawless billing and management process. And since oncology practices must purchase millions of dollars of chemotherapeutic agents, small price differences can add up.
Having the proper technology tools and expertise can streamline office processes, enabling oncologists to focus on providing optimal care. By taking a few simple steps, oncology practices can significantly boost profits and increase office efficiencies, while keeping patient care at the forefront.
Practice effective drug management
Administering chemotherapy is the foundation of an oncology practice’s income. This dependence increases pressure on the practice, while the nature of the treatment presents a unique insurance reimbursement problem. Maintaining an accurate drug inventory and precisely recording the administration of all chemotherapy drugs are critical factors in maximizing profit and avoiding losses.
In fact, just one inaccurate billing can equal one day’s income. Would your practice purposely not collect payment on a patient visit? In essence, that is what you are doing if your inventory and administrative details are not in order.
Two of the best ways for oncology practices to stay solvent are to pay less for chemotherapy drugs and to record drug inventory accurately. Since the majority of oncology practices’ expenses stem from chemotherapy drugs, establishing relationships with drug manufacturers and wholesalers is an important factor in a practice’s financial success. Practices should find wholesalers offering reasonable drug prices and negotiate to obtain the best prices.
Evaluating manufacturer buy-ins and contracts with drug companies is also necessary to maximize profit margins. In addition, having a cash reserve fund is highly recommended to allow practices to buy large quantities of drugs at low prices.
Improve office efficiency
As with high drug costs, fixed overhead—salaries, benefits, utilities, supplies, and more—can burden any oncology practice, particularly smaller ones. For many, it is not uncommon to have an overstaffed practice and higher fixed overhead than necessary. Part of the problem is that many practices are still operating at the employee- and fixed-overhead levels required prior to the Medicare Modernization Act. With oncologists focused on patient care, they often fail to realize how funds could potentially be redirected to other areas.
Practices can actively reduce overhead and streamline productivity by reallocating office tasks. For example, it may not be necessary to have three employees assigned to billing. Perhaps these workers can concentrate on other tasks that require more attention, or existing positions can be combined with others. Streamlining intra-office communications helps identify these potential areas where both efficiencies and results can be improved.