5 Ways Medical Practices Can Cut Costs and Deliver Better Care

By Tobi Elkin

Running a medical practice is a business. In order to grow profitably and responsibly, trimming costs is necessary. There are several areas where this can be done — overhead, personnel, technology, billing, bill processing, and insurance, to name a few. Within these categories, there are areas that lend themselves well to process improvements, helping physicians find more time for appointments and other revenue-generating activities. The end result is cost-savings, something all medical practices can benefit from. Below, learn five tips for effective cost-cutting from some of the top medical professionals.

For Dina Strachan, M.D., a board-certified dermatologist who has 10 employees at her New York-based practice, Aglow Dermatology, every step involved in collecting money from patients and insurance is a cost. With so many high-deductible plans, it takes a lot of time and effort to collect money and process bills. To solve for that, Dr. Strachan placed a link on her website for payments so that patients can pay via the link, instead of sending in slips for credit card payments or checks: “We don’t have to spend time opening and sorting mail, punching in, and processing credit card payments — it’s a time-savings,” she says.


“We don’t have to spend time opening and sorting mail, punching in, and processing credit card payments — it’s a time-savings.”

Dr. Strachan also began using text messaging for appointment reminders a decade ago. “A staffer used to spend half the day calling patients.” She also brought billing in-house. Her practice management software enables her to bill patients seamlessly and directly within the EMR. “Billers are often as much as six percent of what you’re bringing in,” she notes. Plus, she’s saving time on the task of preparing to send paperwork to outside billers.

Continuum Five Ways Medical Practices Can Cut Cost And Deliver Better Care Article Image

Cost Saving Tip #1: Dr. Strachan’s advice is to eliminate waste wherever possible, keep credit card processing costs down by using money transfers so that funds are deposited directly into your account and maximize your team’s skills. For example, some staffers may know how to do billing — earmark a percentage of their time to it, even if it’s not their primary role.

Thomas Ciulla, M.D., MBA, is a clinical professor of ophthalmology and a board-certified ophthalmologist and retina specialist, who serves on the board of directors of Indianapolis-based Midwest Eye Institute, a multi-subspecialty ophthalmology practice. Dr. Ciulla published research in the peer-review journal Retina on improving clinic wait times to identify areas of waste. He and his team found that by using Six Sigma process-improvement techniques frequently deployed in manufacturing in a clinical setting, the team cut patient visit times by 18 percent and improved both patient and employee satisfaction without reducing valuable face-to-face patient-provider time.

His clinic schedule of seeing about 40 patients per day translates to about 10,000 patient visits a year. Patients will save more than 3,000 hours a year from the improvements. With two locations, Midwest Eye Institute has 20 physicians and a staff of more than 100 who handle about 75,000 visits a year, according to Dr. Ciulla.

“Ophthalmology is interesting. We tend to see more patients than a primary care doctor. Our resources are being stretched because there are so many seniors, and this creates bottlenecks — but adopting Six Sigma practices allows us to address some of these bottlenecks,” Dr. Ciulla says. He notes that ophthalmologists might see 40 to 50 patients a day — 18 percent more time was created after Six Sigma, which amounts to thousands of minutes. “This could have immense benefit if it’s adopted system-wide. You can use that time to see more patients, so you can generate more revenue and profit.”

“The beauty of Six Sigma is it can be applied to anything from streamlining a surgical procedure and inventory management to reducing errors in billing and wait times — it’s a method of increasing efficiency and decreasing waste,” he says.

Cost Saving Tip #2: Dr. Ciulla says it’s all about managing demand to resource supply: “You can improve quality with very little cost. That’s one of the main goals of healthcare process improvement — delivering quality healthcare while controlling cost.” In addition, he says with the time saved, practices can add more services, elective services, and clinical trials.

Continuum Five Ways Medical Practices Can Cut Cost And Deliver Better Care Article Image 2


“That’s one of the main goals of healthcare process improvement — delivering quality healthcare while controlling cost.”

For Dr. M. Samm Pryce, who runs a concierge practice, keeping an eye on costs is critical — she has two office locations and one virtual assistant. She rents office space for a couple of days a week and rents the space to another clinician the rest of the time. Dr. Pryce communicates with her assistant by phone, email, and sometimes in-person.

Cost Saving Tip #3: Dr. Pryce advises smaller practices to use Upwork, a freelancing platform from which physicians find employees who work hourly and on-demand. Her assistant started as an intern and gradually added more duties; she’s in her third year with the doctor.

Cost Saving Tip #4: To reduce inventory and the space needed for it, Dr. Pryce offers a virtual dispensary. “You don’t have to have money upfront. When you’re stocking a dispensary in an office, you have to pay for those to go on the shelves upfront. A lot of times, if you don’t pay attention to your inventory, products expire.”

Most practice administrators automatically associate cost-savings with reducing headcount. But it’s not always necessary, according to Camille Williams, a self-employed consultant in business strategy and implementation who advises medical practices and organizations on efficiency and process. “Generally speaking, medical practice employees are undertrained and overstaffed. Providing regular training on technology, scheduling, and conflict resolution, and giving key employees more autonomy, allows for a staff reduction or reorganization of anywhere from 20 to 40 percent,” Williams says.

“If you pay three people as if they are four and they work like six, you’re getting a great deal. Employees are usually more than 60 percent of overhead, so this can result in significant cost savings very quickly,” she adds.


“If you pay three people as if they are four and they work like six, you’re getting a great deal.”

Technology is another area where practices need to look. For example, many medical practices still use legacy phone systems instead of VoIP systems, which Williams says can offer up to an 80 percent decrease in telecom expenses. In addition, she finds billing practices remain a problematic area for practices. “Ensuring billers and coders receive at least annual in-person training specific to new Medicare rules and documentation can shave months off of denials and resubmissions.” Billers, she says, must be diligent in documenting, submitting, and resubmitting claims. Managing and optimizing the billing function can “add hundreds of thousands of dollars to a practice’s bottom line,” Williams notes.

Cost Saving Tip #5: Training managers and employees to identify areas for cost-containment, reduction, process improvements, and efficiencies is important to your business. In fact, Williams sees a benefit in being very specific about employee functions — even when the entire staff is cross-trained, someone has subject-matter expertise. You wouldn’t ask a dentist to perform a knee surgery; why would you ask your front-desk receptionist to file claims?” She cites billing as a key area that may require expert guidance.


“Ensuring billers and coders receive at least annual in-person training specific to new Medicare rules and documentation can shave months off of denials and resubmissions.”

Resource redeployment is another tactic that practices can use to work more efficiently without cutting headcount. Williams notes that an independent analysis can be helpful in cases where practices are weighing whether to reduce staff. For example, “once, in a gynecology practice, we found that a front-desk employee had a real passion for aesthetics.” While the staffer wasn’t a good fit as a front-desk receptionist, when she was released from that role, she built a spa service within the practice for postpartum women. “She really found her calling, and the practice added a cash-based income stream — and a lot of friction dissipated,” Williams says.


Managing and optimizing the billing function can “add hundreds of thousands of dollars to a practice’s bottom line.”

Similarly, Williams has seen employees of gastroenterology practices launch weight-loss programs that were overseen by physicians. These programs added to overall patient satisfaction and created new treatment options for consumers, as well as new revenue streams for the practice.

Cost-cutting in a practice doesn’t have to — and shouldn’t — mean a decrease in value. Instead, by thinking strategically about where processes can be done more efficiently, how employee skills can be put to better use, and where it makes sense to eliminate excess resources, practices can save money and deliver a higher-quality experience. When this happens, both patients and practice staff are happier, leading to more loyalty and less attrition, respectively.


Tobi Elkin is a veteran content creator and consultant who enjoys crafting compelling narratives for diverse audiences. Based in New York City, her writing has appeared in newspapers, magazines, and on websites including Advertising Age, AOL, the Associated Press, CMO.com, Narratively, Robb Report, The Huffington Post, and many others. She has consulted on thought leadership, marketing, and content strategy for technology firms, consumer brands, and non-profit organizations.