When facing common challenges such as reimbursement issues and increasing competition, medical practices may consider providing in-house services that complement their clinical focus. With proper planning, adding ancillary services can be the perfect formula for boosting patient satisfaction and revenues. However, as with any new line of business, a risk and benefit analysis is necessary to ensure that your practice is taking the right step.
Ancillary services such as physical therapy, imaging, or ambulatory surgery centers can boost income for medical practices. However, this should not be the only reason for taking this step. Physician-owners typically consider ancillary services that will give them more control over every phase of the clinical trajectory, which will result in improved outcomes for patients. In-house services that ensure clinical continuity and convenience will help your practice stand out and will ultimately consolidate your patient base, as well as increase referrals.
Anticipate Potential Problems
While ancillary services can prove to be money-makers in the long run, they typically require a sizable initial investment. Consider whether your practice can support the costs of implementing ancillary services or can find a way to infuse capital in this new line of business.
The addition may also complicate billing procedures. Practices are responsible for the billing and coding components of their ancillary services and may run into reimbursement issues if local coverage determinations and reimbursement agreements are not carefully reviewed beforehand.
One other thing to consider is competition. If the local market is saturated with similar services that are available at competitive prices, it may be hard to generate and maintain demand for your ancillary services, even among established patients.
How to Make It Work
Choose the right service
Start by evaluating the demand for the services your practice is planning to add. Analyze the size and makeup of your patient population to identify needs and referral trends. Is there a particular service that your practice does not currently offer that could benefit a significant portion of your patients – such as preventative screenings or chronic pain management? Can this service be easily incorporated into your current workflow? It is also important to consider the availability of such services in the local market and patients’ access to them.
Consider the additional costs associated with adding ancillary services, such as those involved in acquiring equipment, expanding space, and launching marketing campaigns. Your practice may need to hire qualified staff or provide additional training to current personnel. Healthcare consultants can help you understand how the service can improve your patients’ experience and how it should be organized to maximize benefits for your practice.
Physician involvement in day-to-day operations helps the practice maintain control over the quality of the ancillary services and contain costs. Even when the owners or partners cannot be involved in all aspects of the practice, working closely with staff members who are in charge of planning, billing, human resources, and technology is key to maximizing efficiency and profitability.
Consider an infusion of capital
Because the initial investment in the ancillary services can cause a cash-flow crunch for your practice, you may not be able to go it alone. Financing services that specialize in healthcare funding can temporarily improve your cash flow and support your investments in growth. Look for companies that provide flexible funding options with minimal paperwork.
Know when to move on
If, after a reasonable period of time, the added service does not produce the anticipated benefits or has a negative financial impact, it is time for a change of plans. Hanging on to an unsuccessful service can affect your cash flow and revenue cycles. Assess the situation and discontinue the service before it impairs the financial health of your practice. An ancillary service adds value to your practice only when it enables it to serve more patients with better outcomes.