January 19, 2023
As per Statista, the 12-month percentage change in the consumer price index, or the monthly inflation rate for goods and services in the United States, prices in October 2022 had increased by 7.7 percent compared to October 2021. The statistics are averages for American cities. The inflation rate in economics measures the rate of increase of a price index. It is the rate of change in the price level as a percentage over time. The speed at which the purchasing power of money is eroding is roughly equal.
Numerous industries are being impacted by inflation, but because insurance payers dictate payment structures, medical practices typically bear the brunt of its effects. Even more concerning, businesses have had to raise wages significantly, and today's labor market generally benefits workers. In some cases, employees demand 20–30% higher salaries than previously, which is understandable given the fierce competition for qualified workers. Medical practices can take steps to help ease the tightening margins, even though these problems are affecting many businesses.
If healthcare practitioners want to emerge from this time more substantial, they will need the best practice management system. The necessary improvements can be sparked by well-known tactical actions, just as a set of well-understood organizational measures can support businesses during a time of ambiguity. The healthcare sector's fundamental question is whether existing stakeholders can quickly set high goals in these areas, shape the surrounding organization, and carry them out with the necessary speed. Those who do so will survive the storm and might succeed.
Continue reading this guide to learn more about medical inflation and strategies which can help healthcare practices in times of inflation.
Physicians have fared reasonably well during the past thirty years of low inflation. Due to an aging population, new technological advancements, and the implementation of the Affordable Care Act, healthcare spending has increased by 20% over the past 20 years. This growth has assisted hospitals and doctors in maintaining some control over their income despite cost-cutting measures, especially with a limited supply of doctors. Rising inflation will have disastrous effects on all social programs, particularly healthcare. Although revenue is flat, opting for some strategies may save your healthcare practice.
In addition to lowering labor costs, outsourcing practice management system transfers duties to businesses with specialized expertise. For instance, outsourcing is frequently possible for medical credentialing. A full-time worker is optional, except for large practices. Good relationships between agencies and health plans speed up the procedure, which expedites the onboarding of providers. They can also anticipate credentialing problems and, if necessary, assist in solving them.
Much other healthcare administrative tasks are outsourced, including:
Verifying potential outsourcing partners that are familiar with HIPAA privacy regulations is a good idea when looking for outsourcing options. It's also advantageous to make pointed inquiries about how protocols are updated to reflect changes in the law.
COVID-19 made the benefits of telemedicine abundantly clear. It quickly became a primary method of receiving care starting in March 2020. Fortunately, telehealth services could be paid for thanks to emergency legislation passed at the start of the pandemic.
Medical practices have enthusiastically embraced telemedicine due to the following advantages, in addition to the simplicity of billing and coding:
Telemedicine thus provides many opportunities for effective patient care without compromising quality. According to HRI surveys, 22% of clinicians plan to decrease their physical space as they deliver more virtual care. Therefore, effective telemedicine techniques might enable a reevaluation of real estate requirements.
Several unscrupulous payers reduce rates, frequently without notice. To assess how well payers are covering costs, we advise taking the following actions.
If expenses exceed income, it's time to renegotiate or stop accepting particular payers.
Healthcare-providing organizations can track all patient service revenue with revenue cycle management solutions. When an account is created, tracking starts and ends when the last payment is made. How quickly reimbursement is received depends heavily on specific front-end operations.
The next stage of the procedure is the submission of claims. All claims must include all necessary data to avoid denials, which can end up in the "black box" of uncollected accounts receivables. Data analytics is an essential step. The performance of RCM (Revenue Cycle Management) must be timely assessed to guide decision-making and improvement strategies. Key performance indicators (KPIs) offer insightful financial, clinical, and operational health information.
A quick way to reduce costs when inflation is high is to evaluate different business services:
An excellent way to get a quick overview of how business services affect overall revenue is to look at the monthly financial report.
Running a medical practice is complex and not just when inflation hits; however, you are not alone. Partner with talkEHR, which provides Practice Management Software to monitor, control, and streamline business and financial operations. You can investigate opportunities for medical credentialing, billing, telemedicine, revenue cycle management, practice management, and more with our multipurpose healthcare solutions.
We support healthcare providers in embracing all telemedicine models and offer training as required to ensure success.