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PRACTICE TIPS AND TRICKS It May Be Time to Reduce Capacity in Your Schedule

By: Neil H. Baum, MD | Posted on: 01 Sep 2022

It’s now months after the March 2020 lockdown, our schedules are full, and there are patients waiting 3-4 weeks to obtain an appointment, but our revenues are flat or even decreasing. What are we to do? This is a situation that is all too familiar for many collogues and their practices.

There are two solutions to this dilemma: 1) increase capacity which entails increasing the staff, adding more providers, increasing space, and increasing overhead expenses, or 2) selectively reducing the volume of patients. As volume reaches capacity, doctors must be prepared to give up the bottom 15% of patients to increase revenue. By eliminating this bottom 15%, there will be an increased capacity for patients that can now be focused on areas where the doctor is especially skilled and/or has the greatest interest or expertise. The bottom 15% of revenue is frequently generated by a disproportionally high number of patients for whom reimbursements are not adequate for the care provided. Now a greater capacity will be freed up for ­revenue growth when this bottom 15% of patients are eliminated. Opportunities for reducing the costs associated with this excess capacity can also be achieved.

There are two situations in which reducing the bottom 15% should be considered: 1) the bottom 15% of a practice’s revenue is likely to be generated by the lowest paying payer, and 2) the bottom 15% of revenue may be generated by specific diagnoses or services that are not rewarding or productive.

Usually, the bottom 15% of revenue is often generated by a disproportionally high number of patients. As a result, a greater capacity will be freed up for treating cases for which the urologist has the greatest interest, the greatest skill and enjoyment, and the most favorable reimbursements. When there is excess capacity created by removing the bottom 15% there is usually an associated reduction in overhead costs.

The four situations where elimination of the bottom 15% is appropriate occur: 1) when the schedule has reached full capacity, 2) when patients must wait 3-4 weeks to access the practice, 3) when you have identified the lowest payers or those payers who take weeks or months to pay for your services, and 4) when your revenue is flat or declining.

Before reducing the bottom 15% of patients, it is important to consider the impact of removing the bottom 15%. You will have to consider the impact on your referral sources. One of the options is to refer those patients to another doctor in the practice who does not have a full schedule.

The benefit of reducing the bottom 15% is greater satisfaction by the urologists for treating those conditions which allow him/her to focus on conditions and procedures he/she prefers. Now the urologist has more time to not only solve the chief complaint but also discuss secondary issues that have been “put off to later” when the doctor is rushed to see all the patients on the schedule. The result is increased revenue from additional procedures and tests, increased patient satisfaction, improved online reputation, and an improvement in outcomes.

The bottom line: with eliminating the bottom 15% of work, the urologist has more time to focus on the things that he/she prefers treating. The bottom line is a win-win for the urologists and the patients with an increase in patient satisfaction and revenues.