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9 ways to trim your supply costs

Stress the importance of saving money wherever possible and your staff will be part of the solution

Pinched by declining reimbursements and the high cost of doing business, you may be looking for ways to economize in your practice. Although medical and office supplies are only a modest portion of a practice's expenses, they nonetheless represent an opportunity to trim spending.

Kenneth T. Hertz, FACMPE
But there's more involved in saving money on supplies than ordering gloves in bulk from an online retailer or stocking up on budget-priced paper from the warehouse store. You may have to sever relationships with long-time suppliers, switch from your preferred brands, shuffle staff responsibilities, and learn when a "good deal" will cost you more in the long run.

Medical and surgical supply costs for a practice represent less than 1% of their medical revenue, based on Medical Group Management Association (MGMA) data for single specialties; compared with that figure, support staff is 25%, according to Kenneth T. Hertz, FACMPE, principal, MGMA Health Care Consulting Group.

Karen Zupko
"It's not a huge amount of your cost, but having said that, there are clearly ways that you can save on those costs, and the reality is that it's incumbent on a practice to look at every single, solitary cost in the practice to save money today," Hertz says. "The margins are smaller, the pressure is greater, the costs are going up all over, and revenue is going down, so every cost has to be looked at and evaluated."

To get an idea of the value of reductions in supply costs based on financial realties, not habits, consider the situation in the framework of the Medicare reimbursement for a level 3 (99213) office visit. A savings of $1,000 could be the equivalent of 40 patients, without the collection risk and overhead, suggests Karen Zupko, president of KarenZupko & Associates, Chicago, Illinois. "The money flows directly to the bottom line," she adds.

Some tips to help you trim your supply costs:

■ Take leadership.

Practice finances are not going to take care of themselves, and you will need to take leadership in overseeing the purchase of office supplies, medical supplies, pharmaceuticals, and injectables. Leadership in this situation mandates that you communicate with your staff members.

"It starts at the top," Hertz says. "You have to have physician buy-in, and you have to get staff buy-in. The staff has to understand that this is an important issue and that they make a difference."

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