|
The
numbers
A. Lets just do the math in a theoretical model.
We'll base our numbers on a practice whose total
gross receivables are $100,000 per month. Obviously,
this is an overly simplistic model designed
to quantify the aggregate cost and or opportunity
cost of the medical billing component only.
|
Current
Aggregate Billing Expenses
|
| In-house
expense |
|
|
| Total gross revenue |
$100,000
|
|
| Current billing expense |
$4,500
|
|
| (4.5%) |
---------------
|
|
| Net Revenue |
$95,500
|
|
| Outsourced
Billing Expense |
|
|
| Total gross revenue |
$100.000
|
|
| Current billing service exp. |
$7,000
|
|
| (7.0% net collections) |
---------------
|
|
| Net Revenue |
$93,000
|
|
Net
cost increase with outsourcing = $2,500.00
As you can see in this," all things being
equal" theoretical model your practice
would incur a $2,500 decrease in net revenue
with the implementation of a billing outsource
strategy. Keep in mind that this model does
not address other less tangible issues such
as your reduced payroll, computer expenses,
ect. In reality the net cost could be substantially
less than $2,500. Many physicians will perceive
this as a small price to pay while others will
consider it to be cost prohibitive.
|
5%
theoretical increase in gross revenue
with outsourced billing
|
| Total gross revenue |
$105,000
|
(5% increase) |
| Billing service expense |
$7,350
|
|
| (7% net collections) |
----------------
|
|
| Net revenue |
$97,650
|
|
$95,500
- $97,650 = $2,150.00 increase in net revenue.
As you can see from this model with a 5% increase
in collections your net revenue will increase
$2,150.00 with the added expense of the billing
service. Keep in mind that a 5% increase in
gross collections is actually quite conservative
and should easily be obtainable by quality billing
service.
|
Outsource
Medical Billing Services