Over 60 Flavors…What’s Your Favorite?
Ben and Jerry sell over $400 million in ice cream each year. In 2000, they sold their company to Unilever for about $326 million dollars. You would think ice cream was their original strategy, right? Not even close! Read on….
In business, we sometimes have to change direction in order to optimize our success. We often struggle (sometimes without even knowing that we are struggling) trying to perform tasks that we were never really trained in and that are outside of our “core competency” of patient care.
While the whole concept of outsourcing makes perfect sense to us for some of our business processes (IT, HIPAA, accounting, etc), I often find physicians reluctant to outsource their billing despite the many advantages that “specialization of labor” creates. They fear loss of control, not enough attention paid to smaller claims, etc. In today’s world of highly specialized medical billing skill sets, nothing can be further from the truth.
Besides the advantage of having a team of skilled and industry-specific billers behind you, the economics behind outsourcing certainly makes sense. Almost all of the costs that you have allocated towards billing (staff, benefits, technology, education, absenteeism, etc) disappear when you outsource. During my many years of performing Cost/Benefit Analyses for practices, I have found that the average cost of performing billing in-house (when all direct and indirect costs are truly allocated) averages somewhere around 10% of collections. The benefit of outsourcing not only then results in paying a much lower percent, but also allows the focus to return to the practice’s core business of patient care and higher production. That “swing” could be as much as another 2-5%!
So while outsourcing billing may seem like a radical change in direction, just ask Ben Cohen and Jerry Greenfield (who needed to find something else to do after not getting into medical school) how their change in direction worked out…
Ben and Jerry’s was originally going to be a bagel company. Their plan was to deliver bagels, lox, cream cheese, and a copy of the New York Times to people on Sunday mornings. But when Ben and Jerry found bagel-making equipment to be too pricey, they changed their strategy in a big way.
Is it time for you to try a different flavor?
If you would like a FREE Cost/ Benefit Analysis performed on your billing process, please email me at John@nemohealth.com.