The pachyderm in the antechamber is without a doubt the rebuilding of consumer confidence in the wake of the COVID-19 pandemic that began in China a little over 4 years ago.
Has it really been that long?
I can still remember the July 15th, 2020, extended tax deadline with fear, loathing, and much wailing and gnashing of teeth.
And at least I’m a virtual accountant. When I think about my healthcare professionals out there, actually having to deal directly with people in masks, I realize I need to shut the heck up about my own self-inflicted exhaustion.
At least I was indoors, in my own space, no commute, and no general face-to-face public.
The Nurses of 2020 were the heroes of a generation. Make no mistake.
But I digress. Where were we?
In 2023 the cost of EVERYTHING went up. Not only at the consumer level, but most certainly in the specialized equipment and consumables of a medical practice.
Did the industry keep pace? A lot of you physicians would say no, and I have a strong idea of at least one of the most glaring reasons.
The “Not-So-Baby-ish” Boom
Alright, young people, pull up a chair. If you’re unfamiliar with the concept of the baby boom, it’s really quite simple.
These days you’re called all kinds of cool punk-rock-sounding things like Millennial and Gen Z based on the range of years you emerged naked and screaming into this amazing world from the womb.
Ah, labels. Ageism really is just another -ism at the end of the day, but bear with me a second here until I make my point.
The point is this: lots of babies occurred after G.I. Joe came home from your Big War, WW2.
This started quite naturally around 1945 (the last year of both the European and Asian conflicts), and continued with help from the Korean Conflict into what most would say is about 1964.
Lots and lots of babies. I’m one of them myself, born in the late 50’s.
Now, fast forward to the 3rd decade of the magical 21st century, and what do you see?
More people turning 65 in the United States than 25 every year in recent times.
Doctors, that means more people on Medicare by pro rata logic. This trend is predicted to continue for at least the next four years, and most likely longer.
Medicare translates to governmental UCR (usual, customary, and reasonable) rate adjustments.
You do of course have the option to refuse to accept Medicare patients, but then you cut your potential client base in at least half, most likely even more.
As an accounting firm specializing in the streamlined financial performance of medical practices, we highly advise against it.
The first phase of net income is gross income – you have to feed the machine at the top, and reducing your potential patient load is not going to help.
Technological Advancements
One of the key drivers for medical practices in 2024 will be the adoption of new technologies. This includes telehealth services, which saw a significant rise during the pandemic and are expected to continue growing.
Small to mid-sized practices need to invest in telehealth capabilities to stay competitive and meet patient demands for remote consultations.
Patient Experience and Engagement
Patient expectations are higher than ever. Practices need to focus on enhancing the patient experience through improved communication, shorter wait times, and personalized care.
This could also involve adopting patient engagement tools like online appointment scheduling, patient portals for accessing medical records, and automated reminders.
Diversification of Services
To increase revenue streams, practices might consider offering a broader range of services or specializing in niche areas. This could include expanding into wellness programs, preventive care services, or specialized treatments that are not widely available.
Collaboration and Partnerships
Forming strategic partnerships with other healthcare providers, hospitals, or technology companies can provide benefits such as shared resources, referral networks, and access to specialized knowledge and equipment.
Marketing and Branding
Developing a strong brand and effective marketing strategies can help attract new patients and retain existing ones. This includes having an online presence, utilizing social media, and engaging in community outreach programs.
Cost Management and Operational Efficiency
Rising operational costs are a significant challenge. Practices will need to find ways to optimize their operations to control expenses.
This might involve automating administrative tasks, improving supply chain management for medical supplies, and adopting energy-efficient practices to reduce overhead costs.
Data Analysis and Decision Making
Finally, leveraging data for better decision-making will be crucial. By analyzing patient data, financial records, and market trends, practices can make informed decisions about their services, marketing strategies, and business growth.
In the Year Ahead…
In conclusion, while challenges like rising costs and regulatory changes persist, opportunities in technology adoption, service diversification, and strategic partnerships will play a significant role in the continued growth and success of small to mid-sized medical practices in 2024.
As an accounting firm specializing in these areas, emphasizing the importance of these factors to your clients can provide valuable guidance in navigating the evolving healthcare landscape.
Physician practices owners: if you would like to discuss how having a non-equity financial partner guiding your practice’s business future can increase your wealth, reduce your taxes, and provide the peace of mind that will allow you to put 110% of yourself into your patient care goals, we would like to talk to you as well.
We are open to take two new clients at the business advisory level of service to kick off the New Year in the month of January.
Imagine all of the financial puzzle pieces being snapped into place for you, on your terms, so that you can focus your professional clinical time where it belongs: on patient care.
Does that look and sound good?
Then reach out to me, and let’s talk: Free Profit & Cash Flow Analysis
And matter what, may you all have a most abundantly prosperous and successful 2024!