Outsourcing can create savings

Key Points

When S. Barry Eiden, OD, FAAO, began practicing optometry 20 years ago, he processed the payroll for his then-small staff. "What an inconvenience," he recalled, explaining that it consumed a lot of his time. Dr. Eiden had two choices: Either assign the task internally to an employee who would need to be trained in payroll, or outsource the activity.

He chose the latter and has no regrets. By outsourcing, Dr. Eiden found that he doesn't have to worry about changing government laws, employment taxes, or human resource regulations. His 15 employees now have perks they didn't have before, such as direct deposit. Best of all, they're free to focus on what counts most: delivering quality patient service.

Reasons for outsourcing

"That's the last thing I want for our practice,"he said. "Everything has to be at the highest level of professionalism."

So, 10 years ago, Dr. Eiden, who practices at North Suburban Vision Consultants in Deerfield, IL, hired a firm to develop and manage his Web site. As his business needs changed and became more sophisticated, so did his Web site vendors.

Dr. Eiden's practice Web site has been redesigned three times. Now he uses a firm with expertise in search engine optimization and social networking-but more enhancements were to come. Roughly 5 years ago, he outsourced medical coding and billing and then, 2 years later, he added public relations.

Outsourcing benefits

The benefits of outsourcing each of these areas continuously pay for themselves, Dr. Eiden said. For example, if payroll is processed in-house, he would have to hire an additional, full-time staff member dedicated to this function.

The employee would also have to file quarterly payroll and tax reports as required by state and federal government, and periodically process reports for the practice that contain information involving workers' compensation or its profit sharing plan.

Dr. Eiden said for the cost of less than one tenth of 1% of his practice's monthly revenues, all of these reporting functions and headaches disappear.

Likewise, consider the advantages of outsourcing medical coding and billing. He remembered the old days when medical services were accidentally miscoded and submitted to insurance c3.ompanies for reimbursement. The insurers routinely kicked back these claims, which then required more staff time to resubmit these claims with the correct codes, which delayed the cash flow.

That scenario hasn't occurred in years, he said, because his billing service "scrubs" each claim, reviewing the codes for accuracy before submitting to insurers. The service isn't exactly cheap. His practice is charged a percentage of all money collected. (Dr. Eiden declined to reveal the amount.)

Pay to profit

Dr. Eiden weighs the cost of oursourcing against the salaries and benefits of the additional two to three full-time employees needed to perform this task. After adding everything up, he believes he's still coming out far ahead.

"Using an outside service for billing and coding is one of the most important things we do," he said. "Keep in mind that most medical practices today are highly dependent upon insurance for payment. Outsourcing firms have certified coders and billers and their computer systems are linked into virtually every single payor in the U.S. The faster and more accurately your claims are submitted, the faster you'll be paid."

Outsourcing technology demands is often a no-brainer. Many optometry practices don't possess the in-house technical skills needed to install computer networks or systems or develop and manage a Web site.

Dr. Eiden has worked with several technology firms over the past decade to help his practice reach specific goals, including building a Web site ( http://www.nsvc.com/) and blog ( http://www.nsvc.com/blog/) known for its educational content regarding eye care, health, and treatment.

The same holds true with Dr. Eiden's public relations firm. Whether his practice receives exposure in print or on TV, radio, or the Internet, he said many new patients point to his Web site or public relations efforts as the reason they come to his practice.

While Dr. Eiden can't supply concrete numbers, he said new patient revenues have exceeded the amount he pays for outsourcing technology, public relations, and marketing, which costs less than 2% of his practice's monthly revenues.

What he outsources next is anybody's guess. But one thing is certain. Dr. Eiden sleeps well at night, knowing key aspects of his business are in the hands of professionals.

"I want to make sure these things are done properly," he said. "Everything goes back to professionalism. I work only with organizations that are highly professional, which is an accumulative effort."

FYI

Dr. S. Barry Eiden
Phone: 847/412-0311
E-mail: sbeiden@nsvc.com

Dr. Eiden did not indicate a financial interest in the subject.