Cutting costs: Keep ahead of falling reimbursement with these tips

Key Points

• Hire good people from the start. Mediocre employees cost you more money. Their bad attitude drags down the rest of your staff. Their incompetence creates the need for rework. On the other hand, good employees are worth their weight in gold.

• Review your bills. Even if you got a great deal at the get-go, take the time each year to review every one of your vendor contracts. Most vendors increase the costs of their products over time, more often than not without informing you. If you just hand over these invoices for your manager to cut checks, you may not spot price hikes or supplemental charges that get tacked on.

• Join a purchasing group. Get discounts on equipment and supplies by purchasing through a group. Use the Internet to access one, reap the rewards of a local bulk discount store or become a member of one offered by a professional association.

• Evaluate your employee benefits. Employees receive an additional 20 percent to 30 percent of their salary in the form of benefits. Most of your employees don't know how much extra you spend on them, so remind them; give each one a personalized monthly or annual summary that shows the value of their employer-paid benefits.

Review the benefits package you currently offer to ensure that it's what employees really want. Look at the cost of each benefit and do some comparison shopping to see if a lower price is available.

• Analyze your contracts. Are there leases, support contracts or entire relationships with vendors that aren't as advantageous as you once thought? Look into purchasing equipment or real estate instead of leasing (or vice versa, depending on the terms and market conditions). Negotiate for support and, if applicable, seek on-going training and service from vendors as part of your purchase.

If you have advisers on retainers, make sure that you're actually getting value from those investments. If not, drop the retainer and negotiate a per-hour rate to use advisers just when you need them.

• Cut telecommunications costs.

Although reviewing relationships with all vendors is in order, telecommunications offers a particularly compelling place to start. Alternatives to your current system may offer better quality at a lower price. Talk to vendors about pricing bundled services, and check out voice-over Internet protocol (VoIP) for significant cost-savings.

Be particularly aware of services or items - such as out-of-state long distance packages or caller identification - that you're paying for but don't use.

• Pay on time. Interest and finance charges can really add up. Make sure you pay bills on time. If cash flow is a challenge during certain times of the year, discuss a line of credit with your bank. Paying interest on the line of credit is often less expensive than holding on to bills and getting socked with expensive finance charges.

• Do it yourself. Are there tasks that you could take on yourself? If you have a green thumb and could use some exercise, do the lawn care yourself. If you have a technological bent, serve as your own computer consultant.

• Buy insurance. Trimming insurance out of your budget often leads to financial problems in the long run. Don't go overboard, but purchase adequate insurance so that an errant situation doesn't turn into your financial ruin.

• Automate. Paying for statements to go out every month? Invest in an online bill payment system. Sending out registration paperwork to every new patient? Post forms in an Adobe portable document format (PDF) on your Web site for patients to download, complete and bring with them.