Make outsourcing work optimally for you and your medical practice

September 1, 2012

A dermatology practice is a hotbed of activity. In addition to the clinical care you provide, there is staff to manage in carrying out your orders, supplies to use, bills to be sent and money to be tracked. The complexity of a practice makes outsourcing - using outside firms to handle work you would normally perform in-house - appear quite appealing.

Key Points

Whether it's turning over control of your entire operation to a management services organization (MSO) or just finding someone to perform your billing, outsourcing serves an important role. Before making the jump to (or away from) outsourcing, you must inventory your practice's internal processes to understand how outsourcing will affect patient throughput, work flow, staffing costs, patient relations and other factors, in addition to revenue.

Successful outsourcing can allow your dermatology practice to do the following:

Matters of cost

It pays to evaluate all reasonable options for managing the cost of a function under consideration for outsourcing. Focus on getting high-quality service at a reasonable fee. Price is often the easiest aspect of the vendor relationship to quantify, understand and predict, so it's natural to give it priority. Price may well be a deciding factor when considering whether to outsource a function, but there's little comfort to be had in getting a low fee if it comes with poor performance. What you might save by going with a lower-priced billing service, for example, might cost you much more in the long run if you get poor performance - an outcome you don't need at any price. Worst of all, you may not recognize how far performance in the outsourced function has dipped until after it happens and you find yourself in red ink or besieged by unhappy patients and payers.

Avoid the "apples to apples" comparison fallacy. The difference in cost between a vendor with an all-inclusive package and one that takes an a la carte approach to pricing may be much greater than it first appears. It's important to include your internal costs as well - costs to get information transferred to and from the vendor. If the vendor places a significant burden on your practice to prepare the work for them, this aspect of the relationship can be very costly.

Billing services, for example, typically run from 5 percent to as high as 9 percent of collections for dermatologists. Why the wide range? Like many other management functions, billing includes a multitude of activities, which is why you need to look beyond price to find the true cost.

Contracting, credentialing and provider enrollment, charge entry, payment posting, denial management, collections, information systems support, and reporting are among the essential tasks associated with billing. Some vendors perform all of these tasks, while others limit services to transmitting claims. Vendors may include these tasks in a comprehensive package or charge a la carte (for example, charge separately for postage associated with statement mailings). Either route you go, it's critical to understand what you're getting for the stated price. You may find it is a worthy investment to pay more than rock bottom for services if you truly get your money's worth.