Having your own medical business is quite a rewarding accomplishment. On top of being your own boss and being in a position to positively influence the standards of healthcare, running a medical business comes with good monetary rewards.
However, like any other business, you’re not immune to the usually high startup and operational costs. You can actually incur losses if you don’t properly balance your expenses against your income. While some business costs are inevitable, others can smartly be avoided without compromising your service delivery standards. Here’s how to avoid unnecessary fees at your medical business.
Save On Credit Card Processing Fees
If it were possible, you would only accept cash payments for your medical business. However, more people are increasingly resorting to using only credit cards for payment. To them, it’s a matter of convenience and safety. But, for you, it’s quite painful as it may significantly eat into your profit.
On average, you lose about 3-5% in fees whenever a patient pays with a credit card. This deduction comprises:
- Payment network fees
- Interchange fee for the card-issuing bank
- Fees for the medical payment processor
- Assessment fee for the credit card issuers
Don’t underestimate the implications of these fees. If your patients pay an average of USD$100,000 monthly using credit cards, you can lose up to USD$5,000 monthly or USD$60,000 annually. That’s a lot of money, to be honest.
Here are six practical tips to help you reduce credit card processing fees:
- Avoid manually keying in credit card information as this attracts the highest processing fees. In case the patient’s card won’t swipe, request them to pay using other methods like cash.
- Negotiate with your credit card provider to subsidize fees that they have control over. These may include the processor’s markup, virtual terminal fee, annual fees, PCI compliant fee, and equipment fee.
- Set the minimum fee for which you accept payments through credit cards. This way, you ensure that the deducted fees are only a small percentage of your total revenue. Patients whose charges are below the predefined minimum may be forced to spend more or pay using other methods.
- Shop around and settle on the credit card company with the lowest processing fees, as long as they’re reliable and trustworthy.
- Purchase your own credit card terminal instead of renting one. You’ll recover the purchase costs within a few months and thereafter continue using the system without any rental charges.
- If your state or country laws allow, pass the credit card processing fees to your customers as a credit card surcharge
Make The Most Of Your Space
If you’re renting space to run your medical business, consider carrying out a thorough assessment to ensure that you’re not paying for unnecessary space. Start with a detailed analysis of how you currently use your physical space.
Ask yourself such questions:
- Can the furniture be rearranged to occupy less space without sacrificing the comfort of the employees and patients?
- Can some of the less frequently used medical equipment be bundled up into a storage room and only removed when needed?
- Can you use space for dual purpose, say the boardroom doubling up as a storage room?
- Can different departments of your medical business occupying different offices be consolidated into one?
- Can the patient waiting area be downsized without compromising the comfort of patients during peak times?
After such analysis, you’ll probably realize that you can use less space. That extra dollar or two on rent unnecessarily adds to your operational costs. Reduce the total space you’re renting and save cash.
Save Money On Insurance
Insurance is very important for a medical business. You may have to take all or some of the following insurance policies:
- Insurance for your own health
- Disability insurance
- Property insurance for the business premises
- Malpractice insurance to protect you against claims of medical negligence
All these insurance policies demand monthly premiums to be made. Consider the following tips to help you save money on insurance:
- Get multiple quotes from different insurance companies so that you settle on the one with the most affordable premiums.
- Combine your policies with one carrier, and you can qualify for generous discounts.
- Maintain a good credit history so as to be charged lower premiums by insurance companies.
- Claim whatever discount your insurance policies offer.
- Reduce your coverage if possible. Only take those insurance covers that are absolutely necessary.
- Pay your premiums annually or semi-annually instead of making monthly installments. Most insurance companies give discounts for such bulk payments.
Cut Sales And Marketing Costs
As much as you want to establish your presence in a given community, don’t overmarket yourself. You’ll end up spending more money than is necessary. Here are four useful tips on cutting your sales and marketing costs:
- Go for quality and not quantity: Don’t be tempted to put your name on every newspaper, magazine, radio station, television channel, notice board, and social media platform. The advertising costs will definitely be exorbitant. The ads may also not be of sufficient quality, considering the huge number you’re managing. Select two or three channels for advertisement and put your best foot forward. You may want to mix internet and traditional marketing for best results.
- Have both inhouse and outsourced marketing teams: Marketing activities can sometimes feel overwhelming due to the complex nature they have evolved into. You don’t have to maintain a full marketing department to handle all your marketing activities. Your in-house team can be minimized to one or two persons, and then all other marketing tasks outsourced to relevant companies or consultants.
- Concentrate on referral marketing: Work diligently on improving your customer relationships, and you may never have to spend a cent on advertising again. Well-treated patients will proclaim your goodness to others through word of mouth.
Your medical business may have many startup and operational costs. While these are key to the smooth running of the business, you should always find a way of reducing the costs so as to remain profitable. There are several ways to avoid unnecessary fees at your medical business, four of which have been highlighted above. Implement them in your business for better profitability.