Know Your Margins
- Posted on: Sep 22 2020
Providers often enter into agreements with vendors and once these agreements are in place, they are never reviewed again. Unfortunately, this is a common occurrence with pharmaceutical vendors where margins can be slim at best.
Over time, the cost of these medications rise and reimbursement either shrinks or stays the same. This leads to diminishing profit or even operating at a loss.
When reviewing profit margins on pharmaceuticals, one must look at many different factors in exploring profitability. The cost of the drug versus reimbursement is one factor but there are others to take info consideration. For example, staff time must be reviewed. Does an injectable require an authorization or referral? Does the patient need conservative treatment prior to the injection? If so, is your office following protocol to make sure you get paid?
Reviewing this information quarterly will ensure your practice is profitable and not losing revenue due to lack of attention. If you are unsure on how to proceed in this review, Innovative Healthcare Management Solutions can assist. Please feel free to reach out and contact us today.
Tagged with: Profit Margins
Posted in: Practice Consulting