Overhead Reduction Services

The following article was published in the Atlanta Hospital News in October, 2009
By Jeffry Finkel

Dear Jeff: Our practice provides cell phones to our physicians and traveling nurses. We are incurring significant charges for 411 calls. Is there a way to cut those costs? Betty, Office Administrator

Dear Betty: Cell phone users often incur 411 call costs because they do not have access to phonebooks or online directories that they would if they were in the office. 411 calls cost between $1.49 and $1.99 each, depending on the wireless company. Fortunately, free cell phone information services are available. Two popular ones are: (800) 466-4411 from Google and (800) 373-3411 from Free 411. Both offer business listings. Free 411 also provides residential listings. I find the Google service easier to use, and it can connect you to the telephone number requested. Free 411 does not connect you and requires you to listen to multiple advertisements before providing the number.

Dear Jeff: We are a small, one physician office, and we see about 20 patients a day. Most of our mailing involves bills, letters to referring physicians, and appointment reminder cards. We are thinking about leasing or purchasing a postage machine. Does this make sense for our office? Cassandra, Practice Manager

Dear Cassandra: Great question. Many businesses are unaware that the federal government prohibits purchasing postage meters; businesses may only rent or lease them. Were practices able to purchase meters, I might be more in favor of using them depending on the cost. While larger practices can more easily justify the cost of leasing, I question whether small practices really need a meter. Furthermore, some postage meter companies add to the cost by charging insurance to cover possible equipment damage. This is unnecessary since practices typically have business insurance that covers damage to office equipment. If your practice is similar to other small practices, you send relatively small amounts of mail. I propose keeping a supply of stamps on hand and affixing them by hand. Limit access to postage to control use of practice postage for personal use.

Dear Jeff: We are not happy with the office printing and copying equipment we currently lease. It is slow, and the lease is expensive. Our lease runs for two more years. Are we stuck or is there anything we can do to upgrade the equipment and reduce our costs? Robert, Front Office Manager

Dear Robert: Practices often mistakenly believe they are “stuck” with unsatisfactory equipment and / or with costly leases through the very end of a lease. Fortunately, many leases are written in such a way that practices are eligible to upgrade equipment after a period of time, say 75% of the lease period (e.g., 48 months into a 60 month lease). Office equipment companies are eager to retain customers and will often work with a practice to provide the practice with newer equipment, sometimes at more attractive rates than the original lease.

Dear Jeff: Our orthopedic practice, with four locations, incurs substantial costs related to shipping orthotics and other medical supplies and equipment. We have spoken to our various overnight shippers about reducing costs, and we have been able to reduce our costs only about 5%. What suggestions do you have for cutting our costs more? Lisa, Business Manager.

Dear Lisa: Before even reviewing your invoices, I know you can save money simply by switching from “overnight” to “two-day” service. Are you aware that the cost difference between sending just a two pound package between Atlanta and another U.S. city “overnight” versus “two-day” can range from $20 to $23 depending on whether you use FedEx, UPS or the Post Office? Sending that same two pound package within the metro Atlanta area would save $7 to $12 simply by sending it “two-day” rather than “overnight”. Many practices routinely ship all packages “overnight” and simply are unaware how much money they waste by not using “two-day” or even “ground” (cheapest rate) shipping. In addition to eliminating overnight delivery service, check out the new flat rate shipping services offered by the U.S. Post Office, and condense your number of shippers to as few as possible to take advantage of volume discounts.

Thanks for all the great questions. I look forward to answering more in future columns.