Eli's Rehab Report

Published on Sun Oct 17, 2010 PDF

Small things add up: for example, buying cheaper stationery.

Economic recession or not, cutting costs is on every rehab manager's mind.

Whether or not your rehab practice or facility has felt the recession's impact,  take it as an opportunity to get in a money-saving mode. You may be surprised at how favorably your bottom line responds.

Identify Your Biggest Expenses

Need to urgently rescue your bottom line? Then you should target your top expenses first. That's usually payroll and lease payments. "If you've had a drop in business, you've probably had a drop in need for some staff. You may not need to eliminate a position, but you may need to drop people's hours," says Michael Weinper, MPH, PT, president & CEO of PTPN in Calabasas, Calif. "It's very difficult to do, but it's a smart business decision because your highest cost of operation is your wages." You can also consider temporarily suspending certain benefits, such as dental, vision, or 401k matches, he adds.

Important: If you're paying rent, don't assume you have to stick with that rate. "In some cases, we have been able to renegotiate contracts that are more favorable and affordable," says David Standifer, PT, president of Oregon Physical Therapists in Independent Practice and owner of TAI Central Point. "Landlords today often have other places going out of business, so they'll want to keep you and will often work with you, maybe even on a temporary basis," Weinper points out.

Tip: Bring creative ideas to the bargaining table. For example, "Offer to clean your own space in exchange for a lower rent so the landlord doesn't have to pay for a janitor," Weinper says. "Or, if the landlord pays utilities, tell him you'll make sure your office is totally ‘green' at night (lights off, computers powered down, etc.) to save the landlord in utilities."

Don't miss: As for other big budget zappers besides payroll and rent, keep in  mind your capital expenses. "Put off any capital expenditures that can wait,"recommends Ellen Strunk, PT, MS, GCS, with Rehab Resources & Consulting Inc. in Birmingham, Ala.

Smaller Things Do Add Up

If your budget isn't hurting bad enough to make big cuts, there are lots of smaller, hidden costs you can tackle. For example, don't waste paper or printer/copier toner, Strunk says.

Try this: In addition to talking to your landlord, "review all business contracts (phone, yellow pages, etc.) and see if you can make changes to save money as many [businesses] have lowered rates," points out Chuck Felder, PT, MBA, with HCS Consulting Inc. in Corona, Calif.

For example, consider shopping for a new health insurance policy with lower rates. "Since insurance is pretty much a commodity, you should get the most for the lowest price," Weinper posits. And don't look just at your health insurance plan; look at your property and casualty, liability, and malpractice policies for lower rates, he adds.

You might also "renegotiate credit card interest rates if you have a good payment history, or try getting new cards with lower initial rates," Felder suggests. And on the subject of credit cards, pay off your loans to save interest expenses, he adds. "Take the cash from reserves, but don't go too low on reserves."

For home health therapists, keep cell phone calls to a minimum, Stunk recommends. Home health therapists can also plan routes more effectively and call patients ahead of time to save on gasoline, she adds.

Strategy: Consider going to a four-day, 10-hour week instead of having five eight-hour days, Weinper adds. "You get longer hours of operation, more efficiency, and a chance to save on utilities."

Other small costs-savers Weinper suggests include buying supplies in bulk, buying supplies from local vendors who offer free delivery, using both sides of paper whenever possible, and collecting and using coupons.

For a full list of cost-saving ideas provided by PTPN, email the editor, Lindsey Rushmore, at http://RehabReport@ gmail.com.