Have you ever wondered why a round pizza is always put into a square box? Why aren’t the boxes round? Seems silly, right? Not so fast….I’ll get to the answer to this seemingly irrelevant question shortly.

In business, we sometimes have to do what’s counterintuitive. While the whole concept of outsourcing makes perfect sense to us for some of our business processes (IT, HIPAA, accounting, etc), I often find physicians reluctant to outsource their billing despite the many advantages that “specialization of labor” creates. They fear the loss of control, not enough attention paid to smaller claims, etc. In today’s world of highly specialized medical billing skill sets, nothing can be further from the truth.

Besides the advantage of having a team of skilled and industry-specific billers behind you, the economics behind outsourcing certainly makes sense. Almost all of the costs that you have allocated towards billing (staff, benefits, technology, education, absenteeism, etc) disappear when you outsource. During my many years of performing Cost/Benefit Analyses for practices, I have found that the average cost of performing billing in-house (when all direct and indirect costs are truly allocated) averages somewhere around 10% of collections. The benefit of outsourcing not only then results in paying a much lower percent, but also allows focus to return to the practice’s core business of patient care and higher production. That “swing” could be as much as another 2-5%!

So while outsourcing billing may seem as counterintuitive as a square box for a round item, it’s only that type of “out of the box” thinking that allows a business to thrive and progress in the complex world of coding and billing.

Oh by the way, pizzas come in a square box because it is simpler, cheaper and easier to make a square box than a round one since a square box can be formed from a single sheet of cardboard. A square box is also easier to store, transport and pack since square boxes will remain in a flat state until needed and are quickly assembled at the point of use. Sounds a lot like outsourcing to me!

If you would like a FREE Cost/ Benefit Analysis performed on your billing process, please email me at John@nemohealth.com.