Did you know that prior authorizations cost you an astonishing amount of money every year? Most medical practices spend a lot of money on authorizations without even realizing it. Having a front office assistant doing authorizations can cost you an average of $120,000 a year. The goal for any business is to save costs without compromising on quality and production – we’re here to tell you that’s possible.
We know all too well how costs add up. We spent some time looking at the numbers and really focused on breaking down how much it really costs your practice to do carry out prior authorizations – the results were mind-blowing.
The Numbers
Most medical practices have front office staff working on authorizations – however for psychiatric clinics, for example, oftentimes it can be the doctor themselves carrying out authorizations on their own which means you’re looking at an average of $50 per hour on authorizations.
However, for this blog, we’ll focus on the cost for at least one front-office assistant carrying out authorizations.
Wages differ from state to state and practice to practice. For our calculations, we decided to go with the average rate per hour for a front desk assistant which amounts to about $30/hour. Go ahead and add an extra 10% in taxes, $10,000 for insurance plus the cost for an office space, training, onboarding, and employee benefits and you’re looking at a large hole in your overhead. So far so good? Let’s get into the nitty-gritty.
The average amount of time it takes for one authorization is about 20 minutes and most medical practices carry out an average of 50 authorizations per day.
With the $30/hour base pay we calculated, you can determine how much it really costs per authorization. If you divide the $30 you pay your front office assistant per hour, it gives you the amount you pay them per minute. Simply multiplying the per-minute cost into 20 minutes (the amount of time it takes to do one authorization) you get approximately $10. It costs you $10 for one authorization.
Now that number might not be so bad if you take it at face value, but when you multiply $10 into an average of 50 authorizations a day, you’re looking at a value of $500 in a single day, $2,500 in a single week, $10,000 in a single month, and a whopping $120,000 in a year just on authorizations. Plus, who’s to say that 50 authorizations are a hard stop? Or that your front office won’t take longer than 20 minutes to do an authorization?
It can take a lot longer to carry out authorizations for some medical practices – specifically psychiatric practices. Psychiatric practices often juggle a handful of tasks such as taking notes, requesting labs, doing medication refills, and answering phone calls. While most psychiatrists often juggle these tasks on their own, they often end up falling behind on vital tasks causing them to spend more time than they would if they had additional assistance. Not only does this reflect poorly on your customer service, but the more time taken on each task, the more overhead you’re spending. Hiring is also an additional expense, and at Edge Health we understand that.
It doesn’t have to be that way though, luckily we also did the math for a solution – one that we’re willing to share with you free of cost!
The Solution
Now that we’ve gone over the bad, let’s go over the good. You don’t have to spend that much on authorizations. What if we told you that you can have three employees for about the same amount of money you pay one front office assistant? What if all three of those employees focused on authorizations alone? Maybe you don’t need three people to focus on authorizations but you can still have one who can drastically bring down your cost per authorization and still produce more than a front office assistant can in a single day. You probably know where we’re going with this but the numbers speak for themself.
If you divide $30/hour by 3, that’s approximately what you pay to have three Edge Health Ambassadors – remote, talented, and pre-trained employees ready to take your practice to the next level. Following the same math from earlier, it costs you approximately $4 per Ambassador to do one authorization- already a stark difference. An average of 50 authorizations a day was once costing you $500 a day now costs you $200 which saves you $300. Again, take those numbers on a large scale for a higher number of authorizations per day and you’re saving thousands of dollars!
Who wouldn’t want that? Not to mention you’re saving on a ton of other overhead expenses with an Edge Health Ambassador such as training costs, employee insurance costs, benefits, and onboarding costs because we take care of that for you. Ambassadors can also take care of a ton of busy work for you such as requesting labs, medication refills, and answering phone calls – saving up to an extra hour or two every week for you which is a lot of time.
When we say we help medical practices work smarter, we mean it. Your success is our success – even when it comes to your pocket.
The Result
With numbers like that, the results are clear – you’re spending way more than you need to on authorizations every single year. Providing medical practices with smart solutions is what we offer through our Edge Health Ambassadors. Partnering with us means you open up a pandora’s box of resources to help bring your overhead down while boosting productivity to a whole new level. It’s a win-win solution.
