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Revenue & Profitability

Challenges of Revenue & Profitability

For any business, medical practices included, remaining profitable is necessary to stay in business, but in healthcare there are a number of challenges when it comes to revenue and profitability.

First of all, there’s the reality that patients are now the third largest payer, a fact that causes quite a bit of financial difficulty. With the increase of high-deductible insurance plans in the United States, more of the financial burden of healthcare is falling on the shoulders of patients who can’t afford the medical bills they’re accumulating. This then ultimately shifts the financial burden to providers who are having difficulty collecting on medial debt, a reality that endangers practice profitability. Next are claim denials, which not only delay reimbursement but also cost money to be corrected, roughly $118 per denial to be exact.

Value-based Care is another challenge to the profitability of practices, as this transition is necessitating a complete adjustment of how practices receive payment and how often. During this transition that translates into a heavy financial risk that, unfortunately, many practices were not prepared for. Finally, there is the consideration of regulatory programs, especially those through Medicare and Medicaid under the Quality Payment Program. Whether a practice is participating through the Merit-based Incentive Payment System (MIPS) or Advanced Alternative Payment Models (APMs), they must successfully satisfy the requirements of these programs or they risk facing negative payment adjustments and experiencing a further hit to their revenue.

All of this is particularly concerning for providers because, let’s be honest, they went to school to become doctors, not business people. Schooling for physicians focused on patient care and building solid relationships with patients, not on how to generate revenue and maintain profitability. Regardless, this is a necessary part of having a medical practice and you’ll need to get a handle on it to keep your business afloat.

Revenue, Profitability, and Your Small Practice

Interestingly enough, while many practices perceive that they are struggling with revenue, studies show that revenue has actually been increasing in recent years.

Family Practice

Average Revenue 2016 Average Revenue 2019
$1,493,518 $2,111,931

Non-Invasive Cardiology

Average Revenue 2016 Average Revenue 2019
$1,260,971 $2,310,000


Average Revenue 2016 Average Revenue 2019
$1,422,677 $2,965,277
This increase in revenue from 2016 to 2019 is fairly consistent across specialties.

General Surgeons

Average Revenue 2016 Average Revenue 2019
$2,169,673 $2,707,317


Average Revenue 2016 Average Revenue 2019
$2,445,810 $3,437,500

Obstetrics and Gynecology

Average Revenue 2016 Average Revenue 2019
$1,583,209 $2,024,193
And much of that revenue is available for practice expenses, as the physicians themselves are receiving a relatively small portion for their salaries:
  • Family Practitioners earning an average of $241,000
  • Non-Invasive Cardiologists earning an average of $427,000
  • Gastroenterologists earning an average of $487,000
  • General Surgeons earning an average of $350,000
  • Neurosurgeons earning an average of $687,000
  • Obstetrics and Gynecology earning an average of $324,000

Fighting Financial Fallout

You may be wondering, if revenue is actually increasing, why are doctors struggling with revenue and profitability at their practices? The reality is that reimbursements have become increasingly complicated due to the financial burden that has fallen to patients by way of high deductible insurance plans and the increasing documentation burden on providers from payers who, by the way, are also often paying less than they have in the past. On top of these issues, the expenses of keeping a medical practice going continue to increase, leaving the doctors who run those practices struggling to figure out how to increase revenue or cut costs.

Overall, the biggest issue facing medical practices when it comes to getting money in the door is the shift of financial responsibility for healthcare to the patient. Many patients can’t afford the medical expenses they’re facing. For the rest of the patients who actually can afford to pay those bills, it’s not something they’re used to worrying about and without convenient ways to make payments on their time, they often forget, leaving the practice in a lurch waiting for accounts to be brought current.

Patient Payments at a Practice in Modesto, California

This is what happened to one practice in Modesto, California. As financial responsibility shifted to patients, they continued to operate as they always had, accepting patient payments over the phone only during their normal business hours, which were also the hours that most patients were at work and unable to pay their medical bills. As a result, they weren’t getting the money they were owed and their patients weren’t happy with their experience. This was obviously causing issues with revenue and profitability. So they made the decision to utilize online patient payments and quickly saw the difference having a convenient, automated, and streamlined system in place for their patients made. Now they’re receiving payments on time and their patients are much more satisfied than before.

And this is only one way to ease revenue and profitability concerns among many methods out there.

There Has to Be a Better Way

Whether revenue is truly decreasing or just feels like it, practices must continue to evolve with societal changes in order to see the greatest amount of profitability. That starts with changing up your business model. As with any other business, lowering overhead costs is a good place to start. While this idea often brings to mind staffing reductions, that’s not the only way to accomplish a stronger bottom line.

Another option is to shop around for all the supplies and services that your practice uses to see what you can get for a lower price. This might also be a good time to shift to more virtual care, as that requires less in-person staff and expensive PPE, lowering operating costs. By using virtual visits you can see more patients, more efficiently and you’re also likely to attract even more patients who appreciate the convenient option of virtual visits, increasing revenue along the way.

It’s also important to utilize patient engagement tools. Many of your patients are already likely using wearables. See how you can utilize these gadgets and the data they produce to engage your patients in being more proactive about their health. This could lead to the ability to earn some revenue through monitoring patient generated health data, especially in your chronically ill population. Invest in automated patient reminders to ease some of your staff’s busy work, allow your patients to respond more quickly and conveniently, and give you a more accurate idea of where your schedule stands so that you can make adjustments accordingly. And make sure that your practice is on social media. Your patients are certainly spending time online, so take this opportunity to connect and be seen as an overall resource, not just the place they go when they aren’t feeling well.

Get set up to collect online patient payments. As a society we’re used to being able to take care of our financial matters quickly and conveniently online; if you want your patients to bring their accounts current, you need to be allowing them to do so their way. And while you’re at it, implement better RCM processes overall. Train your staff to collect patient payments at the time of service. Keep detailed notes on the status of patient accounts and follow up accordingly. Consider using electronic statements to streamline the billing process and reach your patients more efficiently. Get set up to have a patient credit card on file and authorized for regular payments in order to keep your accounts receivable up to date.

By putting the combination of each of these pieces into place in your practice, you will be able to collect more revenue and stay profitable so that you can focus on the reason you became a doctor in the first place – to provide outstanding patient care.

MicroMD Can Help


MicroMD’s software enables providers to increase revenue streams and profitability so your practice can see a greener bottom line. We start with MicroMD PM, our full-featured practice management software that offers advanced scheduling, patient registration, billing, claims management, robust reporting, and more. From there, utilize one of our preferred clearinghouse partners, all of which are fully integrated with MicroMD and feature coordinated enrollment, setup, implementation, training, and support to give practices outstanding billing services fast.


We also offer Worldpay ePayments and Revspring eStatements to streamline the billing and payment process, breaking down the barriers to receiving patient payments. Finally, when you’re ready to adjust that business model and embrace virtual visits, MicroMD can help with our Virtual Video Visits powered by Medpod, designed to increase patient satisfaction, enhance your model of care, and grow your practice.

Are you ready to stop worrying about revenue and start thriving?

MicroMD PM

Cloud and on premise Practice Management

MicroMD PM simplifies patient management and revenue cycle from scheduling, registration, billing, claims management and collections.


MicroMD e-Prescribing

Cloud and on premise Electronic Prescribing

Electronically prescribe your patient’s
prescriptions safely and accurately.



Cloud and on premise Electronic Medical Records

Full-featured, customizable ONC Certified EMR that accommodates a variety of specialties. Improve workflow, enhance care delivery and boost productivity.

Medical Practice Profitability Resources


Practice Guide to Getting Paid Faster


4 Ways to Improve Payment Collections at Your Medical Practice


How to Improve Profitability for Your Medical Practice


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