During this economic downturn, "ancillaries become more important because a little money is better than no money," notes David Scroggins, the president of Clayton L. Scroggins Associates in Cincinnati.
agrees that practices have to take a closer look at their ancillaries.
cautions doctors not to be alarmed if they see overall practice overhead rising as a percentage of revenue because of declining ancillary income.
If, for example, your expense ratio rises from 52 percent to 54 percent, he
notes, it's OK because you're still making extra income that you couldn't have generated without the ancillary.
Even if an ancillary is just breaking even or is slightly unprofitable, Scroggins
says, you should think twice before dropping it.
First, you've already invested a fair amount of money and effort in the service.
Second, you don't want to lose good technicians who were hard to recruit and train.
And third, when business comes back, it's going to be a lot more expensive to build an ancillary from scratch than to ramp up the one you've held onto.
"We're going to have a couple of bad years, and who knows what's going to happen with health plan reimbursement, but it's not to the point where we do away with our diversification," Scroggins