Outsourcing Back Office Operations Improves Medical Practice Bottom Line and Patient Care

10 Sep 2018

SOUTH ORANGE, N.J., Sept. 10, 2018 /PRNewswire-PRWeb/ — Physicians selling their practices to larger healthcare systems has been in an upward trend over the last few decades. Between 1983–2014, the percentage of physicians in private practices fell from 41% to 17%, while the percentage of physicians in practices with 25 or more doctors grew fourfold to 20%; 2016 marked the first year in which less than half of practicing physicians owned their own practice, at just 47.1 percent.(1) Large group settings don’t always mean upgraded patient care. In fact, practices with one to two physicians had 33 percent fewer preventable hospital admissions compared with practices with 10 to 19 physicians; practices with three to nine physicians had 27 percent fewer admissions.2 As a result, the solution to bolstering efficiency and patient care does not lie in consolidation, according to Dr. Karun Philip, Tranquilmoney president and co-founder.

“Outsourcing billing and collections functions helps reduce the burden of filing insurance claims and raising practice revenue,” Dr. Philip said. He notes that with smaller group practices where doctors are freed up from such administrative headaches, patients can receive more personal attention.

Medical costs are skyrocketing—up to $3.3 trillion in 2016—a number equal to 17.8% of the U.S. GDP.(2) While costs increase, physicians’ offices are dealing with ever-expanding regulation and stricter requirements for insurance reimbursement—a true administrative nightmare.

Many physicians turn to selling their practices, but being acquired by large organizations doesn’t necessarily improve patient care.(3) Hospitals bought 5,000 practices between July, 2015 and July, 2016 alone. Why did physicians sell? They sought stability and assistance with increasing administrative tasks due to evolving regulatory changes which make it more difficult to navigate the requirements for medical billing to be approved, leading to more claims denials.(4)

Responsible outsourcing of back office functions can save significant money related to medical practice billing and receivables, and could prevent doctors’ offices from being swallowed up by large organizations, retaining better quality of care. Also, outsourcing to trained and experienced billing services upgrades regulatory compliance and produces fewer claims denials (which denials can eat up as much as 10% of a physician’s practice income).(5) “Outsourcing back office functions in the healthcare industry can help lower physician claims denials, leading to reduced costs and more profitable physician practices,” Philip said.

The idea of medical practices merging with healthcare systems sounds good on the surface—the objective of saving money for patients is attractive—but such savings haven’t manifested. In fact, one study at Kellogg School of Management at Northwestern University showed the opposite result: researchers’ data showed that from 2007–2013, nearly 10% of physician practices were acquired by a hospital; once acquired, prices for services rendered by physicians rose by an average of 14%.(6) Another study, published in 2014, examined patients in California and found that hospital ownership of physician practices was associated with 10–20% higher spending.(7)

On the other hand, outsourcing gives physicians access to a staff of experienced coding and billing professionals, along with a wide range of other services. Medical practices and other healthcare organizations often find that they save time, money and resources when they use an experienced medical billing company, making it well worth the funds spent.(8)

Saving money is one of the core reasons for outsourcing, with India proving to be the most cost-effective provider. India’s outsourcing business today stands at approximately $118 billion (USD), clearly proving their dominance in the outsourcing landscape.(9) Tranquilmoney owns their office in India, smoothing the way for an excellent relationship with the staff. “Outsourcing medical practice back office functions frees up finances for the physician, enabling physicians to keep their practices and concentrate on patient care,” Philip said.

About Tranquilmoney
Tranquilmoney was incorporated in 1995 to provide solutions aimed at reversing the trend of doctors in independent practices feeling at a loss with the increased complexity of the business and regulatory side of the healthcare industry. The fallback of physicians selling their practices to large hospitals is one that is avoidable. Tranquilmoney has the tools in place to provide physician practices with financial management services, such as physician receivables management, pharmacy receivables management, healthcare insurance forms processing, and data capture services. In short, doctors can focus on patient care knowing that their practices are in order. The company is based in South Orange, New Jersey, with back office facilities in Chennai, India. Tranquilmoney, Inc., operates as a subsidiary of MM Group. For more information, visit


  1. Kane C.K, “Updated Data on Physician Practice Arrangements: Physician Ownership Drops Below 50 Percent,” American Medical Association, 2015. Web.
  2. Staff, Writer, “Small Primary Care Practices Shine in National Study,” American Academy of Family Physicians, 2014. Web.
  3. Amadeo, Kimberly. “See for Yourself If Obamacare Increased Health Care Costs.” The Balance, The Balance, 28 August 2018. Web.
  4. Frakt, Austin. “The Downside of Merging Doctors and Hospitals.” The New York Times, The New York Times, 13 June 2016. Web.
  5. Olgin, Alex. “Doctors Leaving Atrium Buck the National Trend of Groups Joining Hospitals.” WFAE, 17 August 2018. Web.
  6. Medical Reimbursement Services. “How Medical Billing Mistakes Can Hurt Your Practice.” Medical Reimbursement Services, 30 November 2017. Web.
  7. Capps, Cory, et al. “When Healthcare Providers Consolidate, Medical Bills Rise.” Kellogg Insight, 2017, Web.
  8. Robinson, J C, and K Miller. “Total Expenditures per Patient in Hospital-Owned and Physician-Owned Physician Organizations in California.” Advances in Pediatrics., U.S. National Library of Medicine, 24 October 2014. Web.
  9. “How Medical Coding Mistakes Affect Your Revenue?” Latest Updates on Medical Billing—, 13 November 2014. Web.
  10. Hambardiker, Pratik. “Benefits Of Outsourcing To India Your Boss Wants To Know.” Outsourcing Insight, Outsourcing Insight, 16 March 2018. Web.

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