Editor's Note: This article is part of the Financial Advisor series "How I Solved It." Advisors describe a problem client and what they did to help.

Not long ago, a physician-owned clinical practice came to CJM Wealth Management, an independent advisory firm in Deer Park, N.Y., complaining of severe budget problems.

It was spending too much for just about everything, from big-ticket medical equipment to everyday disposable supplies such as catheters and Band-Aids. "The group was struggling to maintain a consistent purchasing strategy," is how Charlie Massimo, CJM's founder and CEO, put it.

The practice included a group of nearly 130 doctors and 650 support staffers—nurses, assistants and billing and clerical personnel—spread across 65 locations. At each location, said Massimo, buying decisions were random, guided more by habit and personal preference than by what made the most sense financially. Few if any departments had done recent price comparisons, for example.

With more than $400 million in assets under management, CJM specializes in serving affluent physicians and families with high medical expenses. So Massimo was confident that his firm, a member of the Dynasty Financial Partners network of advisory firms, could help the group save money.

Phase one was zeroing in on the inefficiencies in the medical group’s purchasing practices. Massimo spearheaded a team of specialists to examine "nearly $3 million in expenses across many of the group's spending categories," he said. "We were able to look at all purchases and compare them to competitors', as well as [compare them to] best pricing throughout the industry."

CJM examined everything from payroll processing to the procurement of office supplies and medical malpractice insurance. The firm brought in experts in cost remediation, which is an analysis that involves, in part, benchmarking current expenses to compare the cost of goods to equivalent products available elsewhere. "Cost remediation is commonly used to create a negotiation strategy to help lower overall costs," Massimo explained.

The next step was to "gain a thorough understanding of the client's culture and any cost-reduction initiatives that may have previously been attempted," he said. The potentially tricky part of that, Massimo shared, was to remain as unobtrusive as possible. "[We were] careful not to interrupt the client's staff and daily operations," he said.

His team identified opportunities for sustained savings across several categories. For instance, the way the group chose providers for medical and office supplies was "disorganized," Massimo recalled. Each office had its own point person. CJM suggested that "all purchasing be coordinated through one central office [to] reduce redundancies and help the group take advantage of buying power by ordering in bulk," he said.

But that wasn't the end. "After the client approved all recommendations, our team assisted in implementation," said Massimo. That included drafting communications with vendors, renegotiating contracts and assisting in the transition to new vendors and new terms where appropriate. "We monitored the results and reported to the client monthly to ensure savings were realized," he said.

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