There are many indicators that managers follow to stay on top of how a practice is faring financially. Here are eight that we put in the “must track” category.
Patient volume: This key indicator should be tracked per day and per month, by provider, and be broken down into new versus established patients. Depending on the specialty of the doctors, you may also wish to track visits by type (e.g., annual physicals, OB visits, surgical consultations, post-op visits, etc.). In addition, tracking no-show and cancellation rates can provide insight into why those issues are occurring and what might be done to correct the problems.
Charges: Here you’ll want to track monthly gross charges by provider as well as by RVU. Although you know you’re never going to collect the full amounts you charge, this raw data is useful for analyzing provider productivity.
Collections: Obviously, you want to know how much you collect each month, again broken down by provider. Track your collections as a percentage of total charges to determine how much you’re writing off for third-party payer adjustments and bad debt (track bad debt separately, by the way).
Accounts Receivable: Track your overall A/R totals by provider along with how old the balances are (i.e., 30, 60, 90, 120 days).
Third-party payer denials: It’s important to know which of your submitted claims are being denied by which third-party payers, and why it’s occurring. Only then can you make adjustments to your procedures to reduce the number of denials you have to deal with.
Overhead: Tracking practice costs is the first step in controlling them. Most likely, staffing will be the largest line item expense for your business, followed by rent/lease payment, insurance, supplies, equipment, and on down the line. Because paying overtime can quickly eat into practice profits, track this piece of overhead data separately rather than just lumping it in with payroll.
Access: Service is paramount in today’s environment where patients routinely rate their healthcare providers online and use the ratings of others to determine whom to choose for their care. Keep track of how long it takes for both new and established patients to get an appointment in your office. In addition, periodically conduct an in-office study to track wait times, both from the time a patient walks through the door until the time they’re escorted to an exam room and the time they wait in the exam room before being face-to-face with a provider.
Patient satisfaction: Access and wait times are just two components of overall patient satisfaction. At least once a year, conduct a patient satisfaction survey to see how you’re doing and where you have room to improve.
Once you’re consistently tracking these important indicators, the question becomes what to do with the data. You can start by comparing your practice with national figures to determine how your providers stack up to the averages. Check out the MGMA’s website to find information on getting copies of their annual benchmarking tools.