How do you deal with the changing landscape of finances? How do you train your staff to deal with the world of limited or no insurance, and the hassles that go along with different types of cases? One of the goals of being in private practice has to be to achieve a certain level of financial independence, or your doors won't be open very long.
You need to define some targets and track your progress. You want to make sure your targets are written and clear. At minimum, you should have monthly, weekly and daily targets for the amount of income you collect and the amount of services you produce.
To start, you need at least the basics of an office manual and staff training checklist in place. There are several great online resources you can use when you're putting together your basic office manual, but policy selection has to be based on your own particular practice and environment. Remember to make changes to your office manual, to keep policies up-to-date.
You also should have efficient collection and management software, as well as the staff training to go along with it. I know this expense is something you may look at as unnecessary, but in my experience, in this technological age with collection, data management and record-keeping software, you absolutely have to keep up-to-date with the product advancements.
You need to consider record-keeping and statistics. This is applicable not only to the doctor in charge, but also to the office manager who might be assisting the doctor. It doesn't have to be complicated, but it should be done.
The first statistic I believe you should track is what I call your "new-patient average." It is sometimes also referred to as your "case average." Basically, this is the gross amount of collections for any given period of time, divided by the number of new patients in that period. You can do this over the month or year. The longer you've been in practice, the more varied your statistics probably will be, because you're going to want to refine them into different time periods. You definitely want to make sure you know what your new-patient average is. Why? It gives you a good indication of where you're at with regard to other people in your profession. There are different case averages for dentistry, internal medicine, chiropractic, physical therapy, etc.
Next is perhaps one of the most important statistics - it's what's called your "office-visit average." Basically, you divide your net collections (the amount of revenue you have collected into your office) by the number of office visits for any given period of time. That is a particularly important statistic because it allows you to determine not only how much you're generating on a per-visit basis, but also what your profit is on a per-visit basis. This is becoming extraordinarily important in the age of managed care. You also should know your number of office visits for any period of time. Daily and weekly office visits are an important benchmark.
There are some other statistics I think are imperative if you truly want to collect and organize on a regular basis. You should know what your gross services are - the pre-adjustment amount (in dollars) generated as a result of services you and your associates provide, sales of goods, and so on in any given period of time. This is a statistic you should be aware of daily, weekly and monthly. Another important statistic is your income. I like to take a look at the gross amount of dollars that have come into the practice in any given period of time, and what refunds might have been issued as well. This is a statistic that can be kept very simply. It's certainly something you need to track on a more frequent basis than many other statistics.
If you have employees, associate doctors or partner doctors, you need to know what their production is for basic financial reasons. Likewise, you need to know the number of new patients in any given period of time. With regard to new patients, I like to count former patients in that statistic. If you have a patient who has been away from your practice for awhile, and then comes back and undergoes a course of treatment, count them as a new patient. You'll see why as you start to develop some of your statistics and record-keeping programs.
Another important statistic to track is your "front-desk collections" or FDC. This is easy to keep and track. Basically, it should be all non-insurance collections. This allows you to take a look at your efficiency and communication efforts, as well as how efficient your front desk is at getting necessary copayments and uncovered expenses.
It's also important to know the number of missed appointments and cancelled appointments over a given time period. With many record-keeping programs, this is relatively easy to track. Software programs generate these statistics in a very straightforward manner.
In my practice, I like to have my business office prepare all of the basic statistics for me at the end of business on Friday. (We currently don't see patients on Saturdays, so Friday is our last business day.) After all charges are entered and any needed corrections to any data sheets are made, along with the posting of all payments, my staff produces the basic reports. They go into my in-box. On Monday morning, it's one of the first things I take a look at. I try to compare it to the basic goals we set for the previous week. Then on Tuesdays, when I have a one-hour block of administrative time for myself, I run more detailed statistics.
Finally, a few words about insurance and fee schedules. First, you need to be aware of what your reimbursement is by carrier. What are your office visit averages and case averages for Blue Cross/Blue Shield, Medicare, etc.? This allows you to see what you're generating versus what your costs are for those particular patient visits. I did this many years ago when I decided to pull out of many managed care organizations. It was literally costing us too much to participate in these plans. I gave patients the option of going to another doctor of their choice or becoming a cash patient. I'm happy to say that many of the patients stayed with us.
The other situation you need to track is the fee schedules for your particular area. There are several companies that publish health care statistics. Almost universally, insurance companies use the one that is on the lower end of the scale. Each profession has available to them various fee schedules for your particular geographic region. Medicare also has reimbursement schedules for participating and nonparticipating practitioners on its Web site. You need to be aware of what your reimbursement is on these plans versus what your current fees are. You have to make sure you're not undercharging. At a minimum, you should review your fees annually.
Dr. John Hayes Jr., a graduate of National College of Chiropractic, practices in Massachusetts. He also has a Master of Science in Biology and Nutrition from the University of Bridgeport and is a diplomate of the American Board of Chiropractic Orthopedists. Dr. Hayes is the founder and president of Health Solutions Group and the author of Beating Neuropathy - Taking Misery to Miracles in Just 5 Weeks! For more information, visit http://neuropathydr.com.