How do you keep track of the financial health of your practice?
Providers in small private practices rely on a variety of information that makes them comfortable. Some providers will ask for all kinds of data ranging from total billing and charges per month, amount of money received every month or even weekly, total aging, collections by procedures and CPT codes, patient balances etc.
On the other hand there are providers that rely on their office managers and builders tremendously and as long as money is coming into the bank they don’t question too much.
In majority of the cases providers missed the mark entirely.
This is an age where we have data and information overload. Everything is digital, everything gets stored as discrete data and therefore everything can be reported on. Does that mean everything is useful? What information should we look at and what should we ignore?
Bits of data in isolation are irrelevant. Total charges per month and a graph of it over the year are irrelevant if not compared to the productivity and the total number of hours that a doctor puts in per day.
Absolute numbers don’t matter as much as looking at a trend over time. Keeping the total number of patients seen over time constant and the total number of hours that you put in on a daily basis as constant, if the trend indicates a downward slope on collections, that is what we should be worried about.
Similarly, ratios and percentages are more important than absolute numbers. Total revenue per patient, revenue per procedure, productivity per employee, and similar such ratios are perhaps more important than absolute numbers.
I understand that providers do not have the time to look into this in detail themselves. Most office managers are not equipped to think like business accountants. That is why you should look into experts and consultants who can help you analyze this data. If you are outsourcing your billing, many of them can provide this insight.