Is there anything worse than working your tail off, only to be told you aren’t doing enough? Or to feel like you’re working harder than everyone else, yet no one seems to notice? If productivity is a topic of frequent discussion — or argument — in your practice, you’re hardly alone.

It’s one thing to feel like you are working hard; it’s another thing entirely to be able to prove it or know where you stand relative to your peers and partners. That’s why you need to settle these arguments with hard data.

There are some methods commonly used in healthcare to measure productivity. Understanding the pros and cons of each will give you a better sense of how fair productivity measures are and the best way to quantify your practice.

Here are four methods to consider:

Gross charges

Gross charges refers to the total volume of services billed during a defined reporting period (i.e., monthly, quarterly, annually); it is typically easily tracked using information system reports.

For comparative purposes, all services should be reported using a consistent fee schedule, meaning that services are billed at the same rates for all physicians and payers. Within a single practice, this is easily accomplished, but it makes the gross charges method less effective for assessing how you compare with your nonpartner peers. You just can’t know if they are charging much more or much less than you are — and that makes comparison impossible.

Another difficulty with this method is the fact that changes in the fee schedule can skew results from year to year, and will need to be taken into consideration.

Some practices skew gross charges by billing specific plans using their allowed reimbursement rates (e.g., Medicare, workers’ compensation), but using a higher fee for all other insurance plans. We advise against this approach for several reasons (except when a physician does not participate with Medicare, or the workers’ compensation plan mandates it), including the fact that it gives physicians varying credit, although the same service was provided.

Using gross charges as a productivity measurement method is most effective when fees are set using a relative weighting system, rather than using random rates that may not reflect realistic reimbursement experience. In one practice we visited, a physician performed a high volume of services with fees set at twice the market reimbursement level, while his partner specialized in a procedure that was priced at five times the market reimbursement rate. Both services were paid at approximately the same amounts by insurance carriers, but one physician earned greater credit for his gross charges.

Net collections

Many groups use net collections as a primary productivity measure because it’s the figure that makes a difference when paying overhead expenses and physician compensation. What matters, really, is what you’ve been able to bring in to the practice: what actually got collected.

If you use net collections as a productivity measurement, physicians may feel a greater incentive to submit charges in a timely manner, because they must be paid to get credit for their work. Similarly, physicians using this method are often more motivated to pay attention to billing details, such as whether referrals are secured before visits, and whether patients pay their copays at the time of service, because these factors make a difference in total collections.

The greatest drawback when using net collections as a primary benchmark is the fact that payer mix variations can skew comparisons within a group. If one physician sees more low-paying insurance plans, or has a lower-paying service mix, that individual’s productivity may appear lower than his or her peers.

For example, pediatric subspecialists experience a larger volume of Medicaid patients than their peers treating adults. Similarly, in one practice we visited, a contracted insurance plan paid most orthopedic codes at 150 percent of the Medicare allowable, but set rates for hand surgery at 95 percent of Medicare. If net collections were used as the sole productivity measure in that group, the hand surgeon would find it difficult to appear as productive as her colleagues.