If not knowing how your practice is doing overall keeps you awake at night, it's time to start monitoring eight simple metrics for measure.
Do you have 15 extra minutes per month? Fifteen minutes is really all it takes for you to grab a quick snapshot of how your practice is doing and managing. I often talk about how you can make sure claims go out clean, manage your staff, develop processes and procedures, etc. But now that you have all of those items in place, how do you know if it's working?
There are eight areas that you can toss into a simple spreadsheet and monitor on a monthly basis. They are as follows:
• Patient Visits
If you have low patient visits, consider the time of year. Is it normal for your practice, during certain months, for visits to drop off? If the answer is yes, great. You have identified a trend. If the answer is no, then maybe some marketing is due. Patient visits equate into revenue, so keep an eye on those.
• Monthly Charges (sales)
Along with the patient visits are your monthly charges. Do you have a physician, physician assistant, or nurse that continuously under codes? Review those charges from time to time to keep those in check.
• Monthly Inflow
Do you know how much money is being deposited on a monthly basis? You should. Keeping track of not just insurance payments, but patient payments via statements and copays is critical information for you to have.
• Average Charge per Visit and Pay per Visit
This also helps you keep track of under performers at your practice. The average charge per visit and pay per visit are great pieces of information to have to set a standard. If you fall below this average on any given visit, it is a good idea to investigate why.
• Adjustment per Visit
Along with the charge and pay per visits, the adjustment per visit is critical in determining if you have to write off balances due to denials or bad claims. This number should remain very consistent since, ideally, the only adjustments you ever want to make (or have to) are due to contract obligations.
• Patient Balance
This is so important to keep under control. As with your entire payer mix (insurance contracts) there should never be a high accounts receivable balance in any given class (insurance type). It's really a good idea to not carry patient balances on your books for more than 90 days. If you have patient balances over this timeframe, find out why.
• Accounts Receivable (A/R)
This is what you are due from the insurance companies and patients you are sending statements to. This is what I call the "industry standard graph." Take an average of three months of your charges and multiply that by 1.5. If you are below that, you're doing okay. If you are above that, drop the lifeboat and don't forget the paddles.
• Days Sales Outstanding (DSO)
This is probably one of the most critical pieces of information you need to obtain in order to run your practice. This helps you budget your inflow and expenses. This basically means from the date the patient came in for their appointment to the date you are paid and the monies are posted into your system. This is calculated by taking you’re A/R at the end of the closed month and dividing it by the charges at the end of the same closed month. You then take that number and multiply it by the calendar days in the same month.
Looking at these eight specific areas will give you a monthly snapshot of how your practice is doing and living. If you find you don't like what you are seeing, time to make some changes!