Instead of trying to understand all of the financial markers each month, why not select one number to focus on and use that number as your barometer for your practice.
Most likely you do not have an MBA or any type of degree in business administration. When it comes time to look at the financial health of your practice, I bet part of you cringes thinking about the “numbers” and the data you have to evaluate. Well, I know that’s true for me.
Instead of trying to understand all of the financial markers each month, why not select one number to focus on and use that number as your barometer for your practice. Because in reality, there is not one financial marker that truly defines your practice - rather it is your perception of these numbers that drives you within your practice.
Here are some examples of different markers you could choose to focus on:
1. Number of new patients per month/ week: If your goal is growth, why not look at how many new patients you saw each week of the month? You do keep track of who is a new patient, correct? This one marker can tell you how well you are growing from a month-to-month perspective. You will know that your practice is doing well as long as your number of new patients increases
2. Number patients seen per day: Maybe you have already figured it out that you need to see 18 patients in a day to break even. Now instead of looking at all the different financial markers you can just look and see how many patients you saw each day and you will know the health of your practice from that number alone.
3. End-of-day cash collected: If you submit insurance claims, then it is likely difficult to get a grasp on how much revenue you are making on a day-to-day basis. So what if instead of worrying about days for claims to pay, you just focused on how much cash you collected each day? This would include co-pays, co-insurance, and cash from items you sold in your office (supplements, lab tests, prescriptions, etc.)
These are just three different numbers to focus on, but I bet these are a heck of a lot easier than pulling out the monthly financial reports that you are used to.
I am big believer in simplifying the process and feel that evaluation of your financials is one more area where you can keep it simple.
Remember, there are no hard and fast rules for how to run a successful practice, and in fact, the more you individualize your own approach, the more success you will have.
Find out more about Craig Koniver and our other Practice Notes bloggers.