PRACTICE MANAGEMENT LAB: Start Your Practice's Overhaul Here

February 1, 2006
Diane Kaye

This new column will give you the tools you need to diagnose and solve your office's problems. First up: Are you a high performer?


Lab results help you diagnose and solve clinical problems. Wouldn’t it be nice to have the same proven tests, benchmarks, and solutions for management problems?

You got it.

Welcome to the Practice Management Lab, a series of columns we’ll run in 2006 that will give you tools to diagnose your practice management problems and offer solutions. In this space each month you’ll find the specific metrics and real-world benchmarks you need to understand how you stack up.

Starting with this issue, we’ll examine practice performance data collected by my company - athenahealth, a provider of revenue cycle management solutions. We’ve been collecting data for six years from thousands of our physician practice clients across the country. In Management Lab, we want to share that data - the most comprehensive set of performance benchmarks available from some 40 specialties and across 33 states - with you.

But Management Lab is about more than simple benchmarks. We’ll also present solutions that work. Years of trial, error, success, and measurement have yielded a proven framework for measuring and improving practice performance. We call it the Unified Theory.

The Unified Theory

With apologies to Dr. Einstein, our Unified Theory of practice management is similar to his in that it describes the universe of phenomena that affect your practice’s fiscal performance, and is supported by all known empirical data. In other words, it is the set of things that has been shown to impact performance explained within a framework that allows you to understand how and where to focus your improvement efforts.

There are three distinct “sections” within this universe: operations, performance management, and strategy.

We will give you metrics, benchmarks, and best practices for specific areas to improve your performance, like eligibility checking, averting claim denials, and setting appropriate staffing levels.

This isn’t some abstract improvement diet - the suggestions we’ll make are based on proven outcomes.

Get started

Visit the Physician’s Practice Management Lab section of athenahealth.com to see how your practice compares to similar groups (click on the icon on the home page). You will find a simple diagnostic tool that will capture a few key data points on your practice and its current performance. The tool will then run your data against the athenaNet Database and show how you stack up in a few key areas.

Whether you use the online tools or just compare yourself to the charts provided here, the goal will be to move your practice toward the “high performer” category, the characteristics of which are described below. The revenue adds up fast as you move toward higher performance, because they:

  • Adhere consistently to operational best practices.

  • Hire and train the right staff.

  • Create clear roles and responsibilities.

  • Know and manage to results (including productivity).

  • Create a culture of teamwork and accountability, including hands-on management.

  • Examine and answer the tough questions.

So what are these best practices that produce better results? To give you some examples, the following are a few tidbits that we’ve learned:

For every day a claim goes unentered (and thereby not submitted to a payer), it loses an average of 0.6 percent of its value. Thus, claims should be entered within 24 hours of service for office visits and within two to three days for surgical and hospital based claims. (see chart above)


Up to 4 percent of charges each month are considered “paid” by an insurer, but at zero dollars - which of course means that the insurance company did not pay the charge. We’ve found that 70 percent of these “zero-pay” claims can be successfully appealed.

Claims denied for eligibility related reasons (e.g., service not covered, wrong insurer, patient demographic issues), take 20 to 50 days longer to pay than clean claims. Eligibility checking is critical to your cash flow.

Over the next 12 months we will be covering a range of issues and specific areas to measure and improve, including pre-visit readiness, denials, self pays, staffing, schedule optimization, and strategic performance analysis and management.

Measure where you stand now by visiting www.athenahealth.com/diagnostic - and get ready for a transformation.

Diane Kaye is vice president of strategic initiatives at athenahealth. She can be reached at dkay@athenahealth.com or via editor@physicianspractice.com.

This article originally appeared in the February 2006 issue of Physicians Practice.