We hear a lot these days about best-practices, benchmarks and key performance indicators, but what does it really take to be a better-performing practice?
It starts with developing your own report card. Determine what key performance indicators you want to follow. Here are some standard industry measures:
- Total accounts receivable (A/R) and days in A/R (DAR)
- Percentage of A/R over 120 days
- Percentage of insurance contract adjustments
- Collection ratio as a percentage of charges minus contract adjustments
- Income and expense as a percentage of revenue
- Staffing costs as a percentage of revenue
- Number of full-time equivalent employees (FTEs) based on 40 hour work week
- Number of new patient visits and established patient visits
Next, Review your data and past performance history. Prepare your calculations based on per FTE provider number. Compare this year’s practice performance to the same time last year. Also compare your figures to national data from MGMA’s Cost Survey, http://www.mgma.com/ and NSCHBC’s statistical report, http://www.nschbc.com/ for your specialty. Some of the national data represents the average among all the sampling practices – that is the 50% mark, so this should only be a base. Shoot be in the top 10% to be a best-practice.
Now set improvement goals where you are not in top 10%, increasing your goal each year until you reach the mark.
If your performance with these key indicators is already at the best-practice level, expand the tracking to include other indicators that compare your performance in these suggested areas:
- Indicator: Goal
- Low turnover: Rolling three year average under 15%
- Staff over-time pay: Less than 3 hours per provider each week
- Patient wait time: Less than 15 minutes
- Claims error rate: Less than 3%
- Collection at time of service: 90%
- Missed appointments: Less than 5%
Now you’ll have some real tools to work with – so start tracking! If you need help, call on a consultant in your area.
Judy Capko is one of America’s leading practice management and marketing consultants, and author of the runaway top-selling book: Secrets of the Best-Run Practices. https://www.capko.com/
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