There is no doubt you are an exceptional provider! I am sure you have the state of the art training and your bedside manner keeps the patients coming back. Is exceptional skill and the best customer service enough to run a medical or dental practice? The truth, no it is not. Being a wonderful provider is only half of what it takes to run a successful practice. The rest is business. One of the key components to business management is knowing your practice numbers. You need baseline measurements, measurable goals, and measurements of progress.
A few measurements to look at:
Profit per visit: How much do you earn, on average, for each patient visit. After all associated costs of doing business are deducted. This can help you set your fees, evaluate insurance reimbursement, and manage practice expenses.
Revenue per month: How much are you collecting in any given month? This is not what you billed or produced. This is how much money went into your bank account. This helps you evaluate the effectiveness of your billing process and your collection policy.
Revenue per provider: Remember, even if a provider sees less patients than other, they may generate more revenue per patient. This number can help you evaluate your scheduling process, provider time management, and patient engagement/activation practice.
Daily Sales Outstanding (DSO): The average time it takes for your practice to collect payment. For Fee-for-Service offices, you want this number to be close to zero. For Dental you want this number to be under 35 days. 20 days is ideal. For Medical (insurance) you want this number to be under 45 days.
Percent of Account Receivables over 90 days: Goal 6-10%.
Insurance denial or resubmission requests: This measures the effectiveness of your insurance billing systems. Insurance management takes time. You pay someone to manage the insurance in your practice. If they are spending all their time resubmitting claims or contacting patients because the insurance was denied, you are paying them to do the job twice. Goal: less than 2%.
Customer Acquisition Cost (CAC): This is an important measure of your marketing efforts. If your marketing costs consistently exceed the revenue generated by new business, you marketing plan needs to change. Ideally, the CAC should be as low as possible.
Open time: What is the percentage of unscheduled time? This can indicate a no show / cancellation issue or a patient flow issue. It can also show scheduling issues or communication and follow up issues.
New Patient Conversion: How many of your potential new patient calls convert? How many of your treatment / procedure consults accept the proposal and schedule their visit? This measure will show you how effective your efforts are!
These are some of the practice numbers we use to evaluate the health of a practice. Knowing your numbers allows you to evaluate the systems and processes within the practice.
Of course, there are many other numbers to look at. But the above nine items can help to evaluate where you are, set goals for improvement, and measure your accomplishments.
Shanalee Ackerman, RDH, MBA, is founder and CEO of Ackerman Practice Management, a consulting firm that specializes in medical and dental practice management and compliance. She can be reached at Shana@AckermanMgmt.com or by visiting www.AckermanPracticeManagement.com.