More than likely, adding benchmarking to your independent practice has been on your to-do list for quite some time. It’s now more important than ever to measure the key financial metrics of your practice. No matter how large or small your independent practice, finding areas to improve makes for a happier and more efficient practice for you, your staff and your patients. Practice benchmarking is useful to keep your practice operationally healthy, giving you the needed confidence in your practice’s performance, which in turn means you can concentrate your efforts on patient care.
The most efficient method to save time while implementing benchmarking is to automate your practice. The right cloud-based practice management system allows you to keep your finger on the pulse of your practice, which will help you gain a much better understanding of how to improve your practice finances and operations. The bottom line to investing in benchmarking, just as with investing in other good practice management behavior, is a smoother running, more profitable, higher-quality and less stressful practice. These conditions make it easier to do what you entered medicine to do: deliver great patient care.
Step #2: Important factors to remember.
What benchmarking is not
As you begin to implement benchmarking into your practice, there is one important fact to remember: A reduction in cost does not equal improved efficiency. Unfortunately, a lack of efficiency equates to lower quality of service.
According to Matthew Burrows, “Efficiency isn’t just about reducing costs; other business objectives, including service quality, still have to be achieved in order to keep existing customers and revenue. Many organizations are too concerned with costs and are not aware that the real business value can be destroyed if approached purely as a cost-cutting exercise.”1 Burrows continues, “Efficiency is a measure of whether the right amount of resources have been used to deliver a process, service or activity. An efficient process achieves its objectives with the minimum amount of time, money, people or other resources.”2
Likewise, according to Professor Yaseen Hayajneh, “Efficiency is the ratio of the output to the inputs of any system. An efficient system or person is one who achieves higher levels of performance (outcome, output) relative to the inputs (resources, time, money) consumed.3
Drive operational and financial changes
Consolidation of small practices into hospitals and larger physician groups, along with their hefty budgets and internal analysts to manage all big data analytics, make it tough to compete. As an owner of a small practice, you may feel you have a good grasp on how your practice is doing, however, doctors who use benchmarking have a true understanding of what it means to drive operational and financial changes. They no longer rely on educated guesses to understand the many aspects of their practice. Benchmarking is a means of using metrics to compare your business processes and performance, but benchmarks need to be measured against the proper context, to compare against practices of similar size, specialty and geography.
The next step will further define benchmarking and describe the types of reports you can run to drive major improvements within your practice.
The experts at AdvancedMD have the solutions you need to boost revenue through benchmarking. We offer solutions to help you succeed by systematically implementing each tip mentioned in this guide and helping you along the way.
Our most accurate way to compare your financial performance to peers in your geography & specialty.
An entirely new way to measure, manage & control financial performance
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