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Increase practice revenue through benchmarking, step 3 of 5
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 #3 Benchmarking defined.
You may wonder how else you can analyze your practice. Here are some examples: If your average days in A/R (accounts receivable) is 52, benchmarking can indicate how you compare to the average physician within your specialty at just 43 days. Not only does this show that you are a laggard compared to peers, but it also shows that you can achieve improvement by reducing days outstanding.
Benchmarking can also indicate whether your patient wait times need improvement for both same-day and future appointments. You can reduce coding errors, properly maximize reimbursement and see how many patient visits per day are the norm. Other operational and financial metrics include:
- Total RVUs
- Coding and claims efficiency
- Encounters per day
- Revenue cycle efficiency
- Drilldowns by state, region or nation
- Drilldown by specialty and practice size
- Physician compensation & hiring
- Operating expenses
- Most used CPT codes, appointment types & average time spent with patients
You’re used to applying scientific methods to patient care. It may not occur to you, however, that you can apply such methods to monitor the business side of your practice. Because of this lack of knowledge, many physicians never get around to establishing measures of performance within their practices. On the other hand, other physicians establish measures of performance, but don’t apply them to their practice. It’s a task that keeps getting put on the to-do list, either because you’re not sure how to do it, or most likely, because you just can’t find the time. Consequently, many physicians and their practice managers don’t know their costs of doing business, much less what those costs should be. Unless you’ve taken some corporate finance courses, you’ve never been taught how to properly measure practice performance and understand key performance indicators.
A healthier practice
Creating and maintaining benchmarking reports will take a little time and discipline on the part of your office manager (and possibly you). Long term, however, benchmarking is likely to result in a healthier practice and avoid many unnecessary problems. 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. Done right, such benchmarking will highlight problems, or catch the problems before they have a chance to become worse.
What exactly should you benchmark within your practice? Benchmarking is used to drive improvements in two categories: operational and financial.
The next step explains how to best drive operational and financial 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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