The majority of a medical practice’s Key Performance Indicators (or KPIs) will address Health Care Accounting Processes that add to or take away from revenue. By focusing on KPIs, your practice increases practice efficiency and cash flow. Ultimately, you can see who or what is contributing to productivity and losses.
For example, a focus on Work Relative Value Units (wRVUs) per practitioner will show the true work output of each physician or practitioner — creating an opportunity for setting productivity goals. It can also pinpoint real barriers to productivity. Without the baseline measurement, however, you won’t know if practitioners need to boost productivity or if perhaps the practice is underpricing services. Tracking wRVUs can also tie into appropriate physician compensation measured against national benchmarks, and also if the practice needs to hire more staff to reduce the administrative burden on physicians.
Simplifying Health Care Accounting Processes
KPIs can bring to light operational inefficiencies that make a big difference on cash flow. Tracking “charge entry lag” can show how soon charges are entered into the system after the date of service. You can quickly see that a charge entry lag of even three days can lead to an increasing lag on A/R and cash flow over time.
Tracking patient encounters per day against “no show rates” can indicate a breakdown in the appointment reminder process — rather than assuming it’s a productivity issue. Tracking new patients as a percentage of total visits can indicate practice growth — or a need to increase marketing to new patients. Tracking denial rates by payors can indicate an issue with coding or perhaps a breakdown in the process of collecting accurate patient information at registration.
Best practices dictate that KPIs are reviewed weekly to help practices make improvements over the short-term. This diligence avoids long-term impact on profits. By the time quarterly financial reports come out, it is too late to make adjustments, and you have little more than a historical record to file under “missed opportunities.” Instead, identify the KPIs that are most important for your practice efficiency, and talk to your CPA and practice management software provider about the best ways to track them.
Cornwell Jackson’s Business Services Department offers a wide range of outsourced financial services to serve small to mid-sized medical and dental practices — including payroll outsourcing and solutions to improve cash flow and productivity. While you focus on care outcomes of your patients, we can address the business side of a healthy practice. Contact us for a consultation or click here to view our whitepaper on medical practice KPIs.
Scott Bates, CPA, is a partner in the audit practice and leads Cornwell Jackson’s Business Services Department, which includes a dedicated team for outsourced accounting, bookkeeping and payroll services. He provides consulting to clients in auto, healthcare, real estate, transportation, technology, service, retail and manufacturing and distribution.
Contact Scott at email@example.com or 972-202-8000.