Is it time for a checkup? Whether your practice is healthy or in operational pain, a physician practice assessment can uncover the underlying problems that are holding your practice back. Long before “big data” and “analytics” were buzz words in the healthcare industry, physician practices have been using comparative metrics to evaluate performance and plan for necessary changes.
Conducting a competitive analysis is a critical step toward the financial success of any business. Physician practices are prime environments for applying the concept of continuous improvement process, which is an ongoing effort to improve the products, services or methods that an organization uses to achieve increased efficiency and effectiveness. The cycle begins with an assessment of the current state of the practice while taking a look at the market, operations, financials and culture.
1. Evaluate the Market
It is important to get an objective view of your practice in the marketplace, in comparison to other similar practices. Start by using your patient origin data to define the current service area. Then graphically map out your practice and service area along with those of your competition. Additionally, include other elements such as the drive time radius or use ZIP codes to conduct a market assessment of population statistics and projections by age group. This information can be helpful when considering how future changes in demographics may impact the practice.
2. Assess Practice Workflows
Efficient workflows do not just happen. They are earned. From the most effective use of your time to creating the best patient experience, the flow of your office is essential to practice success. Document processes for each functional area of the practice. What are the responsibilities of the front desk staff? Are certain individuals responsible for certain tasks? Are individuals appropriately cross trained? The process of documenting workflows can in and of itself shed light on which areas can be improved by reassigning work or providing staff training.
Additionally, having key employees in different departments complete a SWOT or Strength/Weakness/Opportunity/Threat analysis often provides insight regarding office roles. Also, feedback from those on the frontline can prove invaluable, especially regarding tasks that a provider may not see, such as the efficiency of the scheduling process.
3. Compare Your Practice Against Industry Benchmarks
Benchmarking is the process of comparing a practice’s performance against external standards. It is an important tool to use when trying to understand how a practice’s performance compares to others, either locally or nationally.
The Medical Group Management Association, or MGMA, is the go-to source for comparative benchmarks for physician practices such as staffing, wages, overhead expenses, revenue and patient flow. Practices should calculate the ratio of staff members and their salaries to providers, and compare this against appropriate benchmarks. This information helps identify areas where the practice may be overspending or over-staffing as compared to similar practices in their specialty.
4. Examine Your Financials
A healthy practice needs a healthy revenue stream. This means that a proper analysis of your finances is in order with any physician practice assessment. Financial metrics that should be included are the total charges and collections by provider, gross and net collection percentages, charges and collections per visit, and the number of days that bills sit in accounts receivable. These metrics help identify and eliminate mistakes in your billing department, and establish your profitability. Further, the reimbursement schedule for your top CPT codes from your top health insurance payers should be revisited quarterly to ensure payments are accurate and received in a timely fashion.
5. Consider Your Culture
The culture of a practice is sometimes the most difficult item to measure, however, it should not be ignored. Your ability to retain top talent and cultivate a friendly, family feel is what creates an enviable workplace and patient-focused atmosphere.
Additionally, conducting research online and through social media can provide insight into perceptions of the physician practice. This may include developing formal patient satisfaction surveys to gain vital feedback about staff and providers to help address areas of growth.
Although time consuming, a full practice assessment can be invaluable in providing a balanced view of internal and external factors impacting the practice. By selecting meaningful metrics and appropriate benchmarking numbers, practices can begin to make strategic improvements to the operational areas that will most impact the practice.
Content written on behalf of R1 RCM.