Part of ensuring smooth and profitable workflow involves consistently examining the overall “health” of a medical practice.
Healthcare industry solutions generator Medical Group Management Association (MGMA) offers strategies for measuring a practice’s vitality to maximize growth and performance. According to Ron Holder, MGMA COO, productivity does not have an absolute limit, and it cannot be accurately measured by relying on isolated statistics. Evaluating practice productivity depends on the expectations of each particular medical practice. Holder urges physicians to bear in mind that productivity can be influenced by negative factors like low staff numbers and excess patient loads. As such, determining a practice’s success should depend on more than simply meeting productivity goals, and it should draw from numerous indices to form a holistic assessment.
Review Essential Performance Indicators from the Previous Year
Certain metrics are crucial when it comes to benchmarking medical practice data, Holder says. One key metric is the prior year’s practice-level performance. Holder suggests that simply measuring this metric as a benchmark reflecting a practice’s success or failure is not an effective strategy, as doing so may not be an “apples to apples” comparison. Rather, he advises going over essential performance indicators like the previous year’s patient volumes and practice revenue in order to measure this metric.
Another important metric is the prior year’s provider-level performance. Like the aforementioned practice-level metric, provider-level performance can be measured via factors like patient volumes and practice revenue. In addition, this metric considers the arrivals and departures of physicians. Support staff and infrastructure changes may affect provider-level performance.
Revenue Should be Examined Each Month and Quarter
For instance, providers whose longtime staff members abruptly leave or decide to retire may struggle to function with productivity equal to that of the prior year. The comings and goings of new patients and follow-up patients also serves as an important metric for any medical practice. A thriving practice should consist of a balance of both patient genres.
Holder also values budget as a crucial metric. In order to maximize revenue, he suggests examining a practice’s revenue each month and at each quarter. If a practice has the necessary budget to meet productivity, this may be a valuable predictor of the practice’s financial performance, especially if elements other than productivity were correctly projected. Holder urges physicians to bear in mind that factors like efficiency, productivity and general operational success must be considered when determining the effectiveness of a practice’s budget. For example, a practice may realize its productivity budget might not be in a good place if it had to significantly increases expenses beyond the budget to get there.
As a general launching point, Holder advocates benchmarks like analyzing and comparing a practice’s efficiency stats, year-over-year financials, and operational data. Employing these types of benchmarks can serve quite useful in trying to decide what a practice needs to accomplish, as well as what it is capable of accomplishing. In examining a practice’s metrics and creating effective benchmarks, physicians can gain an excellent perspective of their practice’s health and functional wellbeing.