Practice Management Dashboard
from Practice Update, Fall 2006
By Elizabeth W. Woodcock, MBA, FACMPE, CPC
Develop a Monitoring System For Your Practice
You can get piles of reports from your practice management system, as well as those compiled by your accountant, billing manager and administrator. Although there is a tremendous amount of valuable data, it’s difficult and time consuming to wade through the reports to find meaning.
Consider the analogy to your car. What if you received data from your mechanic, gas station attendant and dealer? You’d be overwhelmed with information about emissions, oil supply, pistons and the hundreds of other parts that are used to operate your car. Instead of pouring through the data, we all rely on the car’s dashboard to not only drive the car on a daily basis, but to also alert us to a problem.
Similar to Your Car, Develop a Practice Management Dashboard
Establishing a practice management dashboard should be a priority for every physician who wants to monitor the practice but doesn’t have the time or energy every month to spend hours reviewing reports. Like a car dashboard, it won’t display every possible function, but just the important ones.
Your dashboard should include a measure of the following functions:
- Total collections
- Payer mix (percent of charges by major payer)
- Time of service collections
- Operating expenses, broken down by staff and non-staff
- Total accounts receivable (A/R)
- Days in A/R
- A/R over 120 days
- Net (adjusted) collection rate
- Unique patient encounters by site
- Work relative value units (RVUs)
- New patient visits as a percent of total appointments
- Days to next available new patient appointment
With these variables, establish ratios such as your overhead rate (operating expenses divided by total collections) and work RVUs by patient encounter.
If you practice out of more than one site, consider monitoring your productivity (i.e., patient encounters and work RVUs) and access (i.e., new patient visits as a percent of total appointments and days to next available new patient appointment) at each site.
If you have ancillary services, such as laboratory and imaging, choose several key measures to monitor for each service. At minimum, measure volume and revenue for each ancillary service you offer.
The practice dashboard should report the latest month’s information, along with historical data, such as where you where this time last year. A savvy manager will not only present the data each month, but will provide comments about any variances so physicians are kept informed and educated.
Consider developing the dashboard to alert you to problems, just as your car does when the gas is running low or the engine is overheated. You can eye the dashboard for problems, such as a 10 percent drop in collections, or you can develop a spreadsheet using “if/then” logic to color a spreadsheet cell red if the data drops below or above your pre-programmed benchmark to alert you like a warning light.
Although this is not a recommendation to throw away your current reports, a practice management dashboard can introduce efficiency and focus to busy physicians trying to manage a practice.
