In the best of all worlds, physicians, whether in solo or group practice, would have the time to solve practice problems before they get big enough to have an impact on over-all performance. However, experience tells us otherwise. Physicians have little time to dedicate to business matters.
For this reason, they tend to look at the practice globally and aren’t quick to identify signs of trouble. Most physicians are not even sure what danger signs to look for, let alone know what actions will bring a defined resolution. As a result, you are sometimes blind-sided with a sudden deterioration in the practice’s performance. Here are seven telltale signs that your vein practice is headed for trouble.
- A change in accounts receivable trends. Each month, prepare and update graphs that show you the numbers and trends of (1) charges, (2) adjustments, (3) receipts and (4) accounts receivable. When you see a sudden jump or decline that is not predictable, there may be trouble on the horizon. For example, a sudden increase in adjustments may be an indication that accounts are not being followed-up or perhaps someone is being indiscreet in what they write off. If accounts are shifting into the 90+ day aging, there may be a problem with lag time in submitting billings or perhaps one of the high volume third party (insurance) payers has become delinquent.
- Increased overtime. If overtime costs are suddenly rising, your Practice Administrator needs to justify the reasons why. It may be understandable if you just added a new physician or are going through an EMR upgrade. However, if everything in the practice is running its normal course, overtime hours should be stable and very limited. Sudden increases in overtime can mean something is wrong with your systems, procedures or staffing. It could be due to high absenteeism, which in itself can be an indicator of a bigger problem.
- Rising overhead. If overhead is rising, it’s a sure sign of a loss of control issue. It is likely to be a combination of poor systems, lower productivity and poor financial management. It won’t go away by itself, so dig deeper and gain a better understanding of the problems. You can start by calling your accountant, but a more detailed overview of the entire practice will require the assistance of a practice management consultant.
- Dissatisfied patients or staff. When patients start to complain about how they are treated or the inability to schedule appointments, it is time to start asking questions. If you have employees with an “attitude” perhaps it is coming from the top. Staff will generally emulate the attitude and behavior they are experiencing. If you are not there to solve their problems, they will not attempt to solve the patient’s problems or meet their needs.
One obvious indicator of employee dissatisfaction is an increase in turnover. If you are experiencing out of norm staff attrition, it is likely that something is wrong in your workplace. It could be unrealistic expectations, poor management or an inability to develop an atmosphere where people feel important and are proud of their accomplishments.
- Poorly managed appointment schedule. Too often, physicians take it for granted that there will be an occasional no show and they will sometimes run behind. But if this is a pattern, not an exception, something is wrong. It may be a lack of well-designed scheduling templates, overbooking, or not predicting or allotting enough time for EVLA and/or Sclerotherapy procedures. It may also be an indication that patient demands are greater than you are able to meet without compromising patient satisfaction. If you have “no shows” your productivity will suffer and the cost will mount rapidly. These issues can be resolved with a little effort, planning and a true commitment to take corrective action.
- Late charges. When you are signing off on accounts payables, review the invoices to see if bills are being paid on time. If you see late charges, it may be an indication that revenue is dropping. This could be for a variety of reasons, such as a poor performing third party payer, lack of your Practice Administrator’s attention or a physician that has taken more time off than usual. At any rate, you need to explore this and make sure it does not affect the timeliness of paying your bills.
- Inconsistent reporting. It is important to review each prior month’s performance and examine any indicators that affect your current or future competitive position in your service area. If suddenly your Practice Administrator isn’t giving you good solid information about the practice’s performance each month, don’t let it slide by. She or he may not see this as a priority or may be attempting to avoid delivering unpleasant news about the practice. Whatever the reason, you need to get a handle on it and demand practice performance reports each month, within (3) days of the month-end close. These reports should be reviewed with the Practice Manager immediately after each month-end close.
What type of reports should you be reviewing? Start by requiring your Practice Administrator to distribute month-end reports to all providers in the practice. Standard reports include monthly and year-to-date production activity (charges, receipts and adjustments by provider), accounts receivable performance and aging reports, overhead analysis, and a summary of patients referred by key referral physicians.
In less than two hours a month, physicians and their Practice Administrators can review practice performance and make data-driven decisions that are prudent for the over-all stability and growth of the practice. If you aren’t doing this now, it’s time to get started. If you are experiencing any of these signs of trouble, start investigating the causes now. Begin by working with the practice administrator. She or he can provide insight and may help you understand the reason for the problems.
In addition, physicians and the Practice Administrator may be able to formulate a plan to resolve the problems. However, if the problems seem to require more aggressive action, you may want to turn to outside advisors. You can obtain an unbiased report of the practice performance by hiring a practice management consultant to conduct a practice assessment. The consultant will look at major aspects of the practice by reviewing reports, conducting an on-site assessment and examining systems, procedures and the culture of the practice. The costs will vary, depending on whom you hire and how extensive a survey is conducted. Such an assessment provides an excellent base line to guide you in setting and achieving benchmarks for improvement.David Schmiege is the president and CEO of Vein Specialists of America Ltd., a practice management consulting and advisory firm. Please direct any questions you may have for Schmiege to 630-789-3636 or e-mail him at [email protected].