Healthcare Physicians: Building a “Practice Crash Cart”
The crash cart at your practice stands ready for all clinical emergencies. Just as you have protocols and prepare for a patient crisis, you also need to make sure your practice is ready to respond at a moment’s notice to the ever-changing healthcare environment. Legislation on the national and state level continues to reform the delivery of healthcare. New alliances are formed daily, with partnerships we would not have imagined even just two years ago. Private Equity is increasing its presence in healthcare, becoming the dominate force in anesthesia, dermatology, pediatrics and urgent care centers. All the while, technology is advancing at unprecedented rates.
To keep your practice relevant and equipped to stand the test of industry shifts, I recommend that you build a “Practice Crash Cart”. This cart will be a repository of data about your practice, your competition and the marketplace. This data will not only allow your practice to respond when change happens but will allow your practice to be proactive in tailoring how you will react to the change.
I recommend that your practice keep the following summary reports on an annual basis:
I. Monthly Financial Summary
Reference A is a sample report that is a 30,000-foot view of your practice with regards to charges, payments and adjustments on a monthly basis. Not only does it allow you to quickly spot trends or areas of concern, it also keeps vital practice data in an easy to retrieve and review report.
II. Key Statistics Report
Reference B is a report that drills down on your practice data to provide key statistics such as your practice collection ratio and collections per patient day. It also keeps track of new and recurring patient visits as well as the number of key procedures performed by your practice.
You can also use both reports – Monthly Financials & Key Statistics – to analyze specific areas of your practice and get more granular with your data. For instance, a multispecialty group can run these reports for specific specialties or by provider. They can also be run by payor, so that you spot trends or gaps before they become a significant issue.
In addition to these reports, be sure you have:
- All legal documents in one location and ensure the agreements are current
- Up-to-date payor contracts along with a summary of reimbursement for the top 20 procedures performed by your practice
- Current financial reports
- Current productivity reports, including the number of wRVUs for each provider
You should have a list of all the competitors in your geographic area. On a regular basis you should monitor what is happening with them, especially now when there is constant movement in
the industry. Have they joined a hospital alliance that might affect your referral patterns? Have they added a new specialty that will make their practice more attractive to patients?
You also want to keep track of national organizations to see if they are coming to your neighborhood, or if they are aligning with your competition.
Your practice should strengthen any relationships that are vital to the success of your practice to prevent your competition from stepping in. For instance, if your practice receives referrals from a primary care group, make sure you super please them by providing their patients with next day appointments as well as providing the referrer with timely patient notes.
There is nothing worse than being blind-sided by a change you didn’t see coming. The best way to avoid this is by understanding the market that you practice in. With this knowledge, you can look for opportunities or threats for your practice. Get key members of your management team involved to spread the workload.
To understand what is happening locally, consider joining your local medical society. To understand what is happening within your specialty, consider participating in the advocacy section of your specialty society. By getting involved, not only will you gather important information and resources for your practice, but you can also be a force of change.
By having this data accessible in your “Practice Crash Cart” your practice will be ready to respond when opportunities or threats arise. Opportunities include practice alignments, participation in new payor programs or offering new services. Threats include competitors opening an office around the corner, regulatory changes or decreasing reimbursement. This collection and review of data will also allow your practice to be proactive, as you will be able to take corrective action before negative trends become a reality.
SUSAN E. REED, CPA, CFP® is a Partner with Sax and is Head of the firm’s Healthcare Practice. Susan is turned to by medical and dental practices to provide innovative and tailored solutions to combat industry challenges and acts as an operational consultant for clients focusing on but not limited to physician practice assessment, physician compensation, practice succession, taxation, strategic business planning and new practice set up. Susan can be reached at [email protected]