In a previous post, we looked at three reports every practice should run to stay on top of financial performance and measure medical billing financials, the accounts receivable aging report, the payer mix ratio, and the gross and net collections ratio reports. However, there are 2 other metrics the Health 1 Centricity Medical Billing Service team run regularly to provide even more insight into your practice’s financial health. These reports can be adjusted for your particular practice and specialty, but the broader picture is useful for measuring your overall performance.
Accounts Receivable Per Full-Time Provider
Running a report comparing each provider’s outstanding accounts receivable with both the overall practice average and with other individual providers gives a meaningful look at how each doctor is performing. Aside from the obvious conclusions about patient load and complexity of services provided, this number can be tweaked to show aging, as well, giving you granular information about potential reimbursement issues. A provider with an aging imbalance compared to others in the group may have a problem with coding or inadequate documentation or inexperienced coders.
Another approach is to break out A/R and aging by payer to identify possible trouble spots with a particular carrier.
Average Revenue to Cost Ratio Per Patient
Typically the key to profit and a growing bottom line is increasing the number of patients in your practice who generate a lot of revenue at a relatively low cost. The best way to measure how your business is doing at attracting and retaining these highly desirable patients is to calculate:
- Your average revenue per patient (total revenue for the month divided by the total number of patient visits)
- Your average cost per patient (total practice overhead divided by total patient visits)
- Determine your average profit margin per patient.
Once you’ve calculated your “average” patient ratios, you’ve got a baseline number to evaluate individual patient groups:
- Patients enrolled in each insurance plan (multiply number of patient visits for each carrier by the average cost per patient and divide by the total monthly revenue for each insurance plan)
- Patients seen by each provider (multiple patient visits by average cost per patient and divide by provider’s monthly revenue)
- Patients seen in each location
- Patients meeting certain diagnostic criteria
- Patients by specific encounter types
The possibilities are endless and provide data about your most profitable patient groups, insurance plans, and procedures, as well as those that are loss leaders. This data is helpful in contract negotiations and marketing efforts.
The billing experts at Health 1 can help you identify the most meaningful metrics for your particular practice and show you how you compare to others in your specialty.
What Medical Billing Financials do you use? Comment below.