Practice Management
By Pat O'Sullivan, President
MEASURING SUCCESS…..BENCHMARKING IS OUR REPORT CARD
We often receive calls asking….
“What is a reasonable salary for an Office Manager?”
“What should we expect for a gross collection percentage?”
“What should we pay our new Orthopedic Surgeon?”
In our office, we utilize benchmarking on a regular basis and the statistics are updated annually. We subscribe to associations and tap into regional resources so we are prepared for these questions and also measure our own success with our clients It is so important to use benchmarks as guidelines, otherwise how would we appropriately measure ourselves, the practice, staff, billing department and financial status against our peers?
For instance, the practice accountant may recommend that the salaries should not exceed 25% of gross revenue for the practice. If the accountant represents several medical practices, he/she may be drawing upon experience. However, if the accountant does not work with many medical practices, there may not be “good data” available.
It would benefit every medical practice, at least quarterly, to use benchmarks, specific to their specialty to measure:
- Gross charges
- Gross collection
- Days in A/R
- Percentage of receivables over 90 days
- Overhead
- Denial rates
Where do we obtain specialty specific benchmarks? There are several options, for instance, many accounting and law firms purchase the statistical reports. Check with the practice advisors (attorneys, accountants, consultants) Another option, if the practice participates in a physician sponsored organization, for instance, PHO, the cost of the data could be spread out over the membership. Sharing the expense with colleagues in different specialties is also economical. Depending on the source, the average cost for the data is approximately $300.00 per year.
|
