Yippee another year is over and we are ready to start a fresh one. Your front desk has been running end of the year reports so you now have a one inch stack of paper on your desk, which you immediately put into your file cabinet also known as the black hole. Instead of “filing” the reports let’s take a look at them and plan for the next year.
PROFIT & LOSS STATEMENT (with expenses as a percentage of income):
Run this for last year and for this year, in many programs you can set this up to do the comparison for you. In order to have a healthy practice you need to know what these numbers mean and look to see if there have been any significant changes in the percentages from one year to another. Are they healthy changes??
PRODUCTION: (Production – Adjustments = NET Production)
How do the practice production numbers look in comparison to last year’s numbers? Have they gone up, down or stayed the same? If they have gone down or stayed the same it’s time to look at why this is happening.
• Increased – As long as you are growing at a nice rate, keep up the good work!
• Down – There may be a reason such as working fewer days; but the important thing is to find the reason and correct it before you have another down year.
• Stays the same – Unfortunately, expenses have gone up during the year, so staying the same is also something that needs to be investigated and corrected.
COLLECTIONS: (Collections – Adjustments = NET Collections)
• Are collections up or down from last year?- This is a direct correlation to production
• Are net collections 98+% of net production? – If not, the front desk is not collecting as they should be, or your collections policies need to be redefined.
TREATMENT CONVERSION:
This is very likely one of the most important numbers in your practice – it tells you how much you have treatment planned for the year, but more importantly how much of this treatment has been completed. If this number is not in the 70% or higher range, then there is work to do on treatment presentation…….from the clinical staff to the front desk.
NEW PATIENT – REFERRAL REPORT:
How many new patients did you see this year compared to last year? Where are these patients coming from…… google search, direct marketing, insurance website? Is your staff tracking this all important information? It is vital you know where your marketing dollars are being used the most effectively in order to make marketing decisions for the new year.
ACCOUNTS RECEIVABLE:
How much of your AR is outstanding at 30, 60 or 90 days? Is your total A/R equal to or less than your average production for 1 – 1.5 months? If it is more ( or very much less) then there is a problem.
OUTSTANDING INSURANCE REPORT:
Insurance companies have to pay, decline or ask for more information within 30 days or less of receiving a claim. This report shows you what insurance is outstanding. There should be nothing over 60 days, unless it is secondary insurance. Insurance companies have a filing deadline of 6 months to 1 year, Medicaid has a filing deadline of 90 days! Some practice management software programs even have a report to run that shows if all of the insurance claims have been processed……great one to check. It’s important to make plans and set goals for the New Year, but that’s hard to do if you don’t look at past history and make course corrections. Make it your goal in 2014 to look at these reports monthly at end of month, and make corrections early so that the minor situations existing today don’t become major problems tomorrow.
