Medical Practice Management
Mar 06

Look for these symptoms when trying to diagnose poor practice financial performance

If your income statement's bottom line shows an unexpected poor performance, use other statement details to track down what happened. Like "classic" symptoms pointing you toward ordering specific medical tests for your patients, revenue and expense numbers serve as financial symptoms" indicating where to look for problems.

Investigate disappointing financial performance by first evaluating charges and collections using the following checklist:

When charges decrease, check for these changes first:
>> Changes in appointment scheduling
>> Dropping physician productivity
>> Referral sources change their patterns
>> Dissatisfied patients leave your practice

When collections decrease, examine these possibilities:
>> Shifting payor mix
>> Reimbursement level changes
>> Billing function/procedure changes (new billing staff, etc.)
>> Poor follow-up by collections staff

And when expenditures rise, consider these possibilities:
>> Review purchases for out-the-ordinary bills
>> Review internal spending controls
>> Staffing additions/changes
>> Increased benefit costs
>> Analyze staff size in relation to productivity

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →