Look for these symptoms when trying to diagnose poor 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 the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.