Today’s increasingly value-oriented market is putting more pressure than ever on physician practice leaders to streamline workflows and control costs in care delivery. Investing in practice assessment can help stakeholders uncover underlying problems that may be holding their practice back in the pivot to value-based care.
Many existing tools and processes have been developed — or perhaps more accurately, cobbled together — over the years, with little time for busy administrators and clinicians to stop and consider how to do things better.
To maintain viability under pay-for-performance models, practices should make operational efficiency a top priority, especially smaller practices that prefer to maintain independence while competing with larger or hospital-affiliated counterparts with access to more resources.
There are five key assessment areas that practice administrators can focus on to improve cash flow; reduce staff stress and turnover; and improve patient satisfaction, loyalty and outcomes.
1. Market analysis
Market analysis is a critical step toward any business’ financial success. Start by using patient origin data to define the current service area. Conduct a market assessment of population statistics and projections by age group. Medicare or other health plans can provide delimited data on patients in the area by disease state, hospital length of stay and other factors. This data helps when considering how changing demographics may affect your practice and its future service line offerings.
2. Competitive analysis
Consumer choice is generating competition in local markets. Benchmarking is an important tool for understanding how your practice performance compares to your competitors’ in the defined service area, regionally and nationally. MGMA offers medical practice comparative benchmark tools that can support competitive evaluation of staffing, wages, overhead expenses, revenue and patient flow. Calculate the ratio of staff members and their salaries to providers and compare this to appropriate benchmarks. This helps identify areas where your practice may be overspending or overstaffing compared to similar practices in the same specialty. Comparative data can also shed light on areas where your practice may potentially gain a competitive, sustainable advantage.
3. Workflow assessment
From making the most effective use of practice time to creating the best patient experience, optimal flow of the office is essential to success. Document workflows to help illuminate areas that can be improved by optimizing processes or technical resources, providing staff training or reassigning work. Have employees complete a strength, weakness, opportunity, threat (SWOT) analysis to glean insight into office roles. Gather feedback from those on the front line, especially regarding tasks that a provider may not see, such as the efficiency of the scheduling process.
Evaluate the responsibilities of the front-desk employees. Are staff members up to learning new tasks and tools such as electronic check-in, preauthorization and upfront collection of patient copays and deductibles? The growing movement of migrating back-office functions to the front can dramatically affect cash flow, improving collections and lowering days in accounts receivable (A/R).
4. Revenue cycle review
Financial analysis is an essential part of any medical practice assessment. Financial metrics should include, but are not limited to:
- Total charges and collections by provider
- Gross and net collection percentages
- Charges and collections per visit
- Average number of days bills sit in short- and long-term A/R
Review these metrics routinely to identify and eliminate error patterns in the billing department or between internal billing staff and external billing service providers. Further, each quarter, revisit the reimbursement schedule for your practice’s top CPT codes from top insurance payers to ensure payments are accurate and received in a timely manner, all in alignment with — or perhaps better than — industry benchmarks.
5. Practice culture considerations
Though difficult to measure, don’t ignore the culture of your practice as a success factor for a business providing consumer services. According to CompData’s BenchmarkPro 2016 Survey, the U.S. healthcare industry saw a 15.3% voluntary turnover rate in 2016, up from 14.4% the previous year. Leadership’s ability to recruit and retain top talent has a direct effect on workplace productivity and the overall atmosphere of a practice. Practice culture influences employee morale, which, in turn, affects patient perception of a practice. Online reviews and word of mouth influence patient engagement with your practice. Patient satisfaction also factors into reimbursement under some quality reporting programs.
Practice assessments help healthcare organizations tell the story of their value proposition and differentiation to health plans and to new and existing patients. Conducting a comprehensive practice “checkup” annually or biennially, with periodic touch points to confirm your practice is on track, can keep your medical group — and its financial bottom line — in good health.