Benchmarking is a term that has been around for several years. Quite simply, it is comparing your practice performance to that of other practices, especially best in class practices, to determine how to improve operations, financials and processes to maximize practice efforts.
What to benchmark and how to use the information is key to your success. The availability of data within your practice management systems is virtually limitless and while all data elements are important; some are of greater priority than others. Sources of benchmarking data could be other practices or organizations like MGMA. Each specialty has organizations as well that may provide your practice with specialty specific information.
Any analysis and comparison must be an apples to apples approach. Comparing a 350 doc practice to a 6 doc practice is really not useful. Being specific is quite useful. A methodical approach is needed to match accurate data and form conclusions. By starting off with business office performance data, you will quickly get to the heart of revenue cycle data that is the life blood of every practice.
- Days in AR
- Aging by financial class
- denials by type
- number of employees needed to work accounts receivables
- average charges/reimbursements
- lag days of charges
- working of credit balances report
- what reports most useful in resolving aging
- average pay for employees
These reports if compared to like practices can quickly achieve a “where we stand” look at your practice business office processes. Now the question is what do you do after your ranking is confirmed? Some deficits can be quickly and easily addressed….lag days for example. Knowing what the average lag days for charges by specialty is can result is a more closely monitored process for getting charges into the system. What is causing the delay? How can you improve the number of days? By systematically documenting the current process, flaws in the system will become glaringly apparent and “fixing” the problem a simple matter. Often times, processes are a result of tradition or rules made in reaction to circumstances that have never been re-examined. Periodic asking….why do we do it this way? can result in positive change and improve your benchmark standing.
The goal of benchmarking is not to point fingers at problems…..but to resolve issues that are impeding optimal cash flow. Improvement in processes and operations may require change management skills…..but if everyone understands that cash flow is imperative to the practice…..then better cooperation can be achieved.
Start by simply doing a search of benchmarking data that is comparable to your size and specialty and geographical location. Pick something straightforward and easy to measure…….show the results of this effort. This success will lead to more and more detailed benchmarking and greater success of the practice.