Vital Signs: Use Benchmarking to Monitor Your Practice’s Health

Download PDF

In medicine, benchmarks are fre­quently used by physicians to accu­rately gauge the vital signs of their patients and properly treat them when the situation dictates it.

Similarly, practice management benchmarks can help you monitor the vitals of your ophthalmology practice and inform a treatment plan when areas of your business don’t fall within normal limits.

Know the Vital Signs of Practice Management

The Academy, in conjunction with the American Academy of Ophthalmic Executives (AAOE), provides a bench­marking tool called AcadeMetrics. Its ophthalmology-specific benchmarks enable practices to compare their finan­cial and patient flow indicators—in other words, their vital signs—against similar practices.

AcadeMetrics has 78 benchmarks. You can use AcadeMetrics to moni­tor dozens of metrics, including the following:  

• Overhead ratio, which judges how efficient a practice is in converting col­lections into cash for the owners
• Physician productivity ratios by subspecialty, which gauge whether a practice’s providers are seeing a typical number of patients and generating normal revenues
• Employee productivity ratios, which help you to understand whether the staffing levels are appropriate in various areas of the practice
• Accounts receivable ratios, which monitor billing staff’s effectiveness in collecting money owed to the practice
• Optical ratios, which analyze the profitability of a practice’s optical oper­ations (if it has an optical shop)

An ophthalmology-specific resource. Many of the 78 benchmarks are unique to the AcadeMetrics and are not pub­lished anywhere else. They will provide focused insight into your practice’s health.

GAIN SOME PERSPECTIVE. Compare your numbers on dozens of metrics—such as collections data (shown above)—against benchmarks based on similar practices.

Benchmarking Your Practice With AcadeMetrics

To access the benchmarks, you must first share your data. The resulting benchmarks and comparative reports will be available only to the practices that complete at least 50% of the AcadeMetrics Survey; the data won’t be avail­able for purchase by nonparticipants.

To access the benchmarks, fill out the survey. Each spring, ophthalmol­ogy practices start entering their data from the previous fiscal year into the AcadeMetrics Survey. This year, prac­tices could start entering their data in mid-April and must finish doing so by July 31.

New to AcadeMetrics? New practices can register at https://academetrics.aao.org/academetrics_signup.aspx.

Already using AcadeMetrics? Past AcadeMetrics Survey participants don’t need to sign up again; they can use the same login that they used in previous years at https://academetrics.aao.org/.

Make the most of AcadeMetrics. Once you submit your data, you will be able to start comparing your practice’s performance against the latest bench­marks. By participating in the Acade­Metrics Survey, you’ll be able to access detailed comparison reports that will help identify the specific strengths and weaknesses of your practice.

Maintain the data’s integrity. When you fill out the survey, it’s essential to enter the data accurately, as poor data diminish the value of the benchmark­ing information.

Your data are confidential. Other AcadeMetrics participants will not see your data. Identifiers specific to your practice will be stripped from the final dataset, and the reporting tools will only display datasets that include a sample size with a minimum of 10 par­ticipant submissions. (This minimum applies to both complete aggregated datasets and any filtered dataset.)

What does it cost? AcadeMetrics is free for Academy and AAOE members.

Benchmarking in Action: An Example

Knowing your key benchmarking fig­ures and how they compare to similar practices is important in identifying issues, as shown in this hypothetical example.

The problem. The owners of ABC Eye Care felt they were making less-than-average income for ophthalmol­ogists.

Identifying the cause. By comparing their practice data to the AcadeMetrics benchmarking data, they learned that their overhead ratio was too high. It also showed the leading cause of the high overhead ratio was that the physicians were generating collections well below the 25th percentile for their subspecialties. (Overhead ratio = total operating costs ÷ total collections.)

Identifying a problem is the first step in solving it. Since no comparative benchmarking had been done in the practice before, none of the physicians realized that they were bringing in much less revenue than their peers. And since they were unaware of the primary cause of their reduced in­come, they hadn’t taken appropriate steps to address it. Consequently, their below-average revenue had prevented them from doing several important things, such as investing in the equip­ment needed to keep up to date and ensuring that their staff pay rates were competitive with the market.

Benchmarking helps you to uncover problems early and limit the damage. As with silent medical conditions such as undetected hypertension, perni­cious problems can, unknown to you, exist within your practice if you aren’t checking its vital signs. On the other hand, knowing your AcadeMetrics benchmarking numbers can help you to discover and address such problems early. This can prevent a silent impairment that could show up years later, sometimes in irreversible ways, perhaps jeopardizing the financial health of your practice.

Maintaining Practice Health

Be proactive by participating in the AcadeMetrics Survey. Comparing these data to your own performance will allow you to identify any underlying issues in your practice and properly address them in a timely manner. The future health and success of your practice depend on it.

For more information, visit aao.org/academetrics.

___________________________

Mr. Davis is a principal and senior consultant, Ms. Cifers is a senior consultant, and Mr. Preece is a former executive consultant. All are with BSM Consulting, headquartered in Incline Village, Nev. Mr. Davis currently assists Academy staff with the AcadeMetrics benchmarking survey. Financial disclosures: None.