Derek: I noticed the flashing red lights behind me as soon as the policeman turned them on. I dutifully pulled over to the side of the road and waited. I was not happy. This was the second time I’d been stopped in my first year of having a driver’s license. I drove away a few minutes later, the humble recipient of a speeding ticket for going 40 miles per hour in a 25 mile-per-hour zone.
I was 16 years old at the time, driving a 13-year-old Buick with a leaky radiator and a steering wheel the size of a manhole cover. A few weeks later I stood in front of the traffic court judge and pleaded my case: I couldn’t have been going 40 mph, I said, because I was in second gear and I didn’t think my car could go that fast in second. “What did your speedometer say?” asked the judge. That’s when I suddenly realized my case was doomed. “My speedometer is broken,” I said sheepishly. One gavel slam later, my license was suspended for two weeks. In the late 1960s, the state of California apparently frowned upon acquiring multiple speeding infractions in your first year of driving.
Ann: Costly or not, a speeding citation is what you can expect if you drive around with a broken speedometer. Unfortunately, many ophthalmology practices do the same thing when they try to manage their operations. Without a functioning financial dashboard, it’s easy to suddenly find yourself in trouble if you’re not monitoring the right measures.
Derek: Very true. I just got off the phone with an administrator who is panicked because her 2016 year-end report shows an overhead ratio 10 percent higher than for 2015. She knows the doctors won’t be happy. She could have avoided this problem by watching her key indicators each month through a practice dashboard report.
Ann: A dashboard report shows a practice how it is doing financially each month — and with patient flow. Using this report enables you to correct problems quickly, rather than getting unhappy surprises at the end of the year.
Derek: What figures do you include in your practice dashboard report, Ann?
Ann: We track several key performance indicators: revenues, surgeries, accounts receivable and patient visits and appointments. We also include production per work day and visits per office day because vacations, illnesses and older doctors slowing down impact the total figures. We also have dashboards for both the overall practice and individual doctors so everyone can track their own performance.
Derek: I’ve noticed you include year-to-date and previous year-to-date figures so you can spot declines during the year, rather than waiting for 12 months. Which key performance indicators do you find show the most about how well your practice is doing?
Ann: The first three measures I look at each month are:
- The number of kept appointments for the month. With that number, I can pretty accurately predict the cash flow for the next 30 days or so.
- The average number of days between new patient calls for appointments and their actual appointment. That wait time tells me a lot about whether we need to adjust our templates, open up another day in the office, or begin to make plans for recruiting additional providers.
- The percentage of new patient visits for each physician. A decline tells me that we may have a problem with the physician’s template or where they are spending the most time. It may also mean that it is time to recruit.
Derek: That’s the whole point of a dashboard report, isn’t it? To alert you to factors that might need attention so you can take corrective action. In some cases, a dashboard shows something that you could or should emphasize or duplicate throughout the practice.
Ann: Dashboard reports can also be helpful when they are focused on a specific area of the practice — such as the front desk, the clinical staff or the billing office. My managers use those reports to help them manage staff and operations.
Derek: Great point, Ann.
Attend the Ophthalmologist Business Summit, March 24 to 25 in Dallas, to learn to read critical financial statements, create useful dashboard reporting systems and diagnose problem areas in your practice by using key performance indicators (KPIs) and benchmarks. Register today!
About the Authors
Ann M Hulett, CMPE, CEO - Eyehealth Northwest, PC
Ann is on the AAOE Board of Directors and CEO of EyeHealth Northwest in Portland, Ore., comprised of 26 ophthalmologists, 10 ODs, two ASCs and over 350 employees. She has 25 years experience as a medical practice administrator, 14 in ophthalmology. She worked as the administrator at Rocky Mountain Eye Center in Pueblo, Colo., during which time she served five years on the AAOE Board and received the Secretariat Award. Having started her career as a CPA, Ann enjoys working in areas of finance as well as group governance and physician communications.
Derek A. Preece, MBA
Derek is a principal and senior consultant with BSM Consulting. BSM manages the salary survey for the Academy and OOSS. He is a frequent lecturer at national and state medical society meetings, and is an active author, having written dozens of articles for healthcare publications. Derek is a member of the AAOE Consultant Directory.