Are You Being as Productive as You Need to Run a Successful Independent Practice?Identifying the drivers of a private practice productivity is vital to measure the financial health of the business
It is also important to identify where the most opportunity lies for improvement when it comes to the way the practice is managed and clients are cared for.
Here are 3 quick tips for measuring your practice productivity:
1. Efficiency and Effectiveness
The first step is to determine what productivity actually means. The best metric to use is the utilization rate or number of hours per client per week including, commute and documentation of care, you invest in the provision of care.
Utilization is defined as the amount of a practitioner’s available time that’s used for productive, billable work, expressed as a percentage. It’s a measure of billing efficiency that helps the business understand if it’s billing enough to cover its cost plus overhead. To learn more about how to calculate your utilization rate, please check the following article here.
2. Net Collection Rate
Net collection rate measures productivity by determining how much of the work a practitioner bills for, actually gets paid. It measures how effective the practice is at collecting all legitimate forms of reimbursement for services. The net collection rate will reveal deficiencies in this process. It provides visibility into what is actually being collected and what your independent practice is actually allowed to collect after factoring in any refunds, write-offs, discounts, etc. To learn more about how to calculate your practice net collection rate, please check the following article click here.
3. Outstanding Account Receivables
This is one of the key indicators of a practice’s performance. How long does it take your practice to collect payments for services you provide? Reducing the time, it takes for an outstanding invoice to be paid is key to increase cashflow and overall financial stability of your business.
There are a variety of metrics that practitioners can use to assess how effectively and efficiently running their practice is. While some such as net collection rates and outstanding accounts receivable are traditionally seen as indicators of how satisfied clients are with the services provided, they may also indicate billing issues.
Practitioners should strive to leverage all the automation that technology can offer and create a streamlined billing process in order to improve performance and metrics.
This will help identify any potential problems early on and hopefully result in increased satisfaction among clients.
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