When we are analyzing the health of a practice, the first thing we look at is the big picture of the Practice Performance. That is, we look at how much revenue is brought in on a monthly basis, how many patients are seen, how many doctor days were available, resulting in how much profit. It is amazing how much information we can glean by looking at this information on a monthly basis and by comparing it month over month and year over year.
From this overview, we can get a sense of trends happening in the office and start to dig deeper.
For instance, if we see the number of patients increase but revenue decrease, we know that the practice is working harder not smarter. We will then assess the number of patients being seen each day. In a full scope, primary care practice, seeing too many patients often translates into less revenue – there is a direct correlation. Staffing is also considered. If we are understaffed, it is possible that we are not able to offer as much assistance to each and every patient, which would also negatively impact the amount of revenue generated by the practice.
If we notice that the number of doctor days available in the clinic is less than the previous year, we will confirm that this was anticipated – either because of vacation or because an associate left the practice. This change often has the biggest impact on staff incentives. If the staff incentive has been set up to incentivize based on growth, the staff is unlikely to meet the goals in this scenario. This is one of the reason’s that we recommend that incentive programs be based on number of doctor days rather than straight practice growth.
If we find the doctor days are going up and revenue and number of patients is remaining fairly stable, we might suspect that we need to increase our marketing efforts. Digging deeper into the patient numbers and evaluating which efforts are the most successful would be our next logical step.
As with any business, there are ebbs and flows in an optometric practice business. Having access to data that will easily show you the pulse of your practice will help guide your business as you experience these constant changes.
is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at firstname.lastname@example.org.