If you are following my series of post that discuss things our practice is doing to remain viable, thank you for coming back. If you’ve stumbled on to my blog for the first time, welcome. This post is the third of a series of blog post where I discuss some of the things our private pediatric practice is doing to remain a viable business. You can check back to read the other two post.
Today, I’d like to talk a little about how our office sometimes uses reporting to understand our business, but also find ways to improve it.
I cannot improve what I do not measure. With that in mind, I run reports and dissect our practice’s data. I love to run reports, create charts, and study them. How does this help me? Glad you asked. Reports help me understand, thus manage the business better.
But I’m not just talking about looking at the practice’s gross numbers, net billing numbers, net collection ratios and things like that. We know those are important. I’m talking about measuring, graphing, studying data one normally may not measure.
I was talking to a dentist friend of mine and I asked him how his practice was doing. He told me, “last month was pretty busy, but this month has been real slow.” I asked him if he had compared last year’s patient count with this year’s count to see if a similar dip had occurred. He responded by saying he didn’t keep count.
I then started to explain the value of looking at monthly patient counts. I’ve done this from day one. Analyzing monthly patient counts enables me to establish seasonal demand and trends. As a result, I know how high my highs can be and high low my lows can be. Moreover, I know when each is more likely to occur, which enables me to prepare for those ups and downs.
How do I use the data?
Guess when I allow my staff to go on vacation? When patient appointments are expected to drop. Guess which month I’m going to be scheduling the 5-year old school physicals I talked about the other day? During those months our appointments generally tend to be low.
Another practical example of understanding appointment demand can be to hire seasonal help. Retail stores, UPS and the Post Office do this all the time. Hiring seasonal may help with cash flow as well. No need to hire someone full-time if you really only need them for a short period of time.
We also track newborn counts. Tracking newborn counts helps me manage vaccines inventory and utilization. With the count, I’m able to plug these newborn numbers in my vaccine analysis and get a better picture of my vaccine utilization, forecasting or determining potential revenue.
For example, GlaxoSmithKline’s vaccine rebate program is based on tiers. In other words, the price of Pediarix (and others vac’s) depends on how many doses I buy within a certain period. Just like any other sales driven organization, GSK want to sell us more of their products and they often entice us by suggesting to buy more doses in order to qualify for the next tier, which gets me a better price on the vaccines.
But knowing exactly how many newborns we see helps me decide whether or not I ought to buy more of a certain vaccine. I can appreciate the discount, but I surely don’t want to buy 200 extra doses of something and then have the product sit in our refrigerator for several months. Not to mention having thousands of dollars tied up in a refrigerator doesn’t always help with cash flow. Now, if cash flow isn’t a problem and the discount is considerable, then I might go ahead. But I know I’ll have extra inventory for some time.
These are just a few examples, but I am sure you can come up with many more. The challenge for me is to get myself out of a comfortable zone and find ways to improve the business. Reporting is one of the easiest way I’ve found to accomplish this.
I challenge you to look at data in a different way. You’d be amaze of what you’d learn.