How Many Miles Before Your Pediatric Practice Runs Out Of Gasoline?

My Grandfather shared with me once that back in the day (in the 1950s), he and his buddies would drive around town until the empty light on the car’s dashboard lit up. Once the light was on, they’d reset the car’s odometer and drive until the car would run out of gas.

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The purpose?

The purpose of the exercise was to know with certainty how far their cars could take them once the gauge indicated empty.

As it turns out, gasoline stations were few and far between in rural Texas, so knowing you had enough gas to reach the next town was, in fact, a very good idea.

Let’s say your medical practice is a car, cash is gasoline and miles are weeks.

With that in mind, consider these questions:

  • Does your car (practice) have a gasoline (cash) gauge that displays full – half – empty?
  • If your car (practice) doesn’t have a gauge, how do you know when the gasoline (cash) falls below critical levels?
  • With a full tank of gas (cash) how many miles (weeks) is your car (practice) able to cover?
  • How much and how often do you need to fill your car’s (practice) gas tank (bank)?
  • Do you know your car’s (practice) empty light threshold?
  • When it lights up, because your car’s (practice) gasoline (cash) is reaching empty, would you know – like my grandfather and his buddies knew – how many miles (weeks) you could cover before running out of gas (cash)?
  • Do you carry a portable gasoline tank (i.e. savings or line of credit) to use if there isn’t a gas station for miles (weeks)?

I think it is safe to assume that most everybody agrees, driving a car around without a gasoline gauge is foolish. Equally foolish would be to disregard the “empty” light on your car’s dashboard. And we can all agree it would be unwise to look for a gas station after your car runs out of gasoline instead of before.

Many however, manage their practices believing the practice will never run out of gasoline. Many, don’t even have gasoline gauges, which is bad enough, but even worse is disregarding the “empty” light all together when it lights up. Others have a huge hole in their gasoline tank and keep wondering where their gas is going?

In the How The Mighty Fall: And Why Some Companies Never Give In, Jim Collins talks about how companies start to fall apart way before they actually fall apart. Like a disease that starts to affect the body before symptoms are visible, many companies start the decline before the leadership is even able to make a diagnosis. And often times, by the time the leadership realizes there is a problem, it is often too late.

Don’t let your practice be one of the companies Collins is talking about and make sure your practice monitors cash-flow the way drivers manage their car’s fuel needs.

(By the way, in case you were wondering. My grandfather carried with him a portable gasoline tank during the “how far can the car go before it runs out of gasoline” experiment). 

Want To Be An Awesome Practice Manager? Learn How To Calculate This Key Performance Indicator

Revenue per encounter is an excellent barometer of your practice’s financial health. There are many things that influence the revenue per encounter and consequently allow you to see the impact of things such as:

  • Are your claims being processed timely?
  • Are your claims being paid properly?
  • Are you being paid fairly?
  • Is your payor mix excellent, fair or poor?
  • Are you following proper CPT coding guidelines?

To determine your practice’s revenue per encounter, you’ll need 2 sets of data. The first is the number for patient visits during the previous 12-months. The second set of data you’ll need is the practice’s total revenue over the same time period. With these two data sets, you can calculate how much revenue your practice generates per visit.

The formula is simple:

Revenue / Encounter = Revenue Per Encounter

If you want to get a bit sophisticated, you can break down the revenue and number of encounters by month. I recommend you go the extra mile on this one. You’ll see why in a bit.

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Once you have the two data sets, you want to set up a simple spreadsheet that looks similar to the image on the right.

You will notice that the Excel sheet mock-up shows monthly variation in the revenue per encounter.

There are multiple explanation for the variance, but generally, it can be explained by the ratio difference between the practice’s sick and well visits.

During the winter months, the practice sees more sick visits and less check-ups while the summer months brings well visit encounters with higher per visit revenue due to vaccines and ancillary services.

Flu season influences revenue per encounter as well. A busy or mild flu season will have an obvious impact on patient encounters.

Want to go a step further? Do the same break-down by provider, by month.

With this simple exercise, the practice is able to estimate the number of encounters and revenue on a monthly basis for the coming year. Moreover, the practice is able to predict its revenue stream in an effective manner and plan for cash outlay such as when the vaccine bills are due.


Thanks to the Pediatric Management Institute for providing the majority of the content for this post. 


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Increase Your Medical Practice’s Bottom Line In One Easy Step

A few months before we opened the practice, we picked up a flyer inviting doctors, billing and coding staffers to attend a coding seminar in town.  It looked like something we ought to go considering we were about to open our very own private practice and had zero billing and coding knowledge.

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About one minute into the lecture, I was lost. I had no idea what they were talking about. I was merely a marketing guy and had no idea about managing a practice, let alone billing and coding.

But I didn’t worry. My wife was a few years out of residency at the time, so this logical questions ran through my mind: surely this coding thing was still fresh in her mind?

As the trainer continued talking in a foreign language (I later found out was divided into two dialects, CPT and ICD9) I assured myself …doctors are taught this peculiar character/numerical dialect during medical school and then get the change to master it during residency. It would be as foolish as having a sail boat with no sails to not teach doctors how to bill and code. Besides, how do you pass the boards without knowing billing and coding? 

I had nothing to worry about.

What? You’re as clueless as I am? Didn’t you pass the boards? You mean to tell me that in those 3-years they didn’t even give you a lunch seminar on how to get paid for your work?

My next thought was, Oh boy! We are a deep, deep, sh… I mean 787.91.

Here is the thing, as ridiculous as not teaching residents at least the basics of billing and coding may sound, what’s more ridiculous, is that many doctors don’t do anything about it. Few docs – knowing very well that billing is coding determines their pay – learn how to document and code properly. Many don’t even go to coding seminars regularly.

Instead, may docs (not the ones that read this blog, of course) blame health insurance companies or blame their EMRs for getting payed less while to do more. All of which is likely true.

But here is a hard truth. If you’re a health provider and you do not take the time to learn and stay current with with coding and billing guidelines, then you need to get the list of all the things you blame for declining pay and write your name at the top of that list.

Why? Because the loss of revenue is happens in your examining room as a result of poor documentation and poor coding. 

Fundamentally, most pediatricians are doing the work. But because they lack knowledge and awareness on how to document and bill as a result of not keeping up to date they are leaving countless dollars – dollars they’ve worked for – on the table.

It also is worth mentioning that relying on your billing and coding team is not an excuse to not to keep up to date on coding and billing guidelines. To put it in perspective, putting all the responsibility on your billing and coding department is like asking your nurse or MA to take full responsibility for your patients.

And I’m not diminishing the role of clinical support staff or the coding and billing department. My point is that RNs and MAs, as well as billing and coding personnel, are there to assist.

If want to improve your medical practice’s bottom line in one easy step, all you need to do – for starters – is:

Attend a coding seminar,  pronto!

I’ll guarantee you’ll increase your bottom line.

You’re welcome!

How To Implement A Credit Card On File Program For Your Medical Practice

mmp_logo_for_web53My friend Mary Pat Whaley from recently published a FREE 30-minute webinar where she introduces the concept of Credit Card on File exclusively for PediatricInc subscribers.

How cool is that? 

Actually, that is partially true. The webinar is in fact free. But it is not only for PediatricInc subscribers. It is available for everyone! (I got carried away).

Even though this is only a 30-minute webinar, Mary Pat covers a lot of ground. Below is a list of what she goes over:

  • What are the Four Steps to implementing CCOF?
  • Is it legal and PCI-complaint to keep a credit card on file?
  • How do you get the patient’s signature on a credit card transaction if they are not physically in the practice?
  • What if the patient refuses to give us a credit card or does not have a credit or debit card?
  • Credit card fees are expensive! Why would I want to increase my credit card merchant fees?
  • Do practices usually ask Medicaid and Medicare patientsto keep a credit card on file?
  • What impact will the Affordable Care Act (ACA or Obamacare) have on practices with or without a credit card on file program?
  • Is there a Payment Gateway or Credit Card Processor that you recommend?
  • What are the major benefits to using a credit card on file program in a practice?
  • What other resources are available if I want to implement Credit Card on File in my practice?
  • Attendee questions and answers

If you’ve followed me on social media for some time, you know I’m a huge fan of the CCOF program. At Salud Pediatrics, we instituted the COF in 2009 and never looked back. I’d say it has been one of the best decisions we’ve made.

Sure, we’ve ruffled some feathers. Some parents still get defensive. But the overwhelming majority of parents in our practice understand why it is necessary for us to do this.

Below, I’ve embedded the webinar. Make sure to visit after seeing the video. They have a lot of great resources and a fabulous, informative blog. Mary Pat was also an early guest on the Pediatric Practice Management AwesomeCast. You can check out the interview Chip and I did with Mary Pat by clicking here.




Brandon, What Is Your Policy On Keeping Credit Numbers on File? [Pediatric Practice Management AwesomeCast]

I continue to get a lot of questions about our practice’s policy of collecting credit information from all of our patients. So Chip and I thought we’d dig into what is a recognized growing trend.

In this episode, I describe my thoughts going into this decision, some of my concerns, and why we decided to collect them. Chip also asked me how do we go about collecting cards, how did I/we present the idea to parents, where I store the cards and what benefits did it bring to our practice and our families.

I also give out a shou-tout to Mary Pat Whaley from Mary Pat hosts a monthly webinar on how to implement a credit card on file.

I addition to this recording, I’ve written quite extensively about the issue. If you click on this “link“, you’ll be directed to all things collections from the PediatricInc perspective.





iTunes link

Is Your Company’s Culture Hindering Your Profitability?

1-IMG_0089I come from a non-medical business world where most conversation centers around profit, revenue, budgets, marketing, sales and things like that.

In the private  practice world, mentioning profit or revenue is almost prohibited as if it was a kind of taboo.

I remember being a little taken aback when people in the healthcare business would talk about “profit” and they would lower their voices and look around and whisper the words “making money” to ensure nobody outside of our conversation heard the money reference.

In our practice, we take a completely different approach. In our practice, we don’t apologize for our pursuit of profitability.

We are very upfront with both patients and our staff about the need to be profitable.

We view “profitability” as a responsibility.

Why? Because a broke doctor doesn’t do anybody any good.

Profitability allows the practice to hire the best docs, hire the best staff, buy the best equipment, send staff to training, pay for docs’ CME’s and all the other things that go along with ensuring patients receive the best medical care possible.

Top notch medical care is expensive.

We believe so strong in this, that in our practice, we discuss profitability in practice’s core values document. Here is an excerpt from our company’s charter:

In order to carry out our mission, we recognize that every staff member must take every opportunity to decrease cost, to increase efficiency, and earn revenues that support our team, our practice and our patients.

In today’s health care climate,  practice employee must be comfortable with talking about money. They need to know that not only is it okay, but a necessity.

Thus, I suggest it is important to “bake” revenue into the culture of the practice.

Fundamentally, this approach sets the expectation. Employees understand that collecting copayments and balances at the time of service is vital to the practice’s mission.

By openly talking about money,  employees understand that the money that comes in to the practice isn’t the doctor’s money, but it is everybody’s money. Collecting from both insurance companies and parents is where the practice gets the money to pay everybody’s salary.

In primary care, this is even more critical because we are in a low margin, high volume business.

And it isn’t just collections. Keeping down cost an unnecessary expenses is just as important. In pediatrics, for example, drawing up vaccines incorrectly, dropping a dose on the floor or simply keeping poor inventory can make the difference between profitability and loss.

Want to avoid revenue leaks an increase profitability? Start talking about money.

Embed it into the practice’s culture.

Please don’t misunderstand me with this point. I’m not suggesting that we only think about money. That is not what I’m suggesting. After all, we are still healthcare providers and things like empathy, caring, understanding, healing, compassion and sacrifice are all part of what we do day to day.

But what I am saying is that if there isn’t enough “margin” docs and their staff won’t be around to be empathetic, caring, compassionate and heal patients. In other words, we can’t help people in need if the practice is also in need.

#10 Pediatric Compensation Models [Practice Management VideoCast]

In an amazing feat of timely discussion, Chip cover the topic of compensation models in pediatric practices.

It’s not just about the pay, it’s about the management duties, performance measures, and dissatisfaction that many practices feel with their present methods of paying themselves.

We reference many real-life examples and data from a survey of 100s of pediatricians.

Chip will be covering this topic at the PCC 2013 UC and it has been submitted as a topic for presentation at the 2014 NCE with co-host Susanne Madden of The Verden Group.

During the discussion, I references a book entitled, “Physician Compensation Plans” published by the MGMA that you may want to look into if you are looking for ideas or examples of how practices compensate physicians.

As always, you can find our discussions in many ways:

1. Google+ Community

2. Pediatric Practice Management Mediacast PodCast

3. iTunes

#6 Learning Steps to Budget for Your Medical Practice [Practice Management VideoCast]

In this episode, Chip and I have our first guest. Paul Vanchiere was kind enough to sit down with us to talk about budgeting.

Why budgeting? Well, I suspect that this is an area where many practice don’t excel. If you are part of a larger group, the likelihood you have a sound budgeting process that is sophisticated. But for those in smaller offices, not so much.

Paul is a great guest because he has been worked in many different healthcare setting. This experience has given him a unique perspective that I find interesting.  And it so happens, he’s worked a lot on budgeting for both large and small practice.

Paul highlights 3 key issues that we ought to consider in order to properly budget for our office. The are:

  1. Capacity
  2. Payment – Revenue per encounter
  3. Expenses

Want to learn more about these 3 keys? Then watch the video.

Before you go though, let me mention a few things.


We make the video into a podcast so that you can download it and listen to it at your leisure. The podcast goes for about an hour. Chip, Paul and I stick around and continue talking…. we sometimes leave “nuggets” of info towards the end.

You can go to iTunes, search for pediatric practice management or go to this link if you are not fond of the iTunes ecosystem.


Paul is doing seminar in several parts of the US this year where he will address budgeting and other practice management issues. If you are interested in them, follow this link:

OK, here is the video:

Episode 3: What To Look For When Selecting A Medical Billing Company

We recorded another video… I think we are actually getting better at this.

For this video, Chip and I talk about Billing Companies. Chip shared seven tips that ought to be on everybody’s mind if they are considering going with a medical billing company.

I shared with Chip our experience billing services, in-house billing and what circumstances have led us to have the setup we currently have; which I describe as a hybrid model.

We also discussed our thoughts on when it is appropriate to use a billing company, what to look for in a contract and how the practice should set up their front desk to maximize collection efforts.

Take look at the video for more practice management gold nuggets.


By the way, feedback is always welcome. We are all ears.

Awesome Webinar: Fixing Revenue Leaks For Small Medical Practices

Webinar-Graphic1We interrupt this scheduled programming to inform you that I’ll be doing a Webinar this Tuesday December 18, at 2 pm ET / 11am PT.

The topic?  Fixing critical revenue-cycle leaks for small medical practices.

The webinar is hosted by FiercePracticeManagemet and it will examine how to fix causes of revenue cycle leaks.

Topics of discussion will include:

  • How to optimize every point of your revenue cycle, from appointment-setting to collecting on past-due accounts.
  • A review of common billing and denials-management deficiencies and how to fix them.
  • Tips for managing the increasingly prevalent bucket of self-pay collections.
  • Strategies for boosting time-of-service collections.
  • How to hire and train employees who take true ownership and responsibility over the practice’s revenue cycle success.

You can sign up for the webinar by clicking “HERE”.