The Importance of Benchmarking
The practice of medicine has never been more difficult than it is today. Providing care to the average patient, billing an insurance company for services rendered, and then actually receiving payment for office visits and procedures has become increasingly complex and expensive. With Meaningful Use Stage-2, ICD-10 and payer reform on the way, it’s only going to get more challenging.
Fortunately, there’s a path forward for doctors who want to remain independent and thrive through all the change that’s happening in healthcare. By making data-driven business decisions based on information rather than intuition, through shedding fixed cost spending, and by partnering with business process experts so that medical staff focus exclusively on patient care, your practice can succeed. At gloStream, we call practices that have adopted this mindset pacesetting medical practices. They are smart, lean and focused and so agile that they don’t just handle change, they thrive right through it.
Critically important to becoming a pacesetting medical practice is adopting a continuous improvement mindset and integrating regular benchmarking. Benchmarking is the process of comparing your practice’s key performance indicators and business processes to industry norms. Common areas that are measured during a benchmark include: staff productivity, payment processing, claims processing, accounts receivable and operational costs.
Understanding where you stand and how you compare to your peers is an empowering exercise. It will provide you with critical information so you can make informed business decisions based on data rather than intuition. For example, a benchmark might reveal that the majority of your accounts receivable are over 180 days which is well outside of industry norms. That would prompt greater attention to A/R follow-up and management. Or, you might discover that your same day close rate is only 70 percent signaling that there’s a slowdown in how quickly claims are being distributed to payers and how quickly you are getting paid.Â
Action on either one of these two measures can drastically increase profitability at the practice which is critical to every business owner. Benchmarking might also reveal that your practice is meeting, or even exceeding, industry averages. That, too, is important information because unless you are measuring your effectiveness, you simply don’t know whether you are over or under performing as a practice.
Ask any lean, smart and focused medical practice how they became an agile business and they’ll tell you that it all started with benchmarking, and that they continue to benchmark on a regular basis.
