You need a culture of data within your practice and to really understand the data. What often happens is a physician will go to a conference and come back and say "Well, the sky is falling because our overhead is 70 percent and someone at the conference told me theirs was 35 percent." Most would understand 35 percent not realistic, but they come back and think they need to cut staff, etc. So we need to understand the data and compare apples to apples when we look at your practice versus others.
PP: What metrics would you recommend small practices pay the most attention to?
Clossey: You definitely want to look at your overhead — staff and facilities are the two major buckets at your practice. So you want to look at staffing and expenses and your staff FTEs. You also want to look at your facilities. Your office expenses and marketing are small [low] hanging fruit you can cut and it won't make a dramatic difference.
You need to look at your revenue cycle. What does our [accounts receivable] aging look like? What is our payer mix so we can understand whether we have a high commercial volume or a high Medicare volume? Those are things might affect revenue number.
From a physician / provider standpoint, we need to look at patient volume, number of surgical cases, compensation and relative value units as key indicators. Then you would want to look at your ancillary service line: if you have an allergy or audio department or a pharmacy or an urgent care or MRI. What is the profitability there? That way, if you want to add a new service line, you can build out a service line based on patient volume looks like, revenue projections, patients captured, and other things of that nature.
PP: Do practices need to invest in an advanced dashboard for all their data or is there a simple, low-cost way to follow your advice?
Clossey: I'd say start with an Excel spreadsheet if you don't have anything else. You don't need to spend hundreds of thousands of dollars on an automated tool that refreshes nightly right out of the gate. We do a lot of things in Excel, so you can have a provider dashboard that backs up to your financial statements. A very easy Excel manipulation sets something [like that] up.
Now long term, you may want to look at something else as practice grows and there are a variety of tools out there that do automated uploads to look at things, even call center data, on a daily basis. Focus on key components you should be tracking internally and reporting to management team and what you may want to report to your physicians.