Benchmarking your practice

Medical Economics Journal, Medical Economics June 2022 edition, Volume 99, Issue 06

What metrics physicians should track

Running a physician practice means wearing different hats — sometimes a challenge when patient care takes most of a doctor’s time. For a practice to thrive, it is important to track, measure and address specific benchmarks. Here we look at some key areas, from converting leads to claim denials, navigating a value-based care model and tracking reimbursement.

Clinical/quality benchmarks

Denise Brown, M.D., an internal medicine physician and the chief growth and strategy officer at Vituity, a nationwide multispecialty physician partnership based in Emeryville, California, breaks down key benchmarks into essential “buckets” for doctors to prioritize as follows: clinical, operational, financial and equity.

Measuring clinical metrics can be challenging, Brown says, particularly when trying to measure patient outcomes. “The real outcome that matters is quality of life,” she says “and everyone’s got a slightly different perception of what that is.” She recommends physicians utilize quality-of-life surveys or track how often patients avoid emergency room admission or readmission.

In the value-based care model “we’re going to get paid on the value we create,” according to David McNeil, president of PatientPop, a growth and patient engagement platform for independent practices based in Santa Monica, California. The challenge for the primary care physician is to work to eliminate hospitalization or referrals to specialists when possible, and both metrics can be tracked.

Operational benchmarks

“It’s the operational benchmarks that can really make or break your small group or private practice,” Brown says. These include such metrics as tracking how long patients wait in your office before being seen, how well your practice communicates with patients and whether it provides options such as text, email and phone.

What physicians must realize about improving their operations is that “we are in a new era of consumer-driven health care,” McNeil says. “Patients want the Uber experience … easy, accessible and convenient.”

This necessitates looking at the patient experience from the moment a practice first collects patient information, which he says should be a digital, simple process. “And when they show up, they’re brought right into the appointment room and it’s just as elegant as it can be,” he says.

Physicians should also follow up appointments with reviews through an automatic process such as a text or email survey. “That’s what we’re experiencing in every other industry, and health care has just been historically behind,” McNeil says.

Financial benchmarks

Important financial benchmarks begin before a practice even sees a patient, McNeil says. “What are your incoming patient leads and are those leads converting?” he asks.

He suggests that in this digital age there are many opportunities to track conversion rates of patient leads into appointments, but it does require having a website, app or patient portal and staying on top of online reviews. It also requires paying attention to patients’ show rate and looking at the technology and software that could be introduced to make the process easier for practice manager and patient. “This could be providing text confirmations, digital intake forms, etc.”

The model dictates the metrics

The financial metrics a practice needs to track will vary depending on the financial model of the business, according to David Berg, president of Redirect Health, a care navigation company with headquarters in Scottsdale, Arizona.

“In an entirely fee-for-service model, the more I do, the more I’m going to make — so if I’m spending too much time with somebody and not getting that corresponding billing, I’m going to get in trouble financially.” In this model, physicians will likely be tracking ways to offer patient care that do not always require an in-office visit, he says.

In the fee-for-service model, physicians must pay close attention to their collection percentage. “It’s easy to leave a lot of money on the table if the doctor is not measuring collection percentages based on the work they do,” Berg says. Improving this ratio may require collecting more from patients up front or increasing the number or the seamlessness of available payment options.

In the value-based care model, where physicians are paid in a capitated way, the financial benchmarks become more connected to the quality of patient care, McNeil says. This means physicians must work more efficiently to reduce frequency of patient visits. “With value-based care, getting the trust of the patient is more important, and the customer experience depends a lot on communication,” McNeil says.

Berg discovered after years of running a practice that physicians need to take a very close look at how they are being reimbursed by Medicare/Medicaid. “I would encourage physicians to pick the top 10 codes they use and measure the pricing for just those, because I see a lot of doctors getting fooled in their contracts.”

For example, he says, “If I’m a primary care doctor, I don’t really care what I get paid on a heart surgery. Or if I never do skin biopsies, it doesn’t matter what I’d get paid. What matters is what I get paid on the services I typically do.”

Accounts receivable

An obvious, but often fraught, metric to track is accounts receivable (AR). “You don’t want your AR to get huge,” says Beth Cable, director of revenue cycle operation for AKASA, an artificial intelligence (AI)-powered automation for health care businesses.

Common problems with AR include denied claims and the work of correcting errors and resubmitting claims. “You want to make sure you’re collecting as much as you can and tying that in with a clean claim rate, which means getting that claim out the door right the first time,” Cable says.

This is where AI-based programs can help automate processes that would otherwise consume the resources of a billing person or practice manager. “Some AR denials and requests for additional documentation requests can be handled by AI,” Cable says.

Berg recommends an in-house billing person over outsourcing. “The first 80% of claims are fairly easy to get. The next 10% gets dramatically harder to collect, and you’ve got to know when to stop trying so you don’t waste money.” The amount of money most outsourcing companies want may not be worth it to obtain that last 5% to 10% for a smaller practice.

Equity benchmarks

Lastly, Brown emphasizes the importance of measuring equity in a practice, although it is not as easy a metric to track as some others. “Who are you treating and why, and how did you decide?” she asks. “If you don’t take insurance, why are you not, or which insurances are you not taking?” She feels these are important questions for a practice to ask to ensure it is reaching as wide a patient population as possible.

Berg adds that this extends to guiding patients, who are often confused by their health care journey, in understanding everything from how to make an appointment to the costs of their care. “The more that a doctor can hold a patient’s hand and guide them through the things where they have the most fear and doubt, the more value that doctor is going to create.”