Do you ever wonder how to measure how well your practice is doing and how it compares with the practices of your peers?
You're not alone. You're used to applying scientific methodology to patient care. It may not occur to you, however, that you can apply such methodology to monitor the "business health" of your practice.
Many practices never get around to establishing measures of performance. Others don't look at them once they're created. It's a task that keeps getting pushed to the back of the "to-do" list. Consequently, many physicians and their practice managers don't know their costs of doing business, much less what those costs should be. It is not something typically taught in medical schools or outside of business courses.
Unfortunately, it is those same practices that we practice management consultants often get called into when finances go awry, overhead seems too high, and there's not enough money left at the end of the month to meet obligations. A physician's practice can "crash" just as can the health of a complex patient. A weak practice can't fully serve its patients-or serve enough patients, and a crashed or failed practice serves no one.
THE WHAT, WHY, AND HOW OF BENCHMARKING
Creating and maintaining benchmarking reports will take time and discipline on the part of you and your practice manager. Long term, however, benchmarking is likely to result in a healthier practice and avoidance of unnecessary problems.
"Benchmarks" merely are data points in statistical reports. They can be applied to many factors of practice management to track the performance "vital signs" of your practice. The statistics of your individual practice can be compared with the statistics of similar practices to identify differences worthy of further scrutiny.
Practice management benchmarking can be useful in keeping your practice operationally healthy, allowing you to have confidence in your practice's performance-which in turn means that you and your partners can concentrate your efforts on patient care. Done right, such benchmarking can highlight problems (or catch them before they have a chance to grow), such as:
Setting up a simple system for evaluating a practice compared with benchmarks involves a few steps, which are outlined in the following sections.