The delivery of high-quality care is the No. 1 priority for physicians — but quality should be supported by sound healthcare financial management. Here are five ways to help physicians understand what drives the bottom line.
Review basic financial reports and key metrics monthly
Three reports – the balance sheet, income statement and cash flow forecast – can give physicians a clear, concise indication of the group’s financial performance. Keep it simple: What does cash flow for the organization look like? How is revenue trending? Are there any outliers in expenses? What is the forecast for cash flow based on volume and payment trends? The key is comparing current periods with prior years’ performance and against budget to reveal variances and trends.
Reviewing measures such as revenue per FTE, compensation package per FTE, and overhead as a percentage of total expense also will help physicians understand whether their practice’s performance is in line with its business plan and how the practice compares with other practices nationally.
Share relevant benchmarks
Be sure to benchmark data that physicians consider important. Physicians often want to know how their group is performing relative to other practices. Common productivity measures are: work relative value units, cases, base units, procedures and number of patients seen per hour.
Show physicians why accurate documentation matters
In a very real sense, all revenue begins with clinical documentation. Missing or incomplete documentation can result in lower-paying DRGs and faulty case mix index. Clinical documentation also serves as the linchpin for quality reporting/scores, which the community often monitors closely.
My very-learned McKesson colleague and senior coding director, Cindy Cain, has counseled numerous healthcare organizations on the importance of accurate documentation. Her message to physicians is that good clinical documentation will improve communication, increase recognition of comorbid conditions that are responsive to treatment, validate the care that was provided, facilitate accurate reimbursement, and show compliance with quality and safety guidelines.
She summarizes it this memorable way: “If you didn’t write it, it did not happen and it cannot be billed.” (Read more about Cindy’s perspectives on clinical documentation in our blog.)
Connect the dots
Physicians should periodically view their practice through the lens of a business owner, keeping in mind that each decision has a bottom-line impact. Physician groups should have a decision framework in place that provides an efficient process for making business decisions. For example: Who has authority to decide? What are the bottom-line implications? Is there a downside/risk? How soon must the decision be made? Each decision should comply with the group’s financial, strategic, and patient care objectives.
Keep it brief
Be respectful of a physician’s limited time. During financial reviews, physicians should be able to immediately understand where the practice stands. Do not overcomplicate the presentation with details that will cloud key information. Instead, use dashboard tools to zero in on only those metrics physicians need to know; then, be available for subsequent outside discussion if further explanation is requested.
McKesson Business Performance Services provides healthcare organizations and their employed physicians as much – or as little – help as they need to optimize all areas of the revenue cycle, including patient access, coding, charge capture, compliance, medical billing and accounts receivable management. Learn more about our physician revenue cycle management services and how we can help you grow revenue and maintain positive cash flow.