Running a successful chiropractic office takes more than just talented patient care – Dr. Dennis Buckley shares important small business management tips that should be on every independent DC’s mind.
If you have ever been to a sporting event and have arrived after the contest has started, one of the first questions most people ask is, “What’s the score? Who’s winning?”
It’s natural to find out “what the score is?” Have you ever asked this question in your practice? “What’s the score? How are we doing?” I’m talking about an objective look at your practice not a emotional, intuitive evaluation although those can be helpful.
To many times after a sporting contest you hear, “We played great! But we lost.” That may be true but it shows up in the wins and loss column as a loss. You can learn a lot from the score and the statistics from the game to show you how you performed in certain areas and what need s to be done to improve the performance so that next time a win is recorded.
When you drive a car it is helpful to look at the dashboard as part of your driving procedure. You can see how fast you are going, how much gas is left, the RPM’s of the engine, the temperature of the engine, the direction you are going, how many miles are on the car and other items such as warning lights and controls that help you on your journey.
These controls help you make decisions and ask question about the state of your car. Does it need gas? Does it need service? Is it running to hot? Am I going to fast, etc…
Your practice has a dashboard that provides you information and directs you as to what questions need to be asked to make sense of the data and “what the score is.”
This dashboard provides numbers as to how your practice is performing. Common statistics to track include: Number of office visits, New Patients, Collections, and Services over a certain time periods. You can track many more statistics but for the purpose of this article we will use these as the foundation. These are the most important numbers to look at as they can give you a ‘snapshot’ of your practice or “what’s the score?”
These numbers can be daily, weekly, monthly, quarterly or yearly for comparison. Of course comparing year to year also shows your trends, up or down.
Tracking these numbers allows you to take a temperature of your practice to see how it is doing.
With these statistics you can perform some calculations to see how you are doing and see how you are trending. Mostly it provides you a framework as to what questions you need to ask about your practice.
OFFICE VISITS – Office visits are how many people came in for services.
NEW PATIENTS – New Patients are people who are new to your practice.
COLLECTIONS – Collections are what you bring into the practice as income whether across the desk in cash, check or credit card, or in the mail or automatically deposited in your account from third party or private payers.
SERVICES – Services are the dollar amount charged for services rendered.
With these numbers you can perform some simple calculations to mine out more information. The easiest are services per visit and collections per visit. You take the amount of services for a given period and divide that number by the number of office visits giving you the average service per visit.
SERVICES DOLLAR AMOUNT = Services per visit
AMOUNT OF VISITS
The same with collection’s, take the total collections and divide by the total number of visits for the same period and you will see you average collection per visit.
COLLECTION DOLLAR AMOUNT = Collections per visit
AMOUNT OF VISITS
This is important as you can compare the collection per visit to the services. If you had a 100% cash practice, theoretically the collections and services should be the same, providing patients are not running balances. If there is a vast difference you must ask why? Perhaps there are lots of write offs due to contracted rates. You may have a significant amount of personal injury or workers compensation cases and that money will come later. The question you must ask and know is how much of the services do you expect to collect? This statistic allows you to formulate the right questions and get the right answers.
With these four statistics you can also calculate some indicators of performance. The first is called patient visit average (PVA). You take the total number of office visits for a period and divide that number by the amount of new patients for the same period.
AMOUNT OF VISITS = Patient Visit Average
Theoretically it is the average amount of patient visits a new patient will receive over their lifetime. This number is misleading but does provide a number or indicator of effectiveness and what type of practice do you really have. Is it a pain relief practice primarily or a wellness practice.
For example in a three month period you have 10 new patients a month or 30 new patients total, and the total number of visits for that same period was 120 visits. Your PVA would be 4 (120/30=4). You would think with 30 new patients over 3 months that you would have seen more than 120 office visits total. Maybe the first month you may have seen 30 office visits, the next 40 office visits, and the last 50 office visits for a total of 120. If you were just starting out in practice this might be normal as you can see from the statistics a growth pattern. This number is best looked at over a longer period of time but can be checked regularly to see a pattern. This number should go up over time as your practice becomes a combination of new patients under active care and former patients returning for new problems and those patients who are under supportive or wellness care.
The number gives you an indicator of effectiveness. If you are great at obtaining new patients but they are not staying, it give you a reason to ask why and to look at your communication, your procedures and your experience you are providing patients.
The last calculation can also give you an indicator of your effectiveness and it’s called case average. You take the amount of collections over a given period and divide by the number of new patients.
AMOUNT OF COLLECTIONS = Case Average
This will give you an average of how much each new patient is worth over their lifetime. Once again it is misleading but gives you and indicator that you can compare. If each year your case average goes up as it should you can compare each year to the previous to see trends and of course ask questions.
These simple statistical indicators give you a snap shot of your practice. This is a starting point and not the end-all. There are other things you can look at that can be very helpful such as cost-per-visit. You take your total overhead for a period and divide that amount by the number of office visits.
TOTAL PRACTICE OVERHEAD = Cost per visit
TOTAL OFFICE VISITS
This will tell you how much your overhead is for someone to walk through your door as a patient. This is a powerful number as you know how much it cost you when you give away care and when you compare it to your collections per visit.
Anything worthwhile is worth tracking. You can take your collections and break them down. How much is cash? How much is insurance checks? How much is personal injury or workers comp? You can even take insurance and break it down to PPO and HMO.
The same with office visits. What is the make-up of your practice? What percentage is cash, insurance, Medicare, PI, workers comp, free…
Statistics tell you how you are performing. They tell you what questions to ask and where to look. They can give you indicators for predicting what resources are needed in the future. They can help you evaluate to see if your practice is working or not and what areas need attention.
It is essential and practical to keep track of your practice performance. Anything you do in practice is worth tracking and evaluating. Remember, record breakers are record keepers.
This article is from the soon to be released book, The Hole In Your Practice. Learn from the greatest practitioner in the world and the habits they cultivate each and every day.
There you can download the Hole In Your Diploma Book for FREE and sign up for the FREE mentorship program where successful chiropractors will share their journey from chiropractic college to new in practice to successful practice and what keeps their passion fueled today. Yes there is a hole in your diploma and a hole in your practice and the good news is it can be fixed.
This content is by Dr. Dennis Buckley. To read more about Dr. Buckley, click here. You should seek expert counsel in evaluating opinions, treatments, products and services. For more info see our Editorial Policies.