In this month’s article, we’re going to be discussing the third element of the Entrepreneurial Operating System (EOS), data. Remember, the six major categories of discussion include:
I remember some of my first practice management seminars learning about metrics from the likes of chiropractic practice management legends Dr. David Singer and Dr. Larry Markson. PVA, patient visit average, was a concept that I learned and implemented in my practice. It was in fact, the first metric I ever learned about. Now since the beginning of my practice, I’ve always set goals – new patients, billing, collections, etc. But in the early years, before learning about PVA, I had to wait until the end of the month to determine how I was doing. Did we hit the goals or not? Once I was taught PVA, it was a great way to predict how much productivity I could achieve from seeing a certain number of new patients. Of course today, PVA is a mainstay in most practices.
As my practice, and its associated complexities, grew, things got exponentially tougher. I needed to figure out why things weren’t going the way that they I wanted them to go. For a long time, I guessed and used “hunches”, but I learned that understanding the data behind my performance was going to be critical if I was going to get my practice where I wanted it to be. (Author’s note: It’s not there yet, so for all of us, it’s a continual work in progress!). In 2003, we had expanded to four offices, purchasing our first existing practice. It was an exciting time…until the money dried up. Yes, that’s what I said, the money dried up. We had four locations with four different operational structures and it was not going well. Patients were being seen, claims were being submitted, but no money was coming in. During this time, managed care started to get its ugly grip on us. More forms, different forms, more requirements on HCFA’s etc…It was bad, really bad. In fact, we were about to go out of business.
I realized, I needed to do something quick because this wasn’t about anyone on my team. This was about me being a poor leader and making bad decisions. And I had made a lot of them to get us to that point. So, the first thing we did was to reorganize the business and create a central business office. From this starting point, we could manage and monitor the entire back end operation of the practices in one location with appropriate management supervision and support. The second thing we did was to make decisions based on data. We figured out that if we monitored a leading metric like the number of data entry defects before the claims were sent out, we could (1) catch and fix those claims, so they would be submitted cleanly and thus get paid quickly; and (2) provide training and support on the specific areas where a team member was performing poorly. It literally saved our practice. To this day, we still use the “Demo Defect Report”, a portion of which is shown below:
This is one of the many daily, weekly and monthly reports, outside of standard financial reporting, that are worked and communicated in our company consistently. It has taken years to create and consolidate the right kind of data – data that helps us predict, and in many cases improve, our outcome – that has real meaning to the company.
So what about you? What are your leading metrics? Maybe an even more important question is what are your biggest practice problems?
For the sake of example, let’s say it’s hitting your practice’s billing goals. Your new patients have been at goal, but for some reason, you’re not ever able to hit your billing goal and thus your revenue goal and thus your profit goal. What should you do? You can guess as to why that is, and make decisions to change things in your practice, but you’re “hunching” it at that point and if you’re “hunching” wrong, you won’t get to where you want to be. What I would suggest is first identify all the potential variables that might lead to having enough new patients, but not hitting your billing goal, just by drilling down.
Let’s make a list:
1. PVA. I know, that was an easy one! But let’s drill down a little more…what is one obvious potential variable to not having a strong PVA?
o High self-discharge rate. What are the variables that tie to a high self-discharge rate?
2. Not meeting or exceeding ANY aspect of the patient experience. What ties to not meeting or exceeding ANY aspect of the patient experience? Some examples:
· Poor patient education. Why is this happening, how do we measure, and how do we fix and then measure its improvement?
· Poor environment (dirty/disorganized office). Why is this happening, how do we measure, and how do we fix and then measure its improvement?
· Poor treatment response/experience. Why is this happening, how do we measure, and how do we fix and then measure its improvement?
· Poor customer service. Why is this happening, how do we measure, and how do we fix and then measure its improvement?
· Poor financial policy and procedures to help patients with financial hardships. Why is this happening, how do we measure, and how do we fix and then measure its improvement?
· There’s lost more, and there are even external factors that are beyond our control, but I think you get the picture.
So to summarize, what’s the problem solving, data dive process?
1. Figure out ALL the potential variables that tie to a given business problem.
2. Determine which are the top three variables that need to be corrected.
3. Measure those variables in a way where you can establish a baseline and identify trends
4. Determine the best solutions to solve the most obvious and pressing issues first, based on what the data is telling you.
5. Measure your results.
6. Repeat, until you get the results you are looking for!
As you go through this problem solving process, its’ critical to incorporate the feedback of your entire team. They are the ones working on the front lines and they often know not just what the problems are, but how to solve them. If you have front line people who don’t know, then maybe you have the wrong people on the bus or the right person on the bus, but in the wrong seat. Great teams start with great individual contributors, and you can’t solve your practice problems without great people providing input. And by the way, you may not always like what you hear from your team. Maybe YOU’RE the problem in a certain situation that needs to be fixed in one way or another. You know what, we’ve ALL been there. I’ve needed to be “fixed” more times than I can count. But you know what? All that feedback about what I can do better, makes me a much better leader and thus helps me to improve the lives of my team and the lives that my team works to help every single day. So be open to the information you get from your team!
Speaking of feedback, keep it coming at email@example.com, and l can’t wait to hear more stories about your successes!