General Financial Performance

• Business Processes that Generate Income
• Understanding Your Reimbursements and Fee Schedules
• Payor Mix Analysis
• The Billing Process
• Using Your Computer System
• Collection Target and Performance Analysis
• Calculating Collection Target
• Accounts Receivable Analysis
• Overhead Cost Analysis
• 13 Tips for Effective Billing
• Financial Performance Analysis and Reports
• Monitoring Third-Party Payments
• Monthly Management Reports
• Managing Staff Costs
• Relative Value Units - a history and calculations

General Practice Management

• How to Have Your Staff Be Effective
• The Myth That Physicians Are Not Trained In Business
• Co-Employment/Staff Leasing
• Computer Selection, Part I
• End of Year Opportunities
• Incentive Compensation for Optometrists and Opticians
• Financing Eyecare Services
• Outsourcing in Ophthalmology Practices
• Medical Equipment Acquisition
• Staff Incentives and Bonuses

In past issues of this newsletter, we’ve worked through the methodology to use in the analysis of your practice’s financial performance. In the next two issues, we’ll look at a set of regular management reports formatted for review by you and the physicians in your practice.

The reports to consider include the following:

Income

• Product-line
• Productivity
• Payor-mix
• Collection performance
• Accounts Receivable

Expense

• Expenses as a percent of income

First, a review. In order to have meaningful management reports, the setup of your computer system is critical (see the March 13, 2000 issue of this newsletter). Particular emphasis should be placed on your assignment of each insurance plan to a payor class based on expectation of payment.

Second, remember that some of the reports we discuss here will have to be generated manually, using data from your computer billing system. These may include your product-line, productivity, and payor-mix reports, as well as a summary table of collection performance.

Third, keep in mind the purpose of this report set. It should be a concise snapshot of the performance of the business of the practice, and it should be reviewable in 15 to 30 minutes. This report set should be distinct from the reports you generate for managing your billing operation and for collecting receivables.

Product-Line and Productivity
The first issue of Watching Your Bottom Line explained this report. To review, it can be presented in major categories and subcategories with volumes expressed as the number of charges, dollars charged, and RVUs. The categories and subcategories are arrayed in a chart as in the following example:

	Number This Month	Number YTD	Number YTD Last Year	Charges This Month	Charges YTD	Charges YTD Last Year	RVUs This Month	RVUs YTD	RVUs YTD Last Year
I. Medical-surgical
a. Encounters
i. Total new patients
1.Office consults
2. Hospital consults
3. New patient office visits
ii. Total established patients
1. Post-operative (no charge) visits
2. Total established patients
3. Total patient encounters
b. Surgeries
i. Total surgeries
1. Total office surgeries
a. Lasers
b. Minor surgeries (chalazion, etc.)
2. Total hospital surgeries
a. Cataracts
b. Other surgeries
II. Vision (routine eye exams and refractions)
a. Vision exam
b. Refractions only
III. Dispensing (eyeglasses and contact lenses)
a. Contact lenses
i. Fitting and service							N/A	N/A	N/A
ii. Refill							N/A	N/A	N/A
b. Eyeglasses
i. Number of frames sold							N/A	N/A	N/A
ii. Single vision lenses							N/A	N/A	N/A
iii. Progressive lenses							N/A	N/A	N/A
iv. Frame upgrades							N/A	N/A	N/A
IV. Refractive surgery (# of eyes)							N/A	N/A	N/A
V. Cosmetic surgery (# of cases)
VI. TOTAL CHARGES							N/A	N/A	N/A

Payor Mix
In this report (originally covered in the May 19, 1999 issue of Watching Your Bottom line), insurance plans are assigned to categories and tracked to define the characteristics of the practice’s “customers.” The data can be displayed as follows:

Payor	Class	Charges (1/1/98-12/31/98)
Mix Medicare