Revenue and efficiency swings
Q. Our practice has weeks when we're extremely busy, but we see only so-so revenue. Other weeks seem slower, yet revenue is high. Why is this?
Q. Our practice has weeks when we're extremely busy, but we see only so-so revenue. Other weeks seem slower, yet revenue is high. Why is this?
"The biggest source of lost income for a practice is from poor efficiency. And, depending on how efficient your team is, your practice can see wide swings in revenue," says Dr. Joel Parker, president of Professional Business Solutions in Vancouver, British Columbia.
"Efficiency is the ratio of effective or useful output to the total input for any system. I find in many practices that the output—the staff actually moving around, taking care of business, and so on—doesn't necessarily correlate with the input—the revenue collected."
Dr. Parker says an inefficient team spends a good portion of time handling mistakes and resulting confusion, such as upset clients. "The team appears busy, but it's wasting time on nonbillable activities," he says. Efficient teams, on the other hand, follow standard operating procedures and make minimal mistakes, ensuring the delivery of high-quality medicine.
Consider the difference between a soccer team of 5-year-olds compared to a team of professionals. Both have a lot of action going on, right? But the team of 5-year-olds, albeit fun to watch, spends most of its time moving in an uncoordinated fashion. They even score on their own team at times. The professional team moves in a controlled fashion with strict regard for standard operating procedure and scores more goals in less time.
So remember this—any defined procedure is better than none. Standardize your approach, start tracking efficiency, and work less for more revenue.
Dr. Joel Parker
