Why is Dr.Lewis So Successful?
Dr. Tim Lewis—Case Study #452
As a practice management consultant, there is nothing more gratifying than to have a doctor and team reach their goals! The purpose of this article is to help other practices look at their success or their struggle by making a comparison to Dr. Lewis’s practice goals. Keep in mind that this is not about reaching a specific production dollar amount compared to other practices. Each practice has its own unique production/collection goal.
How To Determine Your Monetary Goal:
First, review your employee gross wages for the past 12 months and your net collections. Gross Wages / Net Collections = Gross Wage Overhead. Salary standard in the industry is 19–22% of net collections for a general practice. In most cases, you can now establish what your collection goal needs to be for the next 12 months, assuming that no drastic changes are planned for staffing, new facility, etc. (Remember that practice management overhead is not the same as what your accountant calculates.)
Let’s say that your Gross Wage Overhead for your team is at 24% and you want it to be 20%. First, determine what your production adjustments were for last year. These are adjustments that reduced your patient fees such as employee discounts, insurance adjustments, senior citizens courtesies, etc. If your adjustments were 20%, you will need to divide your collection goal by the inversion of 20%, or 80%.
Because your Schedule and Hygiene Coordinator schedule to a production goal and not a collection goal, this step must be performed to correctly calculate your daily goal.
Keep in mind that the more they produce the less the doctor needs to produce!
This math can be done on a yearly scale if you prefer not to re-calculate the goals every month. I would recommend that you calculate it yearly to save time and avoid changing the daily goal each month.
What Dr. Lewis Learned:
How Does This Apply To You?
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