Staying on top of the business side of your practice is up there in importance next to providing good customer service. If you aren't paying attention to your numbers and practice performance on a regular basis, you're going to be missing out on big chunks of profits for your practice. If you're able to identify early on where in your EHR workflow your practice is losing money it will be easier for you to make the necessary adjustments and bounce back.
We recently put together an eBook with Dr. Gary Gerber and our own, Steve Sunder, that discusses a variety of practice benchmarks your practice should be looking at. Today, we will take a look at just two of them, but if you want to learn more you can download the full eBook here.
2 Calculations for Improving Your EHR Workflow
How to Calculate Chair Cost in Your Pratice
Measuring your chair cost will help reflect the costs associated with providing care to one patient. Being aware of this cost requires you to look at a few different things, including the insurance your practice accepts along with your fixed costs. In the end, you want your chair cost to be lower than your insurance reimbursement to ensure that you're making the money back to cover your chair cost.
1. Calculate your fixed costs (our example assumes 45% of gross income is operating expenses).
Gross Income - Operating Expenses = Fixed Costs
$400,000 - $180,000 = $220,000
2. Determine your revenue generating patient visits for the year. Don't include visits that don't bring in revenue such as follow-ups or prescription refill requests.
Revenue Generating Visits = 4,000
3. Calculate your chair cost.
Fixed Costs / Revenue Generating Visits = Chair Cost
$220,000 / 4,000 = $55
How to Calculate Revenue per Staff Hour in Your Practice
Now that you've looked at your chair cost, let's take a look at gross revenue per staff hour. This will help you understand the revenue generated by your team. Here, you'll want to see the highest revenue per staff member possible. When calculating this metric go ahead and only include non-OD staff. Also, determine if you want to calculate on a monthly, quarterly, or yearly basis. Our example will look at monthly revenue per staff hour.
1. Calculate hours worked for full time staff.
Number of Full Time Staff Members x Number of Hours Worked per Week = Total Monthly Hours
3 Full Time Staff Members x 160 Monthly Hours Each = 480 Total Hours
2. Calculate hours worked for part time staff.
Number of Part Time Staff Members x Number of Hours Worked per Week = Total Monthly Hours
2 Part Time Staff Members x 80 Monthly Hours Each = 160 Total Monthly Hours
3. Calculate gross revenue per staff hour.
Gross Revenue (Previous Month) / Total Hours Worked = Gross Revenue per Staff Hour
$57,000 / 640 Hours = $90 per Staff Hour
Want to learn about 6 other benchmarks your practice should be looking at? Check out the full eBook!