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Benchmarking

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Translating data into action

What Is Benchmarking?

Collect Data

Compare Data Take Action


Why Benchmark?

How are we this busy and money is so tight?

Why are we not as profitable as our peers? Is it my revenue or cost that is causing the problem?

Have you asked yourself?

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Improve performance

- Provider Productivity

- Revenue Enhancement

- Staff & Practice Efficiency

- Bottom Line (higher revenue, less costs)

Objective of Benchmarking


Identify what you want to measure and improve

on (Key Performance Indicators)

Measure the performance for the indicators you

have selected

Identifying what benchmark you are going to

compare your measurements to

Compare your measurements to that of your

identified benchmark

Benchmarking Process


Identify the difference between your

measurements and that of your benchmark

Deciphering the reason for these differences

Deciding what improvements can be made to

improve your processes/productivity/outcomes

Implementing new processes or policies to

accomplish improved measurements

Repeating this process to identify if your goals are

accomplished and to identify continual opportunities for improvement

Benchmarking Process

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Learn from & mimic better performing practices

- Productivity

- Services

- Staffing

- Patient flow

- Wait times

Compare & Learn


Getting Started

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Key Performance Indicators (KPIs)

• Financial and non-financial metrics that define and measure progress toward organizational goals – Describe factors key to its success – Must be quantifiable (measurable) – Definitions and how they are measured should not

change often

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KPI Examples

• Charges

• Receipts (Insurance & POS)

• Visits • WRVUs

• Number & type of Surgeries

• Number & type of office procedures

• Percent of A/R (0 – 60 days) • Staffing Ratios

• Overhead Percent

• Payer Mix


Collecting KPIs

(Internal Data Sources)

• Standard Financial Statements – Income Statement – Balance Sheet – Payroll

• Special Reports – Appointment Schedules – Patient billing system reports – Claims clearinghouse reports – Electronic Health Record reports

• Special Surveys, Inventories, or Assessments – Number of staff – Periodic patient satisfaction survey – Stop watch assessment of patient waiting time


Collecting KPIs (External Data Sources)

• Educational Events and Conferences

• Outside Industry Publications

• MGMA Surveys

• MGMA Performance and Practices of Successful Medical Groups Report

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Path to Profitability

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Performance Characteristics of Financial Successful Organizations

Which Organizations Are Most Profitable?

Those with: • Higher productivity • More revenue • Higher costs • Right sized staff • Managed overhead


Revenue Costs Profit

Two Paths

Increasing Profitability

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Revenue

Productivity

• MD

• Staff

Collections

• Coding

• Claims

• Bad Debt

• Process

Costs

Staffing • Wages • Benefits • Levels

Gen Oper Expenses • Rent/Lease • Information Technology • Malpractice Insurance

Navigating the Path


Case Study

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Family Practice (w/OB) Medical Group

Demographics – Metropolitan Area of the Western Region

– 2 FTE Family Physicians (one is FP/OB)

– 3 Physician Assistants

– Practice is owned by one doctor

Current Conditions – Practice in business for 25 years

– Busy: however, visits & revenue are lower then prior year

– Cash always an issue and with lower volumes, practice is behind paying its vendors

– MA was promoted to Practice Manager without any management experience and no skill set to analyze and resolve problems

– Patients complain about phone system problems

Situation

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Demonstrate the relationship between metrics

Illustrate process (Solution Cycle)

• Problem driven

• More than one solution

• Requires expertise

Navigate path using solutions that maximize profits

How will benchmarking help?

Action

Assess

Analyze


Assessment

Metric 2012 MGMA Rank

- per FTE Physician - Owner

Total Medical Revenue $703,692 92nd

Ambulatory Visits 4,578 75th

WRVUs 5,611 75th

Phys Compensation (owner) $158,000 19th

Ranking Report – MD Owner


What would cause:

- low physician compensation (owner MD)

When we have:

- strong physician productivity &

- strong cash receipts

The owner should be making approx. $260,000 = 75 percentile compensation for FP OB Doc

Analyze

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Assessment of other providers

Metric 2012 Rank

- per FTE Physician – Non Owner

Total Medical Revenue $238,767 9th %

Ambulatory Visits 2,208 7th %

WRVUs 2,375 7th %

Physician Comp (non-owner) $77,292 4th %

Ranking Report (employed MD)


Assessment of Data

Metric 2012 MGMA Rank Pts/Day

Ambulatory Visits

Owner MD (FP/OB) 4,578 75th % 22.0

Employed MD (FP) 2,208 7th % 10.6

PA #1 (FP) 4,072 47th % 19.6

PA #2 (FP) 2,092 5th % 10.1

PA #3 (replaced in Jan 2013) 2,133 6th % 10.3

Patient Visits


Assessment of Data

Metric 2012 2013

Compensation/Revenue

Owner MD 22.5% 23.3%

Employed MD 32.4% 29.4%

PA #1 30.7% 32.8%

PA #2 32.3% 37.6%

PA #3 (replaced in Jan 2013) N/A 68.0%

Compensation as % of Revenue

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Assessment of Data

Metric Practice Practice Cumm. MGMA MGMA

Accounts Receivable $ A/R % A/R % Better

Performers Cumulative

A/R 0 - 30 days 203,233 51.0 % 51.0% 65.9% 65.9%

A/R 31 - 60 days 62,744 15.7% 66.7% 13.9% 79.8%

A/R 61 - 90 days 40,408 10.1% 76.9% 7.6% 87.4%

A/R 91 - 120 days 17,518 4.4% 81.3% 4.1% 91.5%

A/R 121 + days 74,609 18.7% 100.0% 8.5% 100.0%

Accounts Receivable


– The strong productivity of the MD Owner is subsidizing the lower producing providers

– Less productive providers impact the profitability of the entire practice

– Employed MD – is not board certified and as a result, he is only paneled on only half of the payer panels

– Only one of the PAs is supporting his overhead costs

• This PA is on a production based contract

• The other PAs are paid an hourly rate

Why is this Practice Struggling?


– Pt. Volume Targets were established (65 pts/day)

• Pt. Visits jumped 6.5% in August 2013

– Employed MD was given the option to become board certified or seek other employment

• He signed up to take his Boards

– PA Contracts were converted to production based vs hourly and based on their full time status

– KPI reports were developed & are distributed monthly

– A/R Targets were established (80% of A/R 0 – 60 days)

Action Taken (July 2013)

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Coding Benchmarking

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Coding Benchmarking


Coding Benchmarking

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Coding Impacts Revenue


Enhance Physician Productivity with Education

Benchmarking leads to Action


WRVU Analysis

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WRVU Analysis

The Basics

RVU= Relative Value Unit Three Components: - Work RVU (WRVU) - Practice Expense (PE-RVU) - Malpractice RVU (M-RVU) All Sum to a Total RVU (T-RVU)


Relationships Between Data

Compensation

Productivity (WRVUs)

Collections


RVU Based Compensation Models

• WRVU based compensation models have become common for hospital employed physicians

• Using benchmarking data to compare physicians in the same group can be a motivation for physicians to increase their productivity

• For Stark Compliance, there must be parity between a physicians productivity measured by WRVUs and his Compensation

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WRVU Comparative Data

Gastroenterology

2012 AMGA Provider Comparables 25th %tile 50th %tile 75th %tile

Compensation 352,374 435,120 564,155

Gross Charges 1,310,581 1,801,861 2,575,689

Net Collected 565,829 777,816 1,105,895

WRVUs 6,596 7,992 9,898

Compensation per WRVU 54.44

Gross Productivity / WRVUs 198.69 225.46 260.22

Net Collected / WRVUs 85.78 97.32 111.73


RVU Employment Based Compensation Models

• Gastroenterologists who produce 7,992 WRVU or the 50th percentile on average make $435,120 in compensation

• Gross Charges per WRVU are approx. $225 • Net Collections per WRVU are approx. $98

• If this same gastroenterologist wanted to make

approx. $564,000 in compensation, his WRVU productivity would need to be approx. 9,898


Motivating Physician Productivity Example: Employed Ortho Hand Doc wanted Compensation to exceed $500,000 per year: • WRVU Based Compensation Model • Established WRVU target to meet compensation goal • Trended WRVU Productivity Monthly • Year 2 Results:

• WRVUs Increased 18% • Collections Increased 18% • Doctor Exceeded his Compensation Goal of $500,000/yr

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Monthly Tracking Report


Monthly Tracking Report - 2

200

250

300

350

400

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

wRVU Goal

wRVU Acual

MGMA FP Mean

• MGMA Mean Compensation = 180,000

• Adjusted Compensation Target = 140,000

Adjusted for vacations in the summer


• Identify opportunities for improvement

– Operations expenses

– Productivity optimization

– Staffing ratios

• Validation for compensation structure

• Achieving Organizational Goals

Benefits of Benchmarking

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Questions

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Documents

Benchmarking - AAPCstatic.aapc.com/a3c7c3fe-6fa1-4d67-8534-a3c9c8315fa0/e18725d7-636a...Benchmarking 1 Add Presentation ... thPhys Compensation (owner) $158,000 19 Ranking Report –