Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

This is what every medical practice should have

David J. Norris, MD, MBA
Physician
April 8, 2017
Share
Tweet
Share

An excerpt from The Financially Intelligent Physician: What They Didn’t Teach You in Medical School.

Every practice should have a dashboard of financial and performance metrics that the physician leader studies on a regular basis. A good dashboard should include the financial analysis tools that are most important to the organization. Pick which ones you want on the dashboard and use them. Maybe you like a few solvency ratios and some horizontal and vertical analysis. It’s completely up to you. Personally, I like the current ratio, working capital, days in A/R, days in A/P, operating margin, and horizontal and vertical analysis for each period. The important thing to do is keep track of your ratios and report them the same way each period. Make it easy to spot trends and changes.

Things you should do on a regular basis

In medicine, there are certain reports or data we might want or need at different times. If we have a patient on a heparin drip or vancomycin infusion, we might order a PTT or vancomycin level daily or every few hours. If we are treating a diabetic patient, we might check the Hgb-A1C every few months. Different disease states and therapies determine the frequency with which we examine the results.

As you operate your small business, the same principle applies. There are certain reports or data points you might want on a daily, weekly, monthly, or quarterly basis. If you aren’t the one looking at these reports, then your assigned delegate should perform these tasks regularly and report the findings to you.

Daily checks

How much cash do you have in the bank? This should be a daily check for you or someone you delegate this task to (e.g., an office manager or accountant). It’s important to understand your receivables and payables, but you use cash to pay your bills today. Knowing your daily cash position is vital for daily operations as well as planning for the future. These are easy things to do on a regular basis. As Jim Rohn said, “Things that are easy to do are easy not to do.” It will take discipline, but it’s easy enough. So just do it.

Weekly checks

Who owes you money? How long have they owed you the money? When was the money due? Make certain you, your office staff, or your billing company stays on top of your receivables. Are the claims being worked appropriately? You won’t know who hasn’t paid you unless you keep track of that information. Don’t think just because they owe you money that they’ll be nice and pay. Sometimes people need to be reminded of what they owe. A gentle reminder is always helpful.

Whom do you owe money to? When is it due? Can you pay it on time? What is your relationship with those to whom you owe money? Is it possible to renegotiate terms?

After you have determined who owes you money, how much you think you’ll get, and whom you plan to pay, you can then project your cash position into the future. This will be very helpful especially if you anticipate needing to utilize a line of credit to make payroll.

Monthly checks

Review your income statement and balance sheet reports. Compare them to the last month and last year. What changes are you noticing? What seems unexpected? Why did it occur? What seems expected?

Recheck your receivables. Who is late? What is the plan to obtain your money? Where are they in your collection process?

Look at your productivity reports. How did the month go? What do you think will happen next month?

Quarterly checks

ADVERTISEMENT

Review your quarterly income statements and balance sheets. What trends are developing over that time? What do you expect to see on the reports?

Examine your productivity reports. Look for any trends. Do they make sense? Does the data you’re seeing match with what you’re experiencing in the clinic? Try to catch issues as soon as possible.

Annual checks

Take some time and plan for taxes. Examine your annual income statements, balance sheets, and cash flow statements. Look at how you performed for the entire year. What went well? What improved? What grew? What didn’t do so well? What shrank? Why did these changes occur? What’s your plan for the next year? Where do you want to be in one year? How will you get there? The annual review is as much, if not more, looking forward as looking back.

David J. Norris is a cardiac anesthesiologist and the author of The Financially Intelligent Physician: What They Didn’t Teach You in Medical School.

Image credit: Shutterstock.com

Prev

MKSAP: 79-year-old man with right hip pain

April 8, 2017 Kevin 1
…
Next

Maybe mothers saved the Affordable Care Act

April 8, 2017 Kevin 0
…

Tagged as: Primary Care

Post navigation

< Previous Post
MKSAP: 79-year-old man with right hip pain
Next Post >
Maybe mothers saved the Affordable Care Act

ADVERTISEMENT

Related Posts

  • Medical school is more than practice problems

    Kira Kopacz
  • Medical education systematically ignores the diversity of medical practice

    Rebekah Fenton, MD
  • Digital advances in the medical aid in dying movement

    Jennifer Lynn
  • A medical student’s physician inspiration

    Uju Momah
  • How the COVID-19 pandemic highlights the need for social media training in medical education 

    Oscar Chen, Sera Choi, and Clara Seong
  • Interstate licensure for telehealth can fuel medical practice growth

    Chad Anguilm, MBA, David L. Feldman, MD, MBA, and Remi Stone, JD

More in Physician

  • Why working in Hawai’i health care isn’t all paradise

    Clayton Foster, MD
  • How New Mexico became a malpractice lawsuit hotspot

    Patrick Hudson, MD
  • Why compassion—not credentials—defines great doctors

    Dr. Saad S. Alshohaib
  • Why Canada is losing its skilled immigrant doctors

    Olumuyiwa Bamgbade, MD
  • Why doctors are reclaiming control from burnout culture

    Maureen Gibbons, MD
  • Why screening for diseases you might have can backfire

    Andy Lazris, MD and Alan Roth, DO
  • Most Popular

  • Past Week

    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
    • Here’s what providers really need in a modern EHR

      Laura Kohlhagen, MD, MBA | Tech
    • How New Mexico became a malpractice lawsuit hotspot

      Patrick Hudson, MD | Physician
    • How community paramedicine impacts Indigenous elders

      Noah Weinberg | Conditions
    • Why doctors are reclaiming control from burnout culture

      Maureen Gibbons, MD | Physician
  • Past 6 Months

    • Why tracking cognitive load could save doctors and patients

      Hiba Fatima Hamid | Education
    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • What the world must learn from the life and death of Hind Rajab

      Saba Qaiser, RN | Conditions
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
    • Here’s what providers really need in a modern EHR

      Laura Kohlhagen, MD, MBA | Tech
    • How medical culture hides burnout in plain sight

      Marco Benítez | Conditions
  • Recent Posts

    • Who will train the next generation of primary care clinicians without physician mentorship? [PODCAST]

      The Podcast by KevinMD | Podcast
    • The hidden health risks in the One Big Beautiful Bill Act

      Trevor Lyford, MPH | Policy
    • The CDC’s restructuring: Where is the voice of health care in the room?

      Tarek Khrisat, MD | Policy
    • Choosing between care and country: a dual citizen’s Independence Day reflection

      Kathleen Muldoon, PhD | Policy
    • What Elon Musk and Diddy reveal about the price of power

      Osmund Agbo, MD | Conditions
    • 3 tips for using AI medical scribes to save time charting

      Erica Dorn, FNP | Tech

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

Leave a Comment

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

  • Most Popular

  • Past Week

    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
    • Here’s what providers really need in a modern EHR

      Laura Kohlhagen, MD, MBA | Tech
    • How New Mexico became a malpractice lawsuit hotspot

      Patrick Hudson, MD | Physician
    • How community paramedicine impacts Indigenous elders

      Noah Weinberg | Conditions
    • Why doctors are reclaiming control from burnout culture

      Maureen Gibbons, MD | Physician
  • Past 6 Months

    • Why tracking cognitive load could save doctors and patients

      Hiba Fatima Hamid | Education
    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • What the world must learn from the life and death of Hind Rajab

      Saba Qaiser, RN | Conditions
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
    • Here’s what providers really need in a modern EHR

      Laura Kohlhagen, MD, MBA | Tech
    • How medical culture hides burnout in plain sight

      Marco Benítez | Conditions
  • Recent Posts

    • Who will train the next generation of primary care clinicians without physician mentorship? [PODCAST]

      The Podcast by KevinMD | Podcast
    • The hidden health risks in the One Big Beautiful Bill Act

      Trevor Lyford, MPH | Policy
    • The CDC’s restructuring: Where is the voice of health care in the room?

      Tarek Khrisat, MD | Policy
    • Choosing between care and country: a dual citizen’s Independence Day reflection

      Kathleen Muldoon, PhD | Policy
    • What Elon Musk and Diddy reveal about the price of power

      Osmund Agbo, MD | Conditions
    • 3 tips for using AI medical scribes to save time charting

      Erica Dorn, FNP | Tech

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Leave a Comment

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...