A closer look at your professional services
At the heart of our practice business – the part we love so dearly – is the medicine. Right? So tracking your Professional Services data is one of the first things we veterinarians like to do.
Finding and looking at these numbers is the first step. The second is taking a closer look at what these numbers tell us, and in some cases, what the data asks us to further investigate.
Let me show you what I mean. Here’s a closer look at two very different practices and their Professional Services charts:
Here are some of my observations:
• Seeing that the hospital’s Drug & Medication revenue is 27% of their Professional Services revenue, I wonder: (1) Is this hospital treating medically, prior to a complete diagnosis? (2) Are they offering too many discounts on their professional services, detracting from their profit? What do they discount and who is doing it? Why? (3) Are they missing charges? This report, to me, warrants a look into this. Start a record review process to find out.
• Looking at their Vaccine revenue, I suspect that this hospital has chosen not to charge a physical exam when vaccines are given. My worry is that if this is the case, they are not getting consistent follow-up on medical recommendations made during the exam visit, such as dentistry, skin re-checks and chronic medications.
• Practice revenue from dentistry is far below what I would expect – practically non-existent. This, to me, says there’s great opportunity to grow this category once they focus, communicate and work on it.
• Radiology data – hmmm. Is their X-ray broken? This data point, along with the Diagnostic Imaging data (or lack thereof), makes me wonder if someone isn’t following a practice protocol on diagnostic work-ups, or if one is in order.
• The average pet presents with 3-5 findings or owner concerns on the yearly physical exam. This hospital’s Professional Services are under what I would expect for a hospital doing full-service veterinary care. TIP: look at common areas of concern that need further work-ups and follow up on them. These include skin infections (needing skin scrapes, cytology), ear problems (mites, infection), heartworm & blood tests, fecals, plus all those pets on medications for chronic concerns that need twice a year blood work. And, don’t forget those senior pets that should be coming in twice a year.
Now let’s take a look at HOSPITAL B
My observations here are:
• The largest income categories in Professional Services are exams and lab work, yet I’d like to better understand what is in their “Other Prof. Services” category. It looks as though they have a $24,813 “miscellaneous” category, which in my opinion, is too much money not to account for. This suggests the need to clean and check coding in this category and perhaps add new codes to better track services done more frequently going forward. I’d also look at items in this category that are not consistently charged, such as a small laceration case with clean & clip charges that are not consistent, or bandaging fees charged out sporadically.
• The highest revenue generators in this hospital’s professional services category are Labs and Exams. I would say they are doing a better job than the other hospital in diagnosing prior to treatment. They also do more dentistry, surgery and radiology than the other hospital. I point this out as I suspect they live by that 3-5 rule I mentioned above and are doing a better job at finding those common concerns and performing re-checks on them.
Food for thought
Let me leave you with this tidbit of advice, should your hospital give vaccines (or other medical services) without exams or should you see a large sum in your “Other Prof Services” category and not know what’s in there:
Discounting professional services, or giving them away with a vaccine, can cut deeply into your revenue and compromise your Standard of Care. Throwing too much into an “other” category keeps you from fully understanding what you do well or what services clients appreciate and talk about.
To address issues such as these, consider these quick fixes:
– Review your Standards of Care with all doctors.
– Review charts before and after visits to save time in the long run with an increased focus on past problems and trends.
– Decrease miscellaneous entries or reassign “other services” to their true categories; this will help to better monitor and showcase the true value of this work.
– Check for fee capture for the top 10 procedures that create the most income for your hospital — are they consistently charged for and are they fairly priced? Then print the top 10 procedures done the most frequently – are they charged out? Are they written off? Are they discounted? Do they add value? Here are some examples to consider: a pill splitting fee, 1 radiograph where two were needed, telling the client to “call me if she’s not better” vs. a scheduled re-check, or the ear infection you missed that could have been $200-$330/outbreak. All of these costs can not only lead to lost revenue opportunities but can ultimately lower your quality of patient care.