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Welcome back. In this section we will do a deeper dive into interpreting the financial information and uncovering its associated consequences.
Step 3: Analysis
- Financial Report analysis outline, click below
- Finance Case Study CLICK HERE
Step 4: Conclusion
The report shows a major productivity problem. It is Feb 2021, so the low revenue total can not be blamed on COVID. In fact the revenue should be in full recovery with patients past due their screening procedures. The payer mix is very health and should be producing robust revenue.
The group has 10.8 FTEs doing the work that could be accommodates by 4.3 FTEs working at median wRVU workload. When you have 10 people doing the work of 4, what do you think will happen? Could there be other explanations for the reduction of revenue? How does this compare with pre-COVID revenue? Is this temporary or the end of a trend in downward production that began at some point in the past? A horizontal analysis would be helpful. It would also be helpful if this student had been paying attention to the distributed income statements before Feb 2021. The are 10 physicians affected by this statement. Chances are none of them have paid attention or it would not be a surprise to this particular member of the group.
This is actionable information. The administrations obvious action is to fire at least 3 physicians and consolidate services around the others. The obvious physician action is to address the revenue issues and create strategy that will improve productivity. This can be done as a practice improvement project, the methodology you will learn in the third course, “Leading Improvement” in this series. It can also be addresses as a strategic planning project. Go back to the first course in the series and use your newly learned strategy planning skills to address the productivity problem. Of course the third options is always available for physicians. Keep you head down, pretend everything will remain the same, and be surprised one day when you are notified that your position has been eliminated. My suggestion, proactive beats reactive every day.
Do you have the skills to read and interpret your practice financial information?
Do you have the other business skills you need to be an effective participant in decisions that affect how your practice operates? Join us, acquire the knowledge, and use it to make things better.
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