Transcription for

PRACTICE HEALTH METRICS

DR. JEFFERY ZIMMERMAN

Continuing Education Programs APA

MAY 2017

PROVIDED BY

CAPTION ACCESS

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May 22, 2017

PRACTICE HEALTH METRICS

DR. JEFFERY ZIMMERMAN

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[MUSIC]

DR. NEIMEYER: Welcome to today's webcast on practice health metrics.

I'm Dr. Greg Neimeyer. I direct the Office of CE in Psychology at the American Psychological Association and also the Center for Learning and Career Development.

We're thrilled to have you on board today for today's webcast on practice health metrics with Dr. Jeff Zimmerman.

Let me just say at the outset that if you're interested in participating, asking questions, generating discussion today, and you're joining this live online, feel free to do that. You'll see in the lower left-hand side of your screen will be a tab marked Questions. Just click on that and email the questions in to us. We will get them to Dr. Zimmerman, and get responses to all of your questions. Just be aware that any question you ask will be recorded and archived. And so you will be making a permanent contribution to today's webcast.

Again, welcome aboard.

Let me take the opportunity to introduce to you Dr. Jeff Zimmerman. Dr. Zimmerman received his doctorate in clinical psychology from the University of Mississippi and did his internship at the West Virginia University Medical Center in the Department of Behavioral Medicine and Psychiatry. He's worked in a mental health center, and also as the Chief Psychologist at Mount Sinai Hospital in Hartford, Connecticut. He's a fellow and past president of the Connecticut Psychological Association and a recipient of its Distinguished Contribution to the Practice of Psychology award. Dr. Zimmerman is also board-certified in clinical psychology by the American Board of Professional Psychology, and a fellow of the American Psychological Association. In 2015, Dr. Zimmerman received the honor of Distinguished Fellowship in the National Academies of Practice, and was admitted to the Psychology Academy as a Distinguished Practitioner and Fellow.

We're delighted to have him on board today to talk with us about the important and intriguing topic of practice health metrics. Please join me in welcoming Dr. Jeff Zimmerman.

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DR. ZIMMERMAN: Thank you.

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[APPLAUSE]

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DR. ZIMMERMAN: Thank you, Dr Neimeyer, and thank you also to the Office of Continuing Education and the new Center for Learning and Career Development, and, of course, to APA. Thank you too for those of you that are here, face-to-face in person. And those of you that are here over the Internet and the web. We are really glad that you're joining us, and as Dr. Neimeyer said, feel free to send in your questions or comments as we go.

We do have a schedule to follow and a hard stop, so get those questions and comments in as soon as you have them. You don't have to hold up, and we'll try to get to as many as we can during the program.

Also, before I go too far in and then remember, as I did in one of our other segments. In terms of complete disclosure, I am a co-author and co-editor of three books on practice, and also a co-founder and principal of the Practice Institute. I'm not here per se on their behalf, or to sell any books, I'm here as a function of the gracious invitation from APA and Dr Neimeyer and his staff.

I also want to thank your staff as well, who've made this process go really smoothly from the speaker's standpoint. So thank you, I only asked Dr. Neimeyer's staff I think 1000 or 2,000 questions, or maybe 100 or 200 questions over the process, literally, to make sure that we were all in sync, and everything went as good as we can. So I know this is our fourth segment, and if I haven't thanked you, thank you.

This series has been four segments, this is our fourth segment. If you've seen the other three, that's terrific, or if you've seen some of the other three, that's great. These segments are designed to weave together but are also designed to stand on their own. So if you have seen some of the other segments, you may hear some examples that carry over from one segment to the next. Or some concepts that carry over from one segment to the next, and I appreciate your bearing with us on that, your indulgence on that. As some of the concepts are, nevertheless, important to mention in other segments besides the one that you may have heard it in. So thank you for that.

So today we're focusing on practice health metrics, and the program that we have is going to first concentrate on the types of measures that you can look at. Certainly, there are outcome measures, there are accounts receivables measures, referral patterns, productivity, that sort of thing...

We'll be talking about keeping it simple, pertinent, and doable. There's a lot of people who are overwhelmed out there about the idea of looking at practice metrics. And how can I possibly do it, and what do I have to invest, and how much time, and how difficult it's going to be.

In many respects this can be a DYI, a do-it-yourself project that doesn't have to require either an advanced degree from Wharton in economics or finances or practice evaluation or assessments or something like that. You can keep it simple and pertinent and doable.

We'll talk about using a dashboard, and what that concept is all about. We'll talk about loss prevention, and other ways of measuring the health of your practice. And finally, talk about how data can be used for strategic planning.

Many practices that I speak with tend to intuit what they do. They are basing their important decisions on their feelings, on what it feels like. They're not basing important decisions, sometimes clinically, sometimes in terms of practice management, sometimes in terms of program delivery... They're not basing those decisions necessarily on data, they're basing them on their sense of what's going on. And unfortunately, our sense can be right, which is fortunate, but it can also not be right.

And when we make these important decisions, and sometimes very expensive decisions, based on a sense of things, we often can be making poor decisions.

I was consulting with somebody not too long ago who was looking to expand his practice. And he was telling me that he had one type of services that he was providing, that he really wanted to get a lot more clinicians to do that work. And then he had this other set of services he was providing, and he was going to kind of just let that ride.

And I said, "Well, let's just look at the numbers."

And it turned out that the costs and income from option A that he wanted to expand were trivial. The net was trivial, maybe $5, $2 a visit. I don't want to give too much identifying information, but very small. And the net over here, once he costed it out, was considerably larger per visit. But yet, his intuition told him, because he liked the people that were doing this work and it was easy, that this is where he should really spend his resources.

So we need to be careful about this idea, and even in terms of strategic planning, of going with our intuition.

Your practice is too important. And you've invested too much in your practice to just go with intuition. Your practice is also important not just from a financial standpoint, but clearly from the standpoint of what you offer the community. And your practice, whether it's for-profit or not-for- profit, needs to be sustainable. It needs to be viable if you're going to offer those services to the community.

So your ability to provide the very services that the community, hopefully, is asking for and needing, and that you're well aligned with what the community needs. Your ability to do that depends on how healthy your practice is and how you manage it. Not only from an operations standpoint, not only from a clinical delivery of service standpoint, but also from a financial standpoint.

By the way, my bias is that the clinical service delivery is going to be the highest quality you can have it be. So we'll be talking a lot about numbers and finances in this segment. But that does not marginalize in any way, or trivialize in any way, the importance of the quality of the service you're delivering. And whether you're looking at your outcome data or not, that still needs to be central. Because low quality

service in a sustainable environment is probably not going to sustain your practice. Because the word will get out that you're not delivering quality work and you may not be sustainable. But likewise, high quality work in an unsustainable practice, financially, is probably not going to lead to the continued delivery of services. You see this in not-for-profits as well as for-profits.

So let's begin by looking at how practice metrics can be helpful. Why should we have them? So one point is, you need to know what it is you're doing. And later on, we will look at some information on a dashboard and we'll show how that works.

But you really need to know what you're doing. You need to not operate by your intuition, or by the seat of your pants, or by what feels good.

There are a lot of practices who also have sustained lots of losses. We hire, for example, business managers who are with us for years. We hire clinicians who we trust, and sometimes, that trust is betrayed. Sometimes, it's not because of betrayal. It's because we're not paying attention. And we don't realize that there are a lot of claims, for example, that have gone unpaid. Or that were not dotting certain i's, and crossing certain t's. And now we're in a difficult situation.

There are some people who have submitted claims so inappropriately that, when they've contacted me, I've said, "You don't want to talk to me first. You want to talk to your risk management carrier. Because I'm concerned, from what you've told me, that you have a bigger--and you might want to talk to your lawyer--that you have bigger problem in terms of your potential for fraudulent, your claims being deemed fraudulent, and what that might mean, than how you're running your practice."

So mistakes can happen, even out of ignorance. But they're very costly, or they can be very costly. And it's really important to be careful, because those costs come right out of the bottom line of the practice. Which means they also come off your dinner table if you're the practice holder.

If you also align with your values, which we've talked about in other segments of this four-segment workshop, you have a practice and you have providers where there's good fit and good alignment. You have clinicians who are more present and motivated in their work.

You have administrative staff who are, as well. And by the way, here's a shout out to the administrative staff. They often are the people with the least recognition in the practice. And they're often the people that really should have a great deal of recognition in the practice, because they are often the first point of contact and the last point of contact. So when you think about primacy and recency effects, they're the person that first connects with your client, as well as the rest of the community out there. And they're often the last person that connects with the client as the client is walking out the door. They're the people that can make your practice successful. And they're the people whose attitude, as well as their delivery of their professional services, cannot make your practice successful. And if they're having errors, if they're sloppy, if they're not motivated, if they feel mistreated, it's likely to impact their productivity, and, consequently, what happens in your practice.

So let's look at some metrics that you might want to consider including. These are just broad categories of metrics.

You certainly have clinical outcomes. Is what I'm doing helpful? And there's a lot of research out there about different ways of measuring clinical outcomes. And there are some instruments that are labor intensive. And then there are some other approaches that are very much not labor intensive. And you certainly can look at what is pertinent for the kind of practice and the kind of services that you have.

Referral patterns is another area. Where are my referrals coming from? How many of my current clients are referring cases, or referring their friends and family? Am I asking, how did you hear of me? Very simple question to ask on the first phone call: "By the way, how did you get my name?" Sometimes it's volunteered, but many times it's not. Many times, the answer will be, I don't really know. I think I found you on the Internet. Okay, that's a category, Internet. [LAUGH] That's a very different category than friends and family. That's a different category than primary care physician. That's a different category than school, or other potential referral sources. Or as I like to say, referral partners, which is another conversation for another time.

You also can be looking at utilization and demographics. How are we doing in terms of reaching the populations we want to work with? Are there gaps in that? Are there places where we have excessively short or excessively long lengths of stay?

We're providing 35 sessions, but it feels really long to provide 35 sessions for those people or with that diagnosis, and 10 feels like it might be more the average. And when you look at the literature, you see it's 9.3. You don't just go by what you feel. You see it's 9.3, and yet you're doing 35 sessions. Why is that? Now, maybe there's a reason and you can articulate that reason, but maybe there's not. And you need to look at that.

In one of our other segments, I talked about a case of an experienced child therapist. And his length of stay with kids was far below that of the rest of the practice. And the question that came up is, why is that, and why is it even below what we would expect it to be for him years ago?

And it turned out that he was very busy, and very involved, and had a large caseload, and had slacked off on the collateral contacts with the parents. That he was providing the individual therapy, but he was not informing the parents about the process, about his work. So when the child came home and said, "I played cards with Doctor"--it wasn't me--but, "I played cards with Dr. Zimmerman, "or, "I played checkers today," or, "We played with the dinosaurs on the floor," the parents would hear that. They wouldn't have a perspective for that, and they would say, "Well, we're too busy and it cost too much to take the child to go play with the psychologist, " and he was losing cases.

When he changed his way of working and the practice figured out a way that he should be connecting with parents, and that he was able to do that, the amount of visits returned to normal. The practice never would have known that, if they weren't tracking him.

And I would suggest that the outcome of having tracked it is not just related to the practice's wellbeing, but it's related to the wellbeing for all those Timmys and Melissas, and all of those kids who came in, were doing the work of the child therapy-- and then, in the midst of that, had that work terminated because Mom and Dad didn't understand, and all of a sudden they stopped going--no goodbyes probably, just stopped going.

So this is not just about the impact on the practice, but it's perhaps at least, if not more importantly, on the impact in this particular case on the kids.

You can also look at productivity. There are many times that your busiest professionals are not necessarily your most productive professionals. We'll show you an example of that later.

And we'll also look at the kinds of measures related to accounts receivable and some of the financial aspects of providing care.

What makes these metrics helpful is, as I was saying in the outline of today's program, is keeping it simple, keeping it pertinent, and keeping it doable. That means you have to have careful thought and design before you decide what it is and how you're going to do it.

If you're in an outpatient practice and you're administering a 35-item questionnaire while your clients are sitting in the waiting room, and that questionnaire is going to be administered every three visits or every four visits, you need to be thinking about what happens when the client arrives two minutes before the session. (Excuse me.) Does the client want to do that kind of work? What is the transferential implications of asking the client to fill out that questionnaire or that survey, and the client feeling obligated to you to do something for you and for your practice?

What's the data entry piece of that? Who's going to enter all of those surveys, and all of those 35 items, time and time and time again? How's that going to be paid for, who's going to do that work, who's going to do the data analysis, and what are you going to do with the data when you finally get it?

Just saying, well, I heard this was a great questionnaire because I read a journal article about it, and it's a great questionnaire, so I'm going to administer it. Oh, and by the way, you may have to pay for the product or the questionnaire or the survey that you're using as well , and/or the data analysis around that.

Just to say I'm going to do it without careful thought, you wind up replicating what we see in so many different environments where people put in often large and sometimes very expensive systems, which then they don't use. And there's a lot of time and energy spent uploading that and then to not use it. It's like buying a piece of computer equipment that you would just put in the closet and never use.

If you have a group practice, or even if you're in a solo practice, getting compliance is a big issue. If you're collecting data, as we know, in our own personal exercise programs, sometimes weight loss programs, what have you, collecting data on ourselves for ourselves and for our own health is something that is not easy for many of us. So we don't count how many calories we're intaking, we don't track how many calories we're putting out in our exercise, or what those exercises are. If we're trying to

drink less or smoke less, we don't count how many drinks or cigarettes we're smoking less, consuming less. It's hard to get compliance even when it's about us.

Your practice, if you're in solo practice, is about you, and it's about all that you've invested and continue to invest. The investment isn't just your graduate training, your investment is all you continue to invest in terms of the expenses, literally, the expenses of the practice as a financial investment, and the emotional and time commitments to the practice as well, those are continued investments. And even with all of that, it's still hard to get compliance if you're a solo practice owner, solo clinician.

Imagine then, how hard it is to get compliance if you are in a group practice, and you're working with three or four other colleagues who are co-owners in the practice, you need their compliance. And imagine if you have other staff, clinical and administrative staff, and you're looking to get their compliance. Just saying, "This is something we're going to start and you need to do it," is usually not enough, in my experience, to make it happen on a sustained basis.

You can ask me to track my exercise, and I'll track it for a little while. And then I get a little sloppy, a little more sloppy, a little more...and before you know it, I'm not tracking it at all. So the tracking of it and the compliance is important, and it really needs to be thought about as a strategic decision, in terms of how we're going to really assure that compliance.

(Excuse me.)

And then, how are we going to use the data? Are we going to use it? So we do all of this work to collect it, and then we let the data sit, because I don't have time to do the analysis. Who's going to do the analysis? Do they really have the qualifications to do that? How are we going to look at it? Or do we just have all of these reports floating around?

I'm remembering the age of the old large computer printers, and you'd get a report on the green and white striped paper. And the report would be, you know, two or three inches thick, and each page would have data. Who can understand all of that? Maybe somebody can, but if you're also running your own practice and you have a life outside the practice, it's really hard to take that and make that usable. So a lot of thought needs to be put into how we're going to make it usable.

So, I mentioned about improving patient care. And certainly...

Yes, we have a question before we go on to that slide.

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FEMALE VOICE: You mentioned research about average lengths of treatment for diagnosis. Where can I find that information?

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DR. ZIMMERMAN: I don't have the studies at hand, I've very sorry about that. But there is research out there that is about average length of outpatient treatment. You might have to dig a little bit more in

terms of per diagnosis, depending on what that diagnosis is. You also may be able to look into the research that's already been done around that diagnosis and you may have prevalence data that's out there on that particular diagnosis. And depending on the treatment approaches that have been studied, you may also be able to see average length of sessions. So I wish I had more specific citations for you off the top of my head, but I don't. So thank you.

Certainly in the psychotherapy area, by the way, even our journal Psychotherapy, you can find lots of articles about different psychotherapeutic approaches. And in those articles, you're likely to also be able to find, in the literature reviews, statements about a particular psychotherapeutic approach and/or the diagnoses that that psychotherapeutic approach was applied to.

So in terms of improving patient care, we hear a lot about outcomes measures, but another measure is related to client and patient satisfaction. We often don't know, short of getting a complaint... We often don't know about why a client leaves the practice, well, or short of a mutual termination.

Many times what happens is a client cancels an appointment for what sounds like a very legitimate reason. They're going to call you back, they don't call you back in a reasonable amount of time. You may call them back, or contact them. They're not available, they may schedule another appointment, or they say, "Gee, things are really hectic right now, I'll schedule another appointment." They don't.

You may try to follow up a second time, you may or may not be successful. And before you know it, you move on and they move on, and you have no clue really as to why they didn't come back. You just know they didn't. Some of those clients may not come back because they don't need to anymore, and they had trouble saying goodbye, and they just moved on. Some of those clients may not come back for other reasons, and perhaps they're not comfortable talking to you about this other reasons. And they don't get a chance to work that through with you, or you have the chance to work that through with them.

One kind of interesting measure of client satisfaction is, how many clients do they refer to you? Not each individual client, how many do they refer, but in general. What percentage of your practice, if you have an outpatient practice, comes from other clients?

So if I have a child-based practice, and I see that over a year, I have two other cases out of a 100 that were referred by friends and family who were other clients of mine. That's very different, two out of 100, than if I have 22 out of 100. If I have two out of 100, I might ask myself, gee, how come it's not higher? Is 2% the right number for that?

Or would I expect that more of the referrals would come from other people in the community that say, you know, "I saw Dr. Zimmerman, and I was really happy." And you're looking for someone for your child and you might want to take your child to see Dr. Zimmerman.

So I might ask myself, gee, is an indirect measure of client satisfaction, the amount of cases or the referrals that come with another client's associated to them?

But, you also can have a very quick (you don't have to have a 35, 50,100) question survey. You could have a very quick survey that's--I've even seen it on the back of a postcard--that is handed to, if the

client is there for a last appointment, would you mind filling this out and dropping it in the box, and there's no name on it... Or, "Fill this out and send it in to us without a return address on it, without your name." And it asks a few, very easy, quick questions. Circle, put a mark on the line, what have you...

And you can ask a number of questions that are very, like four even, that may give you some really pertinent information. Were you happy with the services that you got here? Were you happy with the clinician you saw? Were you happy administratively, or the administrative services? Were you happy with the physical layout or design of the office?

You may ask questions that you're interested in knowing. And you might not just say, "Were you happy?" You might word those questions in a way that's appropriate for the type of survey, but to assess those kinds of things.

But what happens with this report that's two inches thick? You can't make heads or tails of that, and you can't really use that on a regular ongoing basis.

So let's talk a little bit about using a dashboard. We call it a dashboard because it is a summary of data that has perhaps many different kinds of data on just a few sheets. I'll give you an example, in a moment. We're going to spend a good chunk of this segment on looking at a dashboard and looking at it from many different angles.

Its advantages are that you can track data within a year, across years, across clinicians. You can track different types of data, outcomes, productivity, referral patterns...lots of different types of data.

The disadvantages are that, if you're not careful, you rely on it. [LAUGH] Or you rely on parts of it, because when you look at it and what I'll show you in a moment, when you look at it, sometimes what appears to be the case isn't the case when you look at the numbers. So your first impressions looking at a dashboard may not be correct, and that gets back to this issue of intuition and just how it feels.

I was consulting to a practice some time ago, and they said to me, the owner said, "I'm really upset because my clinicians aren't out marketing enough." And I said, "Well, before we talk about that, would you mind sending me...," and I asked for data.

And we looked at the data and the clinicians, if they marketed more, the practice would be losing more money. Because on every unit of service they were losing money. And if they had more units of service, [LAUGH] excluding some other potential changes, but if they had more units of service, they'd be losing more money. So the practice owner was actually underwriting the practice from their own personal funds and not realizing it, and just wanting people to market more.

So we have to be careful in terms of how we look at the data to make sure that what our first impressions are, are really borne out by the rest of the data.

So let's look at a sample dashboard. So I hope you can see this, I'm sorry that the numbers are small. I don't think we can blow it up more, but I'll walk through it with you and I'll tell you what the numbers

are. You don't have to write them down, you don't have to do any math, and some of them I'll just downright skip over.

So over here, in this first column, you see the overall income and expenses for this practice, as of the last full year. Usually, I recommend using a calendar year just because we're used to it, but you don't have to.

So in this practice they collected $300,000. They had expenses of $200,000, not including the owner's compensation. Some of those expenses, $86,750 went to professional staff, $50,000 went to administrative staff. (This is a sample, it's not a real practice...) Other office overhead was $63,000. That gave them $100,000 net.

So they brought in $300,000 and the practice owner, including the work that the practice owner did, netted $100,000. Which meant that their overhead was two-thirds, and out of that two-thirds there was about a 38% was administrative overhead. So that you get in this first section.

If you look at by visit, they had 2,500 visits in the year and they averaged collecting $120 per visit. Some of you may say that's high, some of you may say that's low.

And their average expenses per visit where $80, which meant that their net per visit was $40. That's what came in as a net per visit. The other practice I was just mentioning, imagine if this $40 was minus $7, times 2,500 visits, [LAUGH] how can you sustain that? But this practice has $40.

If they look at their billings and collections, they have a total billed of $400,000. They adjusted out $100,000 and that's how they got to the income of $300,000.

So, this practice has a certain number of cases in managed care, certain amount of bad collections, also, and they adjusted out a $100,000 so they wound up with $300,000.

Their collection ratio was 75%--75% of what they billed actually came back in to them. They didn't use their contracted rate of billing, they used their overall rate of billing, and 75% came back to them. They wrote off 25%. The average billed by clinician was $160,000, the average collected per full-time clinician was $120,000.

If you look at that by visit, the total number of visits was still the 2,500, the average billed per visit was $160, with collecting the same $120 per visit.

The average number of visits per clinician is 1,000. Now, that's a full-time equivalent. There are about 2,080 hours in a 40-hour work week. Here we have clinicians that are, the average number of visitors are 1,000. No way am I suggesting that a mental health professional should be providing billable services for 2080 hours over the course of a year.

I think at a certain point over the course of a week, your effectiveness is going to drop off and you actually might be worse than effective [LAUGH] than just not effective. But if you take the 30 hours a week and you multiply that times 46 weeks of the work year, that is, vacation, snow days if you're in the

snow belt, sick days, etc., and you just say, well, there's a 46 weeks over the year that we can make billable income on the average, that gives you 1,380 hours, available, if they were to do 30 hours a week.

30 hours a week would bring you a 38% increase in income. And that would be over $110,000 more to the bottom line, that's not exactly trivial. [LAUGH] Some of that might go to a minor increase in expenses, you might have more billing costs and that sort of thing. But most of your fixed expenses would be covered.

And yes, some, you need to account for what you're paying your professional staff, as well. But if you took $110,000 or $114,000, and you paid half of it to your professional staff, you still have a lot going towards your bottom line.

If you look at their accounts receivable in this third column, their accounts receivable doesn't look too bad: 4,500 in 0 to 30, 3,500 in 31 to 60, 2,000 in 61 to 90, and 91 to 120, they have 4,000, and 120 and more, they have 5,000 with a total of $19,000 in accounts receivable.

And if you're looking at this quickly, you might say, okay, that's pretty good. We billed out $400,000, we collected $13,000, and we have less than $20,000 outstanding, let's not worry about it.

But, if you look at the accounts receivable, what you see, is that out of the $19,000, 2-, 4-, 5-, 11,000 of it is old.

And I think old is if it's older than two months it's old. So it's 61 days and older. So there's a fairly high percentage that's old, and most of that is old old. [LAUGH]

I have a little granddaughter that she says, "last last." This is the last time, and then she says, "Can there be a last last?" [LAUGH] So this is to my granddaughter, it's old old.

[LAUGH] So there's 120 days that's $5,000 of which is at 120 days or more. What's the likelihood that this is going to be collected? So out of the $19,000, maybe there's $8,000 that's going to be collected, $11,000 is not going to be collected. I don't know about all of you, but I know for most of us, $11,000 is not, oh, no problem. $11,000 on the bottom line is a lot.

But the tendency might easily be to not pay attention to this, because, look, we brought in, we billed 4, we brought in 3, and this is less than 20. $20,000, we brought in $300,000, why are we even bothering with it? Because it's still $11,000.

What's going on, that that money is just getting bounced back and back on the accounts receivable list, it's not getting taken care of. I'd much rather see it where it's, you know, 5, 4, 3, 2, 1. [LAUGH] Perhaps have the same total, that math doesn't necessarily add up, but perhaps have the same total.

But have them go highest, next highest, next highest, and down to the most aged accounts receivable being the lowest number.

Finally, on this one sheet, [LAUGH] a lot of information here. Finally, on this one sheet we look at origination. You had 100 new cases that came in, you had two and a half full-time clinicians, including the owner. The average number of new cases per clinician is 40 then.

And out of the $300,000 that was collected, divided by 100, it's not a perfect measure because of the time lags, but just as a way of getting some number. Dividing the total collected by the number of new cases, you see that you have $3,000 a case.

By the way, if each of these clinicians... You take the average number of cases, 40, and I said earlier you had a 46 week year. If each clinician was getting, or the practice was getting per clinician, one new case a week, that would be six new cases per year, times the two and a half clinicians, times the $3,000 a case, or $45,000 a year. One new case a week times the two and a half clinicians.

So if production increased a little bit, if origination of new cases increased a little bit, if accounts receivable decreased [LAUGH] a little bit in terms of the aged accounts receivable, we have a lot more income going to the bottom line.

And what does that income do? Does it just go to the practice owners? Maybe, if that's their vision, and maybe not. That income can go to improve the space, that income can go to training, that income can go to compensation of everybody in the office, not just the practice owners. That income can go to benefits. That income can go for lots of things, which can make the practice a good place to work and make the services delivered, services that really meet the needs of the community.

So it's not just about money. I want my clinicians, certainly when I was in a large group, I wanted the clinicians in that group--they're not mine, that was a poor choice of words-- but I want the clinicians in the practice to be happy. I want them to be excited about the work they're doing, because that's going to show up in the work they're doing.

And I want them to feel good about the practice. I don't want them sitting down for a session, being angry with me, or angry with one of the other practice owners, and then trying to fake their way through the session, because they're only, really, half, or a third, concentrating on what the client's saying, [LAUGH] because they're still upset about what happened at lunchtime

So let's look at this same data, but now let's look across years. So year four is the year we were looking at. And one of the good things about a dashboard is you can carry the same dashboard through many years.

Do we have another question?

>>

FEMALE AUDIENCE MEMBER: Hi, I was just curious why you were not including the salary of the person who owned the practice along with the salaries.

>>

DR. ZIMMERMAN: Because the salary of the person who owns the practice is really profits. It is not guaranteed. The person who owns the practice, the compensation that they get, they're the last, they're the caboose. [LAUGH] They're the last person to get paid.

In the practice that was losing $7 a session, that clinician said to me, and I forget the exact number, but I think it was around in the range of like $30,000 a year was the compensation that owner was taking from the practice. But yet the practice was bringing in numbers that were along these lines in terms of gross.

So the owner's income is not guaranteed. And it's only really based on the net revenue available at the end of the year or the end of the month or however you're paying yourself.

>>

FEMALE AUDIENCE MEMBER: It just sounds like it's over or understating the actual profit, because you're negating the contribution of the owner.

>>

DR. ZIMMERMAN: Actually, I'm doing worse than that at some level.

>>

FEMALE AUDIENCE MEMBER: [LAUGH]

>>

DR. ZIMMERMAN: Because I'm including the income that the owner generated, but I'm saying that the net, but the expenses that go to the owner, I'm only including the insurance and other kind of office overhead expenses and saying that the expense of the owner's compensation is not included in that. Because the owner's compensation is only based on what's available at the end.

The expense of the compensation for your clinicians and the expense of the compensation for the administrative staff, that's guaranteed. I either have to pay the clinicians a straight salary, I'm paying them a percentage based on what comes in, and I've got an obligation for that. I can't just say, well, sorry.

But for my income, [LAUGH] I can say, sorry. Gee, there's no money to bring home this week because we don't have the cash. I paid everybody else, but I don't have the cash for me.

So that's a very arbitrary number. In some sense it's what I decide it's going to be, if I include it. Is it $30,000 a year? Is it $100,000 a year? No, I think it should be $500,000 a year. You know, whatever I think it should be... So it's a very arbitrary number.

And instead I used the net, which is really what's left available for that clinician to take, for the owner to take home.

>>

FEMALE AUDIENCE MEMBER: Okay, so these are not incorporated. They're considered like a partnership kind of thing in terms of the taxes and stuff?

>>

DR. ZIMMERMAN: Yeah, I mean, even in a professional corporation, the owners, they may get a draw against the earnings of the corporation. But that draw is still not necessary, quote, "a guaranteed salary." Some practices, if they have enough cash flow may do that and they might say we can guarantee in essence that sort of an earthquake in the practice, we can guarantee that you're getting X and you're getting Y and you're getting Z. And they know what because they've got years of data and years of cash flow. But most practices in my experience, the owners get what's left over [LAUGH] after the obligations are paid. So that's where that net comes in.

So, if we look at performance across years, it looks like on the first line, this practice has really taken off. In year one, they billed out a $150,000 and collected a $112,000. That has steadily gone up to the year four, which is you remember they billed out $400,000 and collected $300,000.

If you just looked at row one and two, you might say, that's great, let's go home. This is a wonderfully successful practice in four years they've gone up, they've more than doubled the amount they've collected. And we might say that's tremendous.

But let's look a little further and not just trust that initial impression that the data seemed to indicate. If we look at how much they've adjusted, the fourth row, in year one, it was $40,000, and it progressively went up to $100,000. So they're writing off a lot more money.

And if we look at the net, this line over here, four lines from the bottom if you have this printed out... In year one, they had a net of $67,000. And in year four, it went up to $100,000. That's in the right direction, but it's far less than the total that was collected. And the differential there.

So you might say, gee, this practice is really much busier, so the practice is really growing. But the net is not keeping up with that.

If I graph this out, and if we projected it out another number of years, eventually we might assume that the net would stop growing and be flat. And we might assume a number years later, uh-oh, the net might be going in the wrong direction. But yet we're having a practice that's growing and getting busier, and more money's coming through, and it looks great on line one and two. But way down here, it's not looking as great, even though it's in the right direction.

Part of that is if we look at the overhead ratio, what happened? It went from 40% to 67%. Administrative overhead didn't go up, it went from 40 to 38, but look at the profit ratio, it went from 60% down by half, almost.

So that top half of this dashboard would say, we got some questions we want to answer here. What's going on in this practice? And we want to delve down deeper, and we will.

Let's look at what happened in the visits. Remember, in year four, we were at 2,500 visits. In year one, we were at 1,000. Again, we are much busier, two and half times busier. We're billing more per visit even, we went up to $10 per visit in the four years. Probably nothing to write home about. But if we are rather heavy in managed care, at least we didn't go down.

And somebody in our last segment asked about renegotiating managed care contracts and being able to negotiate for increases. Sometimes the managed care companies do that in reverse and they come to you and they say, "Oh, by the way, in 2018, we're decreasing our reimbursements. Sign here."

And you're then left with deciding, do I stay in or out of that panel, even though they're renegotiating the contract to pay me less for the same services I provided last year in an environment that presumably cost more to provide the services, because my expenses went up.

Our dollars collected per visit went from $112 to $120, although, in year two, it was at $123, and in year three, it was at $130. So our dollars per visit did one of these. Still a little higher than it was in year one...dollars collected.

Look at our expenses per visit. It went from $45 to $80 in the four years. And our net per visit, while it's at $40 in year four, our net per visit was at $67 in year one. So again, the business grew, but the net shrank.

And what we also can see is that, even though we've had more full-time clinicians, we started with a total of one, we have these other part-time people in addition to the owner and we're two and a half. Everybody's working at exactly the same number of visits per year, so, there's no increase in productivity. We're still at that 1,000 visits a year against the 2,080 potential hours.

Even just looking at that number, I might start to question, gee, when are we offering these visits? Are all of our visits 8-to-5?

>>

AUDIENCE: [LAUGHTER]

>>

DR. ZIMMERMAN: Could we potentially have more work if we offered visits outside the 8-to-5 hour? When new clinicians join a practice, they usually experience their case load filling from the outside in, in terms of their calendar. My 8 o'clock and 9 o'clock in the morning and my 4, 5, 6 o'clock in the evening appointments fill and my 11, 12, 1 o'clock, 2 o'clock, or 10 to 2, those appointments are slower to fill. So they wind up getting this kind of outside-in appointment scheduling pattern going.

What would happen if we offered some evening hours?

What would happen if we offered some hours at 7 AM? A lot of people don't want their work to know that they're going for counseling and/or for psychotherapy. And if they have a 7 AM appointment, they can still get to work by 8:30, and if that's okay, they're still maintaining their confidentiality-- as opposed to I have to leave work at 10 o'clock because I have an appointment.

If you have an appointment every week at 10 o clock or every other week at 10 o'clock, that's starting to interfere with your work. If I have an appointment and I don't need to be to work till 8:30 and I have an appointment at 7:00 in the morning, I'm still at work at 8:30.

So let's shift and look at accounts receivable, because we're still trying to figure out what's going on in this practice and why some of those patterns look as they do,

By the way, remember if you have questions or comments to please send them in, we have about a half-hour left, okay.

So if we look at accounts receivable... Now some things start to show up. Remember, well, this is by fiscal year, so in accounts...

Let me start over. If we look at accounts receivable, we start to see some things as I was saying. First of all, we see a dramatic increase over the four years in the bottom line of accounts receivable. It went from $5,750 to $19,000.

Now, as we said, the $19,000 doesn't initially set off alarm bells given the $300,000 that came in, but in my way of thinking, this sets off alarm bells. How come they went up so much?

And if we look at those across fiscal years, look what we see in fiscal year four. We see, again, this two, four, five number in the 60, 90, and 120 days. We see that especially the 90 and 120 days accounts receivable are much higher.

Now, some people might say that's because everything gets kept pushing , pushing into the next year, into the next month, and therefore, and there's no write-offs, so it's getting larger and larger and larger.

Well, at some point I think you do need to write off your uncollectables, because otherwise you have no clue what this means. But if the write-offs have been, if the uncollectables have been written off, if the adjustments are written off, and they're not looked at as uncollected money... It's money you weren't entitled to. It was a contractual adjustment, let's say, with a managed care company. You aren't entitled to that money.

>>

AUDIENCE: [LAUGHTER]

>>

DR. ZIMMERMAN: And if this is still what's left, what's happening here in our billing office? What's happening with our clinicians? What's happening with people paying their co-pays or what their

obligations are at the time of the visit? How come things are dropping into these buckets that are more aged?

And if we look at the percent of the total outstanding for those of you that like ratios, then we'll get the percent of the total outstanding... And you look here, you just add these two numbers. We went from 22% in fiscal year one being 91 days or more to 47% in year four. So we've had a huge shift in that aged balance.

If we look at the number of new cases, we see that we've got great progression in new cases, we went from 30 to 100, and that looks really good. And again, if we had that number up top, on a four-year trend, we'd say, looking great.

New cases per clinician have gone up from 30 to 40. Remember, it's not 46, just one case a week, it's still less than one case a week.

But look at what happens if we tie these numbers to the collection numbers that you saw on another slide. We go from $3,733 collected per case down to $3,000 per case. So we're seeing more cases. We're seeing more new cases. We're not working any harder. It's the same 1,000 hours of service delivery, but we're making less money on the cases we're seeing. Sustainable, or not sustainable?

>>

VOICE FROM AUDIENCE: Not long-term.

>>

DR. ZIMMERMAN: Not long-term. And make this work for 40 years like this? [LAUGH] 40 years to the desert, 30 years, make this work... I don't know where a biblical reference came from. [LAUGH]

>>

AUDIENCE: [LAUGHTER]

>>

DR. ZIMMERMAN: Sorry APA. [LAUGH] Sustainable? Not long-term.

I think the 40 years came from a career of 40 years or 50 years.

Let's drill down further. So hang in there. We're getting close to the end of the dashboard, but let's hang in there.

Now, we're going to look at each clinician. And this, I think, really starts to show something. To begin with, the owner of the practice is "Self," and he or she is full-time clinician.

And these other three clinicians are part time, 0.4, 0.5, 0.6. Which you often see in a small group practice. These other clinicians have family obligations. They have other jobs. They're in part-time practice. Their days of the week are different in terms of how many days they're on site.

And if we look, we see that clinician number three, excluding Self, clinician number three bills the most at a 110,000, compared to one and two, which are at 60 and 80 respectively.

Clinician number three also collects the most. Clinician number three collected $65,000 against the 110. And clinician one and two each brought in $50,000.

So you would say clinician number three has really brought in most of the staff, the professional staff.

But if you start to look at the next line, collection ratio. Clinician number one brought in 83% of what they billed, clinician number two, 63%, clinician number three, 59%.

If you only looked at these two numbers, in this row over here, you might say, the person I really want to congratulate and give some incentive to, I'm going to pay for their massage, I'm going to pay for their parking. I'm going to maybe increase their compensation ratio, if they're being paid on percentage. I want to give clinician number three that incentive, because look at the great job they're doing.

Until you crunch... And by the way, the crunching is not crunching. All the numbers I've shown you so far, are addition, subtraction, multiplication, and division. That's all, they're not complicated algebraic formulas, you don't need a computer, handheld calculator. Your smartphone with the calculator will do the trick, a spreadsheet is a lot easier. [LAUGH]

If we look at what each clinician adjusted, we see clinician number one only adjusted out $10,000, $30,000 for number two, $45,000 for clinician number three. And we see that the ratio of that adjustment is less.

We also can see that we're paying clinician number three more, per dollar that comes in, than we're paying the other two clinicians. That clinician is 55% already, then this clinician is 50% and 52%.

So clinician number three is making $35,000 plus. And clinicians one and two are making $25- and $26,000 plus.

So the clinician that's making the most is also the clinician that's not making the most per unit of service.

If we look at the number of billable hours per year, clinician number three is working really hard. 700 compared to the other two, but they're working more hours. 700 units against 375 or 525.

Number of billable hours per workweek... We see that clinician number one is at 8, clinician number two at 11, clinician number three at 15.

But clinician number one is working 4.1 hours a day, when they're there. Clinician number two, 4.6 hours, clinician number three, 5.1 hours.

So clinician number three is working 0.6 of a full-time equivalent, and is working one more hour a day than clinician number one.

Clinician number one is billing more per visit, and collecting way more per visit. So clinician number one is collecting $133 per visit, compared to the $93 per visit that clinician number three is bringing in.

We're actually paying clinician number one... I mean, we're bringing into the practice for clinician number one, more money per visit than we're getting from clinician number three or two.

And if we look at the net to the practice per visit after the administrative expenses, we see clinician number one is at $21, clinician number two is a break-even at $0.11. [LAUGH] And clinician number three is actually losing money per visit.

We went from saying, way to go, keep it up, here's your incentive, to saying, uh-oh, we have trouble. Because we're actually losing money when we factor in our expenses on clinician number three.

Let's look at why. If we look at the accounts receivable by clinician... So you can see we're drilling down, and drilling down, and drilling down from our first dashboard now to this fifth dashboard. And I think this is the last. We're drilling down, we're drilling down, we're drilling down.

If we look at accounts receivable, we can immediately see that clinician number three stands out with $12,000 plus. Compared to less than $1,000 and $4,000 for the other two clinicians.

And also compared to Self. I haven't really spent much time on Self, which I could have, but we have limited time.

So, clinician number three is way out of line with the other two clinicians, and out of line with Self.

And if we go back to our 90, 120 days, remember from last slides... Clinician number one has some trouble here. More so than clinician number three.

So we might say, hum, we may need to talk to clinician number one about their 61%, but really that's $500. So it's not necessarily so out of line percent-wise, it is because we're talking about $825.

But if we look at clinician number three, 55% of their outstanding money, so that would be over $6,000, 55% of their outstanding money is 90 or 120 days old.

Yes, we have a question.

>>

FEMALE VOICE: Hi, as I look at the table, it looks like there is an anomaly. Therefore, clinician number one, the 91 to 120, is much different than what that person has before and after.

So my question would be, is there like one person or, you know, something specific that happened there? Do you see what I'm saying?

>>

DR. ZIMMERMAN: Yes, the problem with clinician number one's number is it's a ratio, the 61%. So this $500 may be one client, it may be a number of clients that have $20 or $50. But it's a high percentage-wise, because of the 825 in total.

>>

FEMALE VOICE: But the others are the number of days. You see how for 0 to 30 days, it's small, 31 to 60, I understand 91 to 120, but you go to greater than 120, and it's back down to 9...

[CROSSTALK]

>>

DR. ZIMMERMAN: And it's back small, right, because this 500 is pushing this number way up for clinician number one.

>>

FEMALE VOICE: Okay, then I'm misreading it.

>>

DR. ZIMMERMAN: So this is the percent outstanding. This is the dollars outstanding.

>>

FEMALE VOICE: Understand.

>>

DR. ZIMMERMAN: So the percent outstanding is $500 divided by $825, which gives us the 61%.

>>

FEMALE VOICE: Okay, okay.

>>

DR. ZIMMERMAN: So that's why that number pops out, but it's really not of as big a concern to me. If I was looking at these numbers for a real practice, this is not as big as a concern as this $12,575 stands out. And as this 55% stands out.

>>

FEMALE VOICE: Um-hum...

>>

DR. ZIMMERMAN: Okay?

>>

FEMALE VOICE: Yeah, I think I just focused in on what happened then.

>>

DR. ZIMMERMAN: What happened there.

>>

FEMALE VOICE: Yeah.

>>

DR. ZIMMERMAN: And it may be that that's one client. And you, as a practice owner, might say, okay, we understand that's Mrs. Smith and she's hit hard times, and we're letting her balance accumulate and it's not a problem.

So you might have to dig down even deeper and look at your accounts receivable reports, and, if you look at them, and see, okay, oh, that's that one case and we got that, we understand that, that's not an issue. We're willing to let that ride.

Again, you're not just going on intuition here. You're going on what are the numbers telling us and let's make sure that we're looking at them carefully

Let's do the one other number here and let's look at origination.

Clinician number one, themselves, this is not as a per FTE, brought in 10 cases over the year, 15 for clinician two, 20 for clinician three, and Self only brought in 15.

If I'm going to spend a little time on Self, I would say, how come as a practice owner, I'm not bringing in more cases? If anybody should be the rainmaker, if I'm the practice owner, it should be me. I should be bringing in more cases. What's happening there?

And maybe that 40 to 46 number that we were talking about earlier, I could fix that whole thing if my number--15 cases in a whole year? What if my number was 46? [LAUGH] Alone. I'm full-time, what if my number was 46? That would fix a lot of the origination issue, just my number.

But be that as it may, if we look at average collected per case, I'm doing pretty well. But I may be special because maybe I don't have as many managed care cases. Maybe I do a certain kind of niche practice, a la our other segment today or in the series.

But if we look at our other three clinicians, clinician number one is averaging $5,000 a case, clinician number two $3,333, clinician number three, $3,250.

So we need to be attentive to what that impact of the accounts receivable is on the overall income and viability.

So why are we losing money on clinician number three? Perhaps because of their accounts receivable, perhaps because they're not originating enough new cases, perhaps because of their productivity. Perhaps because of everybody's productivity. And including Self's origination. You're not immune because you're the owner of the practice.

We have another question?

>>

VOICE (OFF MIC): Yes, so these three I think are pretty similar.

>>

DR. ZIMMERMAN: Okay

>>

FEMALE VOICE (READING): The dashboard data you discussed is so helpful. I currently use QuickBooks. I'm wondering if there is any other software that you have found to be even more helpful/easily applicable to a mental health practice for these financial tracking purposes.

>>

DR. ZIMMERMAN: I have, and at the risk of sounding like an advertisement, personally, I use Excel, but any spreadsheet that you're comfortable working with. QuickBooks is really important for your accountant. And it can help you, not so much from accounts receivable...

I personally find the billing on QuickBooks to be difficult, personally, maybe I don't have the right training for it.

I have found that if you use a spreadsheet, like I said I use Excel... But if you use a spreadsheet, you can do all of your billing on that spreadsheet yourself. You can even have the spreadsheet formatted so it prints out as an invoice, and it can take you less than a minute per charge. It also can do this stuff, [LAUGH] and create all of your dashboards.

I don't believe that QuickBooks can do that. QuickBooks is important, though, to look at your accounts payable. Yes, it'll track what money's coming in, but you may just make that as a gross deposit, not differentiated by client. You can make it just as a gross deposit.

But equally important, or more important, it's going to track better than you'll track in another vehicle all your expenses going out. So if you wanted to drill down on that expenses number, what happened in the expenses? Yes, you can quickly find how much of that maybe went to payroll. But if you want to look at your administrative expenses, you could then drill down pretty easily in QuickBooks by getting a report in terms of the categories or the account, they call them account.

It's confusing because they call each checkbook, your account, and then they call each, what I would call a category, your account, as a separate account. Those are more accounting terms, and it can get confusing when you start to learn accounting terms and you're not an accountant. Because things that you'd expect to be pluses or minuses sometimes and minuses or pluses.

So your QuickBooks can help you, though, drill down and to say, Gee, did we spend more on our computer services this year? Are we spending more on entertainment or more on marketing? How come our expenses are higher this year?

But for day-to-day management of this kind of a dashboard, I think you don't have to be an Excel expert. You can be an Excel rather novice and you can create spreadsheets that can do a lot for you.

I created mine for my own practice from, in ancient times, [LAUGH] we had what was called a one-write system. And there are actually some medical and healthcare offices that still use it. A one-write system, each client had a card that was five by like eight and a half, kind of half a page, I think that's right... But it had a card and that card had all their accounting on it. And you put the date, the visit, how much you charged, how much they paid. If you got a check in, how much you got in. And you'd keep a running tally on the side.

Your spreadsheet can do that and you don't have to do the math. And it takes very little to type in the date, the service, what was billed, what was paid, and it'll even figure out what was still owed on that session, and down here, what your overall account balance is.

So I use the spreadsheet, you don't have to use Excel.

>>

FEMALE VOICE : Okay, so we have two other questions that I believe were similar to the one that you just answered, but I think it's important to still ask. So I'll read them both and then you can...

>>

DR. ZIMMERMAN: I'll maybe answer them together.

>>

FEMALE VOICE (READING): (Yeah, I think so, yeah. Okay.) "So at the risk of asking you to endorse some products/software, would you be willing to recommend the name of practice management software that you have had good experience within a group practice setting, as well as credit card processing providers? " That's the first.

And the next is: "Can the presenter suggest resources that will help a fellow practitioner or small group access this type of financial data/dashboard metrics?"

>>

DR. ZIMMERMAN: So the answer to the first... I'm going to answer them separately. I think the second question is more like the first.

Of these last two, I would say some type of spreadsheet that you're comfortable using, whether it's Excel or Google Sheets or what have you. The one thing that you do need to be careful with in terms of those spreadsheets is where they're located and what kind of backups you have. And what information is on them, and how much of that information is in the cloud.

So, for example, if you have patient names and other protected health information, because it's your billing spreadsheet, and that is just put up on Apple's cloud, or is put up on Google docs, and you don't have any type of HIPAA agreement, business associate agreement, you may be in violation. I don't want to claim you are but you may be in violation.

There are cloud resources that will sign a HIPAA agreement, business associate agreement with you. Google will do that and charge for that, not a hefty charge, but a charge for that. Microsoft Office 365, depends on which Office 365 product you buy, but they will do that. And then there are some others, I think Box, not Dropbox, but Box is another one.

But you have to have like, or pay for, three users. And I think Dropbox, I'm not sure if they've started doing that, I think they might have a version also, you pay more for it. I personally use the Microsoft.

One issue with cloud services has to do with the redundancy, as well as the security. So, if your cloud provider has all of your data in one data center, and there's an earthquake, you're toast. Now, if I have all my data on paper in my office in a locked file cabinet that's not fireproof and there's a fire in the building, toast again.

But nowadays, there's a lot of redundancy out there. So that you can sign up to have your data online in a protected environment, and know that your data is not just in one location. But it may be in 50 locations, and if there was an earthquake in location number one, location number two through ten might be spared.

Also, if you travel a lot to other countries, sometimes the issue of access is important. And there are some online organizations that are not accessible, or may not be accessible in other countries, depending on the country, and some that may be accessible all over the world.

So you want to look into that as well. Because if you can't get to your data center but need to look at a patient's file in an emergency, and you're online trying to look at it, that could be a problem. So you need to check with your electronic health records company or whoever is doing your billing or wherever you're housing that data, if you house it on the cloud.

If you house it on your own device, what happens if you drop your device in the bath tub, in the water? What happens if your device gets loss or stolen? So you do need to be careful about the security of that.

In terms of other software that's already available, whether it's regard to billing or electronic health records, I really wish I could say, use this one. I will say to you, look at a bunch of them, and if you're thinking of using them, use a bunch of them.

My wife's also a psychologist, she's also in independent practice. We're not in practice together, although we're in the same offices, but we're not in practice together.

I used a spreadsheet on my laptop. And now in the cloud on Office 365 with the HIPAA agreement.

She uses an electronic health record that does the credit card processing and it also includes her accounts receivable. And she loves it. I won't name it because I don't want to say that I didn't love it.

>>

AUDIENCE: [LAUGHTER]

>>

DR. ZIMMERMAN: [LAUGH] Okay, it just wasn't for me, it didn't work for me. It wasn't that it was so expensive, it's just I found it cumbersome, and I found what I was already doing to be so easy for me and a no-brainer. If I said to her, "Honey, use Excel, use the spreadsheet," it never would happen. She needs the structure of the program.

Also, your practices aren't all alike to one another. You may have special needs in your practice that you want your data a certain way.

Virtually every program has a trial, a free trial. Don't use real stuff, real data, make up John Doe and Mary Smith and what have you, and start to use that.

If you have a billing person in your office or receptionist, an assistant who does some of that work for you, have them use it. How easy is it? Look at what reports it generates. How easy is it?

This is where intuition is important. How intuitive is it to create those reports? What's your learning curve?

Also a very important question...to ask, is when you leave them, what data can you get back, and in what form? And I see that that question is not asked a lot, and people have headaches to nightmares [LAUGH]... Depending on, eventually that company closes, or gets bought, or their prices go up, or they don't provide the service they promised they would provide--and they leave or you want to leave.

And then you say, I need my data. Do they give you paper data? And you have all of your accounts in this pile of paper for the last seven and a half years, or do they give you data on a disk? And if they say, Oh, no, we give it to you on a CD. A lot of computers now no longer take CDs.

And when they give you that data, what format is it in? Is it only read by their proprietary software? [LAUGH] Is it easily convertible to some other well recognized spreadsheet? Is it all text information, and the numbers and the formatting are all gone?

I actually was involved in a conversion in one company, and they got the data from old company to bring it to new company and there was a field problem. And by that I mean, that the data were off by one space. Well, if that space is the last number of a birth date year, if that space is the cents column, if that space is the first number in the birth date year, if that space is the last or first initial of the first or last name, you wind up in a lot of trouble.

So make sure you ask lots and lots of questions.

I'm going to rush through some of these slides because these questions and my going through the dashboard has taken some time, and we're a little pressed for time.

Embezzlement happens, you need to make sure you have policies and procedures in place so that it doesn't. People have lost tens or even over $100,000 because of embezzlement. It does happen.

And loss happens for other reasons, as I mentioned earlier.

You can have checks and balances in place to really look at tracking your income, the sources and types of it, tracking your expenses, using some of the standard reports that we were talking about, that QuickBooks or Quicken can give you easily. Your billing software should also give you reports so you can easily look at the drill-down in you accounts receivable and know which accounts you really need to focus on, and which ones you don't.

I believe in your business relationships you should trust, but I don't think you should trust like back in the 60s with a fallback with a trust fall. I think you should trust, as my mother used to say when we were teenagers, she would sleep with one eye open. Because she would want to know what was going on while she was sleeping and her teenagers were still awake.

I think you want to run your practice, trusting with one eye open. You don't want to just give all of that away but you want to make sure that you have a sense of what's happening in the practice. And that you can easily and routinely be able to check and make sure that you're on top of things, financially. It's your practice.

And you don't want to do the strategic planning, we addressed this as we went through today, just by the seat of your pants. You want to use those numbers.

What's it going to cost me to put this program together? What's the likely ramp up time?

It's not going to start off where I expect it to be. Even in year one, it may start off very slowly.

And am I growing that practice and anticipating that growth? And there a spreadsheet also can come in handy, month 1, month 2, month 3, all the way to month 12, here's the projected income and that number changes as well as the expenses.

The strategic planning can help you build programs that your community needs.

I just want to round out as we close that the idea is how do I provide the needed services to the community and have a sustainable practice. Your practice and the community deserves responsible care taking. That responsibility is not only in terms of the clinical delivery of services, but that responsibility is also in the health of the practice itself as a business entity.

And making sure that you're not just guessing, but making sure that you've got metrics in place, that you've got processes in place, that allow you to do the measurements, whether it's outcome measurements or some of the financial and productivity measurements that we were looking at.

The investment does not have to be hugely time-consuming. You can track even when cases closed.Now where did those cases come from? How many visits over what period of time?

And you could see some of these numbers may not be fully writ with scientific rigor. It doesn't always have to reach the level of a journal publication in terms of giving you useful information, but it can still give you that useful information. It needs to be doable and implementable, able to be implemented.

And the work involved is worth it. The people you serve are worth it. The practice you've invested in are worth it. And you're worth it.

So thank you very much.

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