Search for New Management System Helps Locate Lost Income

We were brought in when a 100-physician multispecialty with more than 10 practice locations was contemplating a search for a new practice management system at an expensive cost to the group. Our role was to assess and make recommendations, saving the group the cost of a new practice management system by better utilizing what they already had.

Additionally, in 2003, the group was anticipating growth but knew they were unable to handle it given their financial performance. We started with operations and business office management in late 2003. At the time we were engaged, they had $8.6 million in A/R, with 26.11% over 60 days and 19.45% of it over 90 days. The average gross collection ratio was 74.84 and the net was 88.82. Days in A/R were 53.2.

By 2004, we began monthly on-site visits and provided remote business office consultation and management. By the end of 2004, the A/R was down to $8 million with 19.73% over 60 days and 14.79% over 90 days. The average gross collection ratio for the year was 78.09% with a net of 100.21%. Days in A/R were reduced to 41. During the year, they were able to add services and physicians including a hospitalist program. At the same time, their income increased over $8 million from 2003 with limited increases in overhead.

Accounts Receivable Out of Control

A group of over 30 orthopedic surgeons lost a number of physicians in March 2003. They were struggling with basic business practices, trying to stabilize and grow their practice. At the end of 2003, their A/R was over $14 million, 45% of which was over 60 days and almost 38% over 90 days. The average gross collection ratio for the year was 38%, and the net was 91%. Days in A/R were at 74. Ancillaries had been added in September/October but were struggling to produce needed cash flow.

We were brought in at the end of the year for an assessment and took over the business office and operations from January 2004 through August 2004 FT, and through the end of the year on a PT basis. At the end of 2004, cash was up $6.5 million over 2003. The A/R was at $11 million, 23.8% of it over 60 days and 16.14% of it over 90 days. The average gross collection ratio for the year was 41%, and the net was 98%. Days in A/R were at 46. Ancillaries were producing at the anticipated rate as PT alone accounted for almost $5 million in additional income in 2004. Physician income was at its highest ever. Also, for the first time in its history, the group posted a $3 million month and bested it a number of times.

Testimonial: Reimbursement Team, HealthEast Care System – Clinic Division, St. Paul, MN

“Working with EthosPartners helps us achieve our vision of providing high-quality, compassionate and cost-effective healthcare for our patients. The valuable information from VitalStats and customized reports assists us in improving our operations as well as helps us make sound business decisions. Rather than spending our time creating reports, we are able to focus more time identifying opportunities and improving our processes.

EthosPartners is fun to work with and they are very responsive as well as flexible to meeting our organizational needs.”

Testimonial: Christie Woodson, Oklahoma Heart and Vascular Center

“In my career experience the greatest weakness I have witnessed relative to physicians is the lack of understanding of financial position, whether because of time constraints, or not knowing the proper questions to ask. From an earnings perspective, most are doing so "good"; they don't bother to evaluate what it would take to become "great." And while they want to earn a good living from what they are doing, they are not driven by a financial motivation. Earnings are simply a nice byproduct of their work, not the reason they practice medicine.

Fine-tuning aspects of financial performance can add up to substantial amounts of money over time. Most of this fine-tuning is completely transparent from the physician's perspective (such as shorting A/R collection time) and doesn't impact their routine at all. But to fine-tune you have to have an easily accessible database of information. That is where GEMMS Dashboard comes in to play.

The GEMMS Dashboard program is the best analytical tool I have ever seen. Not only is it comprehensive but also simple to use. Even used in a minimal capacity, it can pay for itself by giving you A/R aging information, collection lag time ratios, etc. in two or three keystrokes. Used in its fullest capacity, it is a comprehensive analytical tool, which either you can employ for the doctors, or they can employ themselves.

HVC opened in February 2006 and we added GEMMS Dashboard in October 2006. I wish we'd had it from day one. I hate to think of the hours I spent generating the kind of data in generates in seconds. I think it is the most cost-effective monthly expenditure we have at HVC.”