Average Charge per Visit and Average Receipt per Visit
Key Practice Indicators (3 & 4 of 8)
Well, Good Morning! Here in Denver it’s -1 (as in negative 1) degrees outside after a hard-hitting snowstorm delivered 6 inches of clean, powdery white beauty and left a fine still crisp frigid air in its wake; the mountains sport their new white mantle proudly, shouldering massively up into a bright western sky which glows so deeply blue between snow-draped pillars of spruce trees that I shake my head in wonder: it’s a regal deep blue free of any hint of cloud, beautiful beyond human meaning.
But I digress: we’re here to talk about Average Charges and Receipts per visit, not snowstorms, so I will leave the Colorado Winter out in the cold for now: too cold, if truth be told (I must be getting old).
Average Charge and Receipts per visit are typically bundled together, giving insight into the following:
- Predict cash flow; which in turn allows a Practice to budget accurately
- Measure performance/productivity expressed in a dollar amount
- Can measure differences between providers, locations or insurance plans
- Can measure differences in specialties and sub-specialties
- Over time will show if the practice is trending up or down
- Average payment used to evaluate providers, locations, and insurance plans
- Average payment used to determine appropriate rate for:
- outsourced billing
- staffing for in-house billing
- Provides a measuring stick to give patients estimates of their financial responsibility
- Provides a measure to justify (or deny) adding appointment availability
- Helps reveal trends that an irregular fee schedule (something to avoid) may mask
- Provides a valuable tool to measure changes in:
- Fee schedules
- Contract (payer) rates
- Lines of business/revenue streams/devices or procedures offered by the practice
Fantastic, no? That’s a boatload of information, make no mistake, with a lot of applicable scenarios. These two KPIs are like keeping track of your average mileage in the car. Hey, my gas mileage went from 26.5 to 27.1 miles per gallon over the last 2 weeks. Why is that? Well, I cut out rabbit starts at the stoplight. So hey, I notice that my average receipts are going up. Why is that? A new procedure was added over the last 3 months, so I bet it’s that! Should/could I increase that procedure by having other providers do it? If I do so, will average receipts keep going up? Hey, over time, what are my average charges and receipts per visit? Is it going up? Down? Why? Better/worse Billing service? Better/worse procedure mix?
What combination of factors has yielded this Beautiful Royal Colorado Blue Sky? Snow, Cold, white Blue Spruce, Mountain crags framing small slices of sunlight morning sky… natural KPIs help me find, even love, the answer(s)!