Financial management of the medical practice / Max Reiboldt.

Format:

Book

Author/Creator:

Reiboldt, J. Max.

Contributor:

American Medical Association.

Coker Group.

Series:

Practice success series

Language:

English

Subjects (All):

Medicine--Practice--Finance.

Medicine.

Practice Management, Medical--economics.

Medicine--Practice.

Medical Subjects:

Practice Management, Medical--economics.

Physical Description:

xii, 158 pages : illustrations ; 28 cm.

Edition:

Second edition.

Place of Publication:

[Chicago?] : AMA Press, [2002]

Summary:

Every business needs fiscal stability to survive, and the medical practice is no exception -- particularly in today's challenging health care environment. Although some of the more complex financial responsibilities often are left to accounting professionals, it is vital for physicians to understand the basic guidelines that can help them monitor the finances of their organizations.

Written by the author of several AMA Press practice management titles, Financial Management of the Medical Practice, Second Edition gives physicians and office administrators the information they need to make informed decisions and set their practice on a sound fiscal foundation. In an easy-to-understand format, the book simplifies financial analysis, outlines steps to assure revenue maximization and expense management, and discusses financial safeguards and other internal control issues. Also included are chapters on budgeting, ratios, and benchmarking -- as well as financial report samples, charts, checklists, and a glossary of financial terminology.

With practical responses to the fiscal realities of health care market demands, Financial Management of the Medical Practice, Second Edition can help any medical practice achieve sound operational processes and fiscal stability.

Contents:

1 Reporting Standards of the Practice 1

Understanding Financial Statements 1

Understanding the Theories 1

Understanding the Purpose 2

Understanding the Practicality 3

Understanding the Effect 3

Reporting Practice Operating Results 4

Financial Analysis Simplified 6

What Is Financial Analysis? 6

Financial Analysis Perspectives 6

Financial Analysis Procedures 7

2 The Revenue Cycle 11

Components of the Revenue Cycle 11

Appointment Scheduling 11

Registration 12

Coding 12

Charge Capture 13

Patient and Insurance Billing 13

Account Follow-up and Collections 14

Other Components of the Revenue Cycle 14

Key Revenue Indices 15

Steps to Assure Revenue Maximization 16

Step 1 Analyze the Practice's Revenue Cycle 16

Step 2 Document Financial Policies and Procedures 16

Step 3 Review the Financial Tools 17

Step 4 Review Managed Care Contracts 17

Step 5 Review the Practice's Current Fee Schedule 17

Step 6 Make Sure the Practice Is Compliant 18

Revenue Enhancement 18

Sources of Revenue 18

Productivity Defined 19

3 Controlling Expenses 23

Expense Management 23

Comparisons of Expenses on the Income Statement 23

Common Sizing 24

Variance Analysis 24

Types of Expenses 25

Direct and Indirect Expenses 27

Staffing 28

General and Administrative Expenses 30

Facility Strategies 32

Medical/Lab/Radiology Supplies 32

Incentive Strategies 33

Flow Source Documents 33

Value-Based Expense Management 33

4 Assessing the Effect of Financial Performance 37

Firsthand Analysis of the Effect 39

Other Indicators to Watch 41

Measures of Productivity 41

Managed Care Measures 44

Variance Analysis 45

Combined Statement of Revenue and Expenses 45

The Effect of Financial Statements on Long-term Financial Management Issues 50

Capital Acquisition and Investment Scenarios 51

5 Ratios and Benchmarking 55

Ratios 55

Key Revenue and Expense Ratios 55

Collection Ratio 56

Days Outstanding in Accounts Receivable Ratio 57

Expense-to-Earnings Ratio 58

Staffing Ratio 59

Visit/Encounter Ratio 60

RVU Ratios 60

Unit or Departmental Ratios 61

Payer Mix Ratio 61

Key Credit Ratios 61

Benchmarking the Medical Practice 65

Productivity Benchmarks 67

Access 67

Coding and Charge Indicators 68

Accounts Receivable Benchmarks 68

Expense Indicators 70

Performance Indicators 70

Benchmarking Sources 72

6 Internal Controls and Safeguards 73

Cash Flow Management 73

Banking Relationships and Bank Accounts 73

Managing Incoming Cash 74

Petty Cash 76

Key Policies Pertaining to Petty Cash 76

Internal Control Issues for the Medical Practice 77

Fraud and Dishonesty 80

Financial Safeguards 83

Deterring Embezzlement Activity 83

7 Budgeting and Pro Formas 87

Budgeting 87

Why Use a Budget? 87

Budgeting Functions and Accomplishments 88

The Total Management System 88

The Budgeting Process 89

Who Should Be Involved? 89

What Information Is Needed? 89

Outside Influences on the Budgeting Process 90

How to Begin the Budgeting Process 90

Developing the Budget Planning Worksheet 91

Beginning the Budget Planning Worksheet 92

Completing the Final Budget 93

Forecasting Patient Volume 94

Forecasting Variable Expenses 97

Forecasting Revenue 98

Final Budget Column Entries 100

The Final Step 101

The Reality Check 101

Incorporating the Budget into the Monthly Income Statement 102

Zero-Based Budgeting 104

Pro Forma Statements 105

Preparation of the Pro Forma 106

8 Supplemental Financial Reports 121

Dashboard Reports 121

Flash Reports 123

Detailed Reports 125

Productivity Reports 126

Revenue Reports 132

Payer Analysis 135

Expense Analysis 136

Accounts Receivable Analysis 138

Personal Physician Overhead Analysis 138

Glossary: Financial Language 143.

Notes:

"American Medical Association."

ISBN:

1579472915

OCLC:

50041570