“I’ll take a look at it next week”
“I’ll get round to it in a bit”
“I’ve been meaning to look at that”
The final of those items was said to me last week at a medical conference in London.
I was sitting on a panel facing an audience of physiotherapists and other medical professionals who wanted to ask what made a medical practice successful.
In amongst the various questions was one relating to how to monitor the invoicing efficiency of a medical practice.
To me the answer is simple. Before you can measure any part of a business, you must first establish a standard to measure against. Which is precisely what I said to the questioner. I asked if he knew how many invoices he had raised last month and the total invoiced. Sadly he didn’t know either.
But, I continued, to improve the performance of your practice you must make sure you know to a reasonable degree of accuracy how you are performing. You must then compare with whatever standard you decide is the most appropriate.
Now consider the issue of invoicing with a real MHM example. One of my guys – a private consultant surgeon – saw 25 patients between Monday, January 16th and Friday, January 20th. Therefore I should be able to see 25 invoices. That is a simple but effective control which makes sure everything is invoiced. The standard has been set. One invoice is required for each patient.
If I only have 23 invoices I have a problem!
But it also means of course at the end of January I can add up the number of invoices produced. I can also tell the client how many patients he has seen during January. Then we can compare that number with the number the previous year and see if it is higher or lower. The introduction of such a basic management control isn’t a nicety; it is an absolute necessity if you are going to manage, in this case, the invoicing process or indeed the whole business effectively.
The audience member agreed fully but then the alarm bells went off when he said “I’ve been meaning to look at that for a while now” He hadn’t because there always seemed to be some other problem to deal with.
That tells me his management controls aren’t as robust as they should be. It also tells me he is suffering from one of the worst and easily avoidable causes of business failures out there:
Procrastination is even worse than having a backlog of invoices to raise because it diverts you from identifying a backlog is building up.
It is even worse than having no cash because it distracts you from raising the invoices and thereby getting paid.
Procrastination is the cause of the problem he has because various insurance companies have declined his invoices for treatment as the consultation was more than 6 months ago.