Predicting production

If you run a practice of any size, you want to find problem areas without extensive searching.  If you have a group practice with multiple offices (cheap book plug: advice on building such a practice by clicking here), you absolutely have to summarize results into a meaningful, easily digestible format.

Here’s one report that I’ve found is easy to create, extremely informative and in a compact enough format to keep you from digging through mountains of data.  It’s called the Predicted Production Report and does exactly that.  It predicts what production will be for a given month so that you can make decisions about marketing, staffing and scheduling.

Here’s how it works:

Unlike the stock market, past performance can indeed be an indicator of future results.  So, if you convert consults appointed into production at a rate of 50% on average over a period of months, you can feel reasonably comfortable that will be the average going forward unless something changes significantly about your practice or environment.  Yes, you will have some months at 60% and others at 40%, but on average you’ll work out to whatever percentage is historically correct.  If you need some seasoning on the conversion rate or its components, check out our article here.

With that, you’ll need the historical conversion rate (there are ways to adjust this for seasonality and demand to get a more accurate number, but for simplicity’s sake, you can just use the rate from the last 6 months or last year).  

Now, you’ll need to take the consultation appointments that are on the books for the rest of the month.  For example, this article is being written on September 8 so you will need the consultation appointments for September 9 through September 30.  And yes, I do realize that on September 13, you could have a patient call for an appointment on September 20. So as of September 8, you wouldn’t even know about that patient.  Thus, the total consults appointed number may be a bit understated.  Again, some historical analysis can enable us to refine that number to account for future expected appointments, but we’re going for simplicity here.

Then, take the consults appointed for the future, multiply by the historical conversion rate, add the contracts already signed and voila, you have your expected contracts or production for the month.

For example, let’s say that you have 40 patients on the books for September 9-30, your conversion rate is 40% and that you’ve signed 5 contracts so far this month.  So, you would multiply 40 * 40% = 16 contracts expected from patients currently still to be seen for the month.  Then, add the 5 contracts already signed so get a predicted number of 21 contracts for the month.

Now, if you add a couple of pieces like the actual number of contracts for the same month last year and the number of available slots for new patient consultations, you can do a lot of quality analysis and decision-making.  We’ll dig deeper into that in our next piece.

Until then, please keep sending us any questions or comments you might have by clicking here.  We appreciate all the communication and look forward to hearing from you.