Analyzing the Performance of Your Medical Practice

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Understanding the financial performance of your practice is key to having a solid grasp of your bottom line. The rules are very simple for elective health practices, which makes it easy for you and your team to assess your performance and keep everyone on the same page. Although financial analysis may sound like a hassle, it is one of the most important areas of understanding you can develop to help grow your business. Here are the financial analysis rules you should follow:
"By reviewing your KPIs, you can see where any potential issues may be and make adjustments as needed, so that your practice can experience continuous growth."

Understand How Often to Analyze

Calendar Quarter—You’ll want to assess your financial analysis on a calendar quarter basis for two reasons: seasonality and trend time. Seasonality impacts the elective health industry tremendously. Procedures that are popular in February will be very different from those that are popular in August. Consumer behavior will be different in each season, so you must take that into account.

Similarly, trend time is also linked to the time of year. As a small business, you want to look at trends over a longer period of time to more accurately understand how your business is doing.

There will be ebbs and flows in your practice, especially depending on your location and the current season. So, it’s important to have a longer trend time to help keep these in perspective. Making a decision based on a shorter period of time such as days or weeks could negatively impact your practice in the long run.

Year Over Year—For the same reasons, you should evaluate your finances on a year-over-year basis. As your practice matures, you will have a larger pool of data from which to understand seasonality and trend time. This will allow you to make more informed decisions for how to continue moving your business forward.

Evaluate Your Key Performance Indicators

As always, it’s important to look at revenue, purchases, appointment leads, and more to gain a full financial picture. By reviewing your KPIs, you can see where any potential issues may be and make adjustments as needed, so that your practice can experience continuous growth.  

Conclusion: Seasonality—not days, weeks or months—impacts trends and shows performance.