Finance and Accounting Videos

Peter Lucash: The business plan for medical practices does two things. One, you look to the past to see where you have been, and you also look to the future to where you want to go. Let’s talk a little bit about what you can get from the past and where you’ve been.

You want to look at the kind of activity that you’ve had for the past three years. Look at your three years’ worth of financial statements, both revenues and expenses. I like to look at them on a month-to-month basis because there are trends, there are seasonalities, there are ups and downs which just happen in a normal course of business. And I’ve seen personally of situations where I had to tell a practice where income was down for the month but I kept saying, “Well this is normal. It happened in previous years.” I was able to show that in fact, that was a normal drop-off in revenue in December every year. They relaxed because they knew this was just the way the practice is so they knew it was coming in and prepared for it.

You look at the services by CPT code, both quantity of services and the number of RVUs in total which you are delivering to your patients. This gives you a sense of how the nature of your practice may be changing, how the nature of your coding may be changing or just the nature of how the treatments are changing for the kinds of situations which you see.

Next we’ll look at your facilities and your staff in support of these. Where has the spending been in terms of your office, where has the investment been made in terms of your staff? Then you’ll begin to look at what kinds of skills your staff has, what kinds of skills you need to acquire either by hiring a consultant or investing in training for your staff, or recruiting new people in order to have the set of skills you need in order to move your practice forward over the next few years. Look at the changes in your local demographics. Has your population been aging? Is your population growing? Is it perhaps declining? Are there other political factors going on in terms of regulation or local context issues? And look at the economy. If this is a successful economy, there will be growth, there will be people moving in. Will this be more of a younger population or more of an older population? All these factors begin to play on how your practice is structured today and how you should be structured and situated in the coming years.