| fInAnCIAlMAnAGEMEnT | pracTice managemenT
The majority of physicians have a
familiarity with a profit and loss statement. Unfortunately, the amount of time spent reviewing this is usually minimal and focused only on top- and bottom-line numbers. The numbers in between frequently tell the real story of the practice and physicians should spend more time understanding these. Spending hours evaluating and
re-calculating the numbers is not productive; rather, try to understand the larger, individual line-item expenses. Typical large areas include payroll, rent, medical supplies, and marketing. These line items are areas that represent an opportunity to increase efficiency and eliminate wastage. Once the larger items have been scrutinised, attention can be turned to the items lower on the list. Table 1 (overleaf) provides a quick
reference that can be used to compare your practice’s financial performance to the key benchmarks of the Allergan/BSM consulting financial database. The table includes the mean and median values for the key benchmarks from the years 2006, 2007, and 2008.
Cosmetic medical practice benchmarks: income One of the biggest challenges faced by practices when trying to measure financial performance is obtaining reliable data. There are many sources of data, but most physicians do not know where to access it or how reliable these are. Most practices rely on the data from the Allergan/BSM Consulting Groupfinancial Benchmarking database, which have been collected from actual financial documents, tax returns, payroll summary reports, and practice summary reports. The data come from dermatology, plastic surgery, facial plastics, and oculoplastic practices; are verified, published every year, and shared freely with the industry. The net collected revenue (or top-line
number) is classified as all monies received by the practice during the fiscal year by way of professional services, facility fees income, and spa services. Essentially, it is the money the practice has brought in before expenses. The utility of the top-line number is not as pertinent when making comparisons
because of the range and types of practices. Many practices also have mid-level providers and aestheticians who contribute to the practice revenue. Therefore, a direct practice comparison is not the most accurate method to measure performance. for this reason, key contributors will be examined on an individual basis in order to compare ‘apples to apples’.
Net collected revenue per FTE physician A full-time equivalent (fTE) physician is classified as a physician who works 1600 hours per year, or 4 days per week. The total net collected revenue of the practice is divided by the actual number of fTE physicians working in the practice. The 2008 median range was $1 100 000 to $1 600 000. The median is $1 385 389. a The percentage growth rate over 2007 ($1 306 776) was 6.02%. The percentage growth rate of 2007 versus 2006 ($1 244 391) was 5.01%. Many economic factors contributed to
the slower growth rate in 2008. It appears that practices that were primarily
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