Know and improve the status of your practice with line graphs

Is your practice speeding ahead or just cruising? Picture yourself driving into a 25 miles-per-hour school zone. When entering that zone, you notice a police car parked at the curb with its radar pointed right at you. Picture one more thing: You have no dashboard instruments in your car—no speedometer, tachometer, or gauges. Is panic your next move? Do you close your eyes, step on the gas and hope for the best?

The above scenario is strange. How many people drive their cars with incorrect speedometers, nonfunctioning gauge lights, or instruments out of commission?

Now how many people manage their practices without knowing their speed or progress, how much fuel or cash they have, or whether their practices needs an overhaul? Should they just close their eyes, continue practicing and hope for the best?

Many doctors manage their practices without knowing their statistics. Putting it simply: Without statistics, you are driving your practice with a blindfold.

When I first started practicing, I had no systems to monitor my financial condition or the direction of my operating trends. I had no idea if I was heading for trouble until something broke.

As I started to learn how to gather data pertaining to the proper running of my practice, I discovered that I had a problem. I could not make any sense out of the numbers. To gather some significance from my collection of numbers, I ended up translating them into line graphs

Line graphs provided me with two types of information: 1) what condition the statistic represented at that point in time and 2) where the statistic stated that condition is heading.

Of course, part and parcel of the above information included how well we were doing and whether we were speeding up or slowing down. That is what trends will show you.

It is much easier to correct a problem in its weaker, formative stages than when it has deeply embedded itself into your operating system. By keeping a close watch on your statistical trends, you will have an early warning system that informs you of impending problems. With this knowledge, you will be able to correct your business direction before your practice situation worsens.

Keep in mind that your statistics and graphs are only as good as your data-gathering procedures, so be as accurate as possible. Also, remember that in a line graph, a normal trend is not a level line, it will incline upward.

There are two sides to a line graph. The vertical side (Y-axis) represents position. This could be any unit representing performance such as number of patients, fees collected, or total services. The horizontal side (X-axis) represents time such as days, months, or years.

Before you start plotting your numbers, find the extreme ranges of your data. so they will all fit onto one page.

Line graphs display the relationship between the performance units and time. How these two types of information change and vary will depend on the influence they have on each other.

The direction a data line progresses on the graph is called a trend, which is a statistically significant change in performance data over time. The direction of this data trend is measured and illustrated on our line graph.

Here is an example of how changes in one of these two types of data can influence its trend line.

If I started dropping one pebble onto the top of your head once every minute, the line graph would show one pebble on the Y-axis over a series of minutes on the X-axis. When plotting these two figures during a period of several minutes, you would see a straight, horizontal trend line on your graph.

However, if during one of those minutes, I dumped five hundred pebbles on your head, there would be an upward spike in the Y-axis. You'd have a momentary upward trend before it goes back to horizontal. One piece of data can influence the other and can change your trend line.

Remember these three important elements when plotting your data:

1)    There must be at least three points of data on your chart before you can determine the direction of your trend. It is better if you have more than three data points.

2) When the X-axis is plotted too close together, the sharp peaks and valleys the Y-axis will not give you a clear picture of your data trend. To get an unclouded picture, plot your data further apart on the X-axis.

Figure 1. This data summary sheet shows the first 6 months for the two data sets, services and collections. The numbers from this sheet are then taken and plotted on a chart (Figure 2).

Figure 2. The data shows that there is a difference between services and collections, which represents the fees not yet collected. Ideally, these lines should run closer together. Also, there are times when these two lines become reversed. This happens when you have been running behind on your collections for a sustained period of time, and a surge of incoming fees causes the collections graph to run above services. Normally, the collections will lag slightly behind.

3) Keep in mind that weekly data swings are informative but not necessarily conclusive. Monthly graphs will give you a better trend picture. Try not to make decisions based on weekly or even monthly trends. Look at an entire quarter before you make any significant changes.

Finally, like those gauges in your car, the information they tell you is only valuable when it is used and responded to, if your responses are proper and warranted. CP

Ivan Delman, DC, is the author of The Business of Chiropractic: How to Prosper After Startup and has degrees in both business and chiropractic. After working 20 years in each field, he has retired to write and travel. Delman’s free Chiro-Biz newsletter and other articles can be found at: www.businessofchiropractic.com. He can be reached via email: ivan@businessofchiropractic.com.