What is Profitdiagnostix - an overview

Historically, reporting accurately in any clinical business has been very challenging, time consuming and inaccurate. It has been impossible to establish basic performance measures because all practice management systems  work differently and produce different reports. The same applies for the accounting software that clinical practices use, with different charts of accounts and different reports depending on the software used and the accountant that is used.

For example: How many full priced consultations should a single clinician be doing per year? Superficially, one would expect that this should be really easy to measure as most practice management systems should be able top produce a report showing the number of consultations charged each year.
However, do you include zero priced consultations, and how do you distinguish between full priced consultations and repeat consultations?
If you were to ask 100 practices for this simple information, about 50% of them would give you the correct value, the other 50% would either include repeat consultations and zero priced consultations.
To make things more difficult, if you were to ask the same question to the same practices a year later, the 50% that gave the correct answer would be just as likely to give the wrong answer a year later - simply because a different staff member collected the information and used different criteria.

With the above example in mind, you can see that when looking at possibly hundreds of business performance parameters, it is in fact impossible to get accurate information about the health and efficiency of a clinical practice with an acceptable level of accuracy.

To correct this issue, a team of accountants, veterinary surgeons and software developers got together to create a solution that would allow clinical practices to measure their performance accurately. To do this, an INDEPENDENT system had to be created that could collect data from any practice management system and any accounting system and produce a consistent set of reports. The system had to give the same result regardless of whether a practice was using Rx Works, Vision VPM, Vetspace or any of the many practice management systems available.

Profitdiagnostix is a business reporting tool that collects data (information) from multiple separate software systems and puts it all together in one place. This allows users to analyse their data by looking in one place rather than having to search for information in multiple software systems. At the same time, Profitdiagnostix may 'clean up' some information to make reports more accurate and easy to understand. Regardless of the practice management system being used by the practice, the reports will look the same. This also allows the reports that are created to be consistent.

For example, 2 clinicians may wish to compare their businesses at a conference. One of them may be good at getting vaccinations through the door, the other may be good at performing a lot of cytology procedures. In this way, they could help each other with their strengths. However, the sad truth is that most clinicians do not even know if they are good or bad at something because the information does not exist in any consistent format. With Profitdiagnostix however, the 2 clinicians could easily see where they are good and where they perform poorly even though they have different practice management systems, different accounting software and a different accountant.

Where is the original data? Generally data that is collected is from 2 types of systems 1) accounting systems 2) practice management systems. 

Why do clinical practices need Profitdiagnostix

Saves on time

Staff performance

Know whether they are above or below average in a particular process

Know whether they are making any money or losing money

Know if there is a serious problem with their customer base

Know if there is a serious problem with their reminder systems

Know if they are billing accurately

What sort of KPI's are important for clinical practices and how do they help to keep these businesses profitable

Active clients

The number of clients a practice has is obviously one of the most important bits of information. But what happens if a practice is 10 years old and it has a list of 5000 customers? Some of those customers may have visited 5 years ago and then never came back. Or all their pets may be deceased by this time. So a static client list is of no use.

Unfortunately no practice management system has 'standerdised' the definition of what an active client is, so most practices do not know how thier client numbers compare to other practices. 

In ProfitDiagnostix we have a standard definition - an active client is a client who has been invoiced a positive amount of money in the last 12 months. This allows practices to know what their true client number is and allows them to compare this value with colleagues and KPI's

Full time clinician equivalents - why is is so important to know what this is

If a practice has 3 clinicians and another practice has 10 clinicians , how do we compare values like their active clients or the number of vaccinations they do?
The 10 clinician practice may have 10,000 active clients and the 3 clinician practice may have 6,000 active clients. Which of these 2 has busier staff?

To compare practices of different sizes we need to estimate how many full time clinicians work there and then divide these numbers by full time clinicians . We often refer to full time clinicians as FTE (full time equivalents) or RPU (Revenue producing units) and then supply a value per FTE.

So the 10 clinician practice has 10,000/10 = 1000 clients per FTE and the 3 clinician practice has 6000/3 = 2000 clients per FTE. The staff of the 3 clinician practice would therefore be much busier. 

By looking at hundreds of practices in this manner we are able to see if these practices are over-staffed or under staffed. In fact, anything over 800 clients per FTE is under staffed, so both these practices would be under-staffed. Unfortunately most practice management systems cannot make these calculations.

To calculate FTE, the system needs to access the wages values  - this is only available in their accounting software which is a different software system to their practice management system.

Average client spend per year

Most practices do not know and cannot compare whether their clients spend enough money at their practice. ProfitDiagnostix can tell them this and give them an idea of what it should be.

For example,in Australia, a practice with 1000 clients has an average client spend of $700 - is this too low or too high? With a system like profitdiagnostix, we can calculate a national average and tell the clinician that it should be $800. So this practice is missing out on $100 X 1000clients = $100,000 in sales.

Cash control - is all the money getting to the bank?

Most practices collect cash at the cash register and check that the amount is right at the end of the day using their practice management system. The money is then taken to the bank and deposited a few times a week. They have no way of checking whether money goes missing between these 2 processes. This is because there is no easy check for making sure that the money collected at the cash register is entered into their accounting software correctly. This makes it very easy in large practices moneytto be stolen or go missing without anyone knowing.

ProfitDiagnostix produces a report that matches the money in the accounting software to the money invoiced at the cash register.

Wages - are they too high or too low

If a practice makes $1,000,000 in sales every year and it pays $400,000 in wages every year, is the wages value too high or too low? ProfitDiagnostix can compare this to the national average and tell business owners if their wages are higher or l;ower than average.

Client facing events and opportunities - how often is a clinician in a consulting room with a customer

One of the main factors that determines whether a clinician can promote a health service is: how often is that clinician in the consult room with a client?

This should be easy to measure because in it's simples form, this would be the sum of all consultations, repeat consultations and vaccinations.

However practices split these fees into hundreds of smaller fees. For example they may have Seniour Consults, dental checks, Sick patient consult - all of which are primary consultations. Vaccination fees can be split into kitten vaccinations, puppy vaccinations, adult dog vaccinations, kennel cough vaccinations, adult cat vaccinations.

When asked how many consultations their practice performs each year, most clinicians cannot answer this, because they need to generate a report for each individual fee - often it requires 20-30 reports to be run and they forget to include some of the fees.

Once ProfitDiagnostix is set up, it does this all in one report, automatically. 

Average invoice value

How does a practice know whether it is charging enough or whether staff are forgetting to charge for some items?

The easiest way is to calculate 'average invoice value' and compare it to a national average. 

For example, if a practice generates 10,000 invoices per year and their sales are $1,000,000, thein their average invoice value would be $1,000,000/10,000 = $100. Once a practice knows this then they can compare their value to the national averages in Profitdiagnostix and know whether they have pricing or invoicing problems.

Unfortunately, most practice management systems do not calculate average invoice value correctly because there is no standard definition as to what invoices should and should not be included. The greatest problem is where systems generate zero priced invoices, and a lot of systems do this. These zero priced invoices skew the average invoice value into making it look too low.

Profitdiagnostix corrects this by making sure that zero priced invoices are excluded from the calculation.

Measuring the performance of individuals within a business

In any large practice the performace of the individual clinicians varies significantly in many of the services that promote patient well being. It is very useful to identify these differences and try to get the practice working as a team to consistentloy promote patient health to a high and consistent level.

The important parameters measured are how many re-checks, laboratory samples, xray procedures, blood tests dentals that are performed by each clinician. These are called 'patient advocacy' parameters and are known to improve the diagnostic effectiveness in clinicians that perform them more often.

ProfitDiagnostix automatically produces reports for each clinician as often as every week and track them against a target. The target is adjusted for the amount of work they do each week so that it is fair (if for example a clinician is on leave for half the week, then their targets are adjusted accordingly).

These reports would be impossible to generate manually on a regular enough basis fo give the practice team sufficient performance feedback.

Understanding what a 'conversion' is

In any clinical job, the person who sees the customer and advises a procedure may not be the person who does it (invoices it). For example, Clinician A may see a patient today in a consultation and advise a dental procedure. The patient may then come in on another day a week later for the procedure, which is performaed by clinician B. The invoice will therefore be in the name of clinician B. however to accuratly measure the clinicians diagnostic skills, it is necessary to find out who clinician A was (who recommended the procedure).

Profitdiagnostix can do this - we call it 'conversion reporting'. The system looks back at the history of specific procedures, identifies the most recent client facing event and then allocates the 'conversion' to the clinician who performed the client facing event, not the actual procedure.

Many reports in the system look at conversions as well as invoiced items and this addresses a very commonm problem in measuring diagnostic p[erformance in clinical jobs.

What is a profit and loss statement?

A 'profit and loss statement' sometimes also called an 'income statement' is a document that is produced by accountants and bookkeepers to let the businesss owner know how much money they have made over a particualr period.
A profit and loss statement has a start date and an end date, so it is almost always headed 'Profit and loss from period XXXX to period YYYY' or 'for the 12 months ended XXXX'.
It looks something like this:

This information is hardly ever kept in a practice management system, but it is very important for business owners to know if they are making any money. In fact, in most acases, the only bit of information that you can get from a practice management system is the very first line - the total sales/revenue for the period. This is the amount of money invoiced by the business over that time.

All the other information under that line can only be found in the accounting software.

Because Profitdiagnostix can connect to most accounitng systems, it can bring this information together with information from the practice management system and can therefore build more powerful reports.

Why it is important to adjust a profit and loss statement to get accurate reporting

To further complicate issues, the profit and loss statement is only accurate for tax purposes, and often does not show an accurate representation of the true profitability of a buisness.

To show true profitability, an accountant must further apply a process called 'normalisaton'.

For example, a business owner may work a 40 hour week and in a Australia, a fair wage for this would be $100,000. But for tax purposes, this business owner may elect to only take a wage of $60,000 and leave the rest in the business.
So it this business owner has underpaid themselves, a more realistic representation of profit would be to add an extra $40,000 to wages and reduce the profit by $40,000.

Another example is with rent. If a business owner occupies their own property, often they will have no rent showing on the profit and loss statement. But if they sold the business to someone else, they would most certainly charge the new owner rent. So to accurately measure the business performance, rent would have to be added into the expenses and removed from the profit.

Profitdiagnostix automatically does all these powerful adjustments and therefore gives the business owner a much more accurate reflection of their business performance.

How does it work with accounting software and what are accounting software systems

Profitdiagnostix connects to accounting systems just like it connects to practice management systems.

Using either the API interface provided by the developers of the accounting software (for cloud accounitng systems) or the desktop App for accounting systems that are running on the computers in the business, it collects the data every 24 hours. So if the bookkeeper makes some entries into the accounting software, there will be reflected in Profitdiagnositx within 24 hours.

There are many accounting systems available, the more common ones that Profitdiagnostix connects to are shown on the website

Is the data safe and confidential

The team at Profitdiagnostix feels very strongly about keeping the information of all their customers safe and private. They are willing to go over and above any protection offered by the data protection act.
The terms of privacy are available on the reporting website and are constantly being added to as customers ask for further protection.

Furthermore, the entire system runs on a secure connection (you can see this by all pages showing https:// at the beginning instead of just http://). All user names and passwords are encrypted (not human readable) and the servers and databases used are mainstream systems used by large commercial, even listed 9on the stock exchange) companies. This is similar to mosrt banking websites.

Furthermore, a portion of the support staff and development team are accountants who are accustomed to dealing with confidential accounihng data.

Can it damage my computers and server?

Profitdiagnostix has been extensively tested over many different types of systems. The desktop app that sometimes needs to be installed on computers to get data is a very small program and it used minimal system resources.
Profitdiagnostix is a 'read only' system, to do it's job it only needs to make copies of data, it never changes the data in the source system. This makes it very safe.
Where possible and where providers of practice management systems have co-operated, we have used 'read only' permissions to access data, this adds a further layer of protection.

Where is the data stored?

When Profitdiagnostix collects data, it puts it into a web or cloud area, so that the information can be accessed easily using a web browser from anywhere. This is also much better than users being restricted to only viewing information when they are at a specific computer or address. Generally the servers that hold your data are in the same geographical region (country) as the users business. Currently we use the AWS (Amazon Web Services) network, which is one of the best providers available globally.

What is Profitdiagnostix capable of measuring and what does it not measure

Currently, Profitdiagnostix gets the following information:

• All invoice lines (items on invoces) and the staff member who generated this line (sold the item)
• All invoice headers  - the total of invoices and the customer and patient it was sold to
• Customer information (emails address, address and phone numbers) - selected systems only
• Patient information  (age, species, breed, sex, alive/deceased) - selected systems only

From the above you can see that the system collects primarily financial information as this is what businesses enter consistently. Reports are then created using this information. Practice management systems have a lot of other information that is not collected by Profitdiagnostix currently. Examples would be:

• Reminders eg vaccination reminder dates
• Appointments
• Clinical notes typed by clinicians

As you can see, Profitdiagnostix focuses on the financial information. This is because we want to focus on consistent data to build reports that allow KPIs to be set for an entire industry.

What sort of internet connection do you need for Profitdiagnostix to work

Because Profitdiagnostix is a cloud system, you ned an internet connection to:

• View the Profitdiagnostix reports
• Have your data moved/copied fropm your business to the Profitdiagnostix reporting system

Is Profitdiagnostix difficult or time consuming to set up

We do most of the Setup for you so that you dont have to worry about it. Our accounitng team sets up the accounting side of the integration and teaches the system how to adjust to make your profit accurate.
Our clinical team sets up your connection to the practice managment system and teaches Profitdiagnostics how to identify all the inportant fees and services in your practice.

Can practices design their own reports using Profitdiagnostix?

Yes, it is a full report designing tool and we have full documentation on how to design your own reports:
ProfitDiagnostix Public knowledge base
Although, realistic expectations must be set. We estimate it takes about 35-50 hours to learn to use the report design tool effectively. This is time that a dedicated practice manager my have availible, or a person in the team of a larger multi site clinic. For the smaller practices it is unlikely that they will have the time to allocate to leearning how to use the system

What happens if a practice has multiple branches? And if branches are using different practice management systems? Will it work?

Profitdiagnostix has been designed to work in some of the most complicated enviromnents

For example: A practice may operate out of 3 branches. Each branch uses a different accounintg system and a different practice management system. This would probably be as complicated as it gets, with each branch having completely different softwarte systems
Profitdiagnostix will still be able to:

Generate reports for each branch

Generate a report for a 3 branches grouped together as one

The cost however increased for each branch, so in complicated set-ups like this, it is probably better that the customer contacts the team doing the setup so that costs can be estimated.

<todo link to test>