Goal Setting
Using Personal Income as the Basis

by AJ Riviezzo
The new year is a great time to review where your practice is at and where you would like it to go. One goal that is foremost in anyone’s mind is their personal income. Below is one way to create some targets and goals based on the desired personal income.

Let us assume, for discussions sake, your personal income goal for 2010 is $700,000. The numbers all flow from this goal number.

The first number we need to determine is your profit margin before physician salary. Take all of your non-physician salaried expenses and add them together. Divide that number into your total collected dollars for the year. This will generate a percentage hopefully somewhere between 50% and 75% (unless you are a new practice). Using an assumed percentage of 60% in all non-physician compensation, our ‘practice’ will need a total income of $1,750,000.

The second number we now need is the average income per ablation (see previous article) for last year. In this example I am using $2,500 as the average income. If you divide $2,500 into the needed total income of $1,750,000 divided by 12 it shows we have to average 58 ablations per month to achieve our desired goal.

The third number we need to calculate is how many ablations were performed on each unique patient on average. For this example the number is 2 ablations per patient. In other words, we will be treating 29 to 30 individual per month over the course of the year.

To be able to treat thirty people per month, we now have to determine how many people we have to scan. Assuming that 75% of the patients who receive an US scan show evidence of reflux, we have to scan 40 people per month to find 30 that need treatment. As not all individuals that have reflux will receive treatment, I am assuming a 10% drop rate (four people) so we actually need to scan 45 people per month to be able to treat our goal of 30.

Finally, we need to determine how many free consults actually receive a bilateral diagnostic ultrasound. If you are tracking how many free consults you are performing, you can divide this number into the number of diagnostic ultrasounds. For ease, I am assuming 80% of the free consults return for the diagnostic US. This give us another ‘drop’ of 11 patients per month who will not agree to have a diagnostic US performed.

Or, stated in the reverse, we now know we have to see at least 56 people in a free consultation in order to generate a sufficient number of diagnostic US’s, who then go on to receive treatment. This last number is one of the keys, therefore, for ensuring you are going to meet your desired income goal for the year.

The goals and numbers for your practice will vary from the above. Do let me know if you run into any problems in calculating all the way through. I am happy to help.