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If I haven’t ranted before about this one, Kareo has a payment velocity calculator. If you watch their demo, the example is of a practice where their payment velocity is 48 days.

First, they don’t even explain what their definition of days is. It might be your accounts receivable days, but how are they calculating? I’ve seen many different ways people calculate this, but that’s not even my big gripe.

How does it work?

When you look at it, you’ll notice it looks like a dashboard dial, like a 0 to 60 kind of thing, or good to bad. I don’t know what you call it, a tachometer? The arrow goes in a semi-circle from good to bad, although it seems like it’s the opposite of what should be.

The point is, at 48 days, you got green on the left and red on the right. There’s a little bitty arrow just to the left of the middle in what looks like kind of a brown section between green and red. It’s not bad, presuming red is bad, green is good. Again, they don’t explain that.

So if it’s just to the left of the center with this arrow at 48 days, does that mean they’re better than average? Is that what we’re supposed to have intuited? Is this a linear scale? Because if it’s a linear scale, that would mean it goes from 0 to 100. Now, that in itself is stupid because there are no AR days that are 0. Some practices have over 100, especially if you’re workers comp or something like that. We’ve seen that.

Then, they show you this little thing that says “Kareo Best.” Again, they don’t explain what that is or who that is, but it says 13 days.13 days for your accounts receivable? What? I mean, that’s complete BS. I’m sorry like there’s no way. It’s nuts, right?

First of all, nobody in healthcare gets paid on average in 13 days unless they have some funky, unique business. That’s not realistic. Maybe this is predominantly a cash business. Okay, so that’s possible. 75% of business’s cash, you get paid in 0 days, and then the rest of you get the payment in 40 days, and the average is 13. That makes sense, although actually, it would be 10 days, that’s not the point.

What’s the payment cycle?

There are a few random payers that pay in like a week. That does exist, there are a few things like that, but I have never seen a reasonably-sized practice ever in 15 years. Have I ever seen a practice where they have a single dominant payer like 90% of the business happens to be among those crazy few who are fast-paying insurance? So I’m calling BS.

More importantly, what’s the point of this? It is supposed to be like benchmarking. I think they’re suggesting that they’re benchmarking, but 13 days. What’s the point of showing you that? Is it to make you feel bad? To say your billing sucks? Or this is somehow more nefarious than that, which is, “Oh, your billing sucks, so give it to us. We’ll do the billing for you” or something like that? I don’t even understand what they’re trying to do. I honestly don’t understand. You can’t do anything with this number even if it wasn’t complete BS.

We do a benchmark, and the value in benchmarking is to provide something that shows accurate and reliable data for a purpose beyond mere data for the sake of data. Showing you the lowest of the entire population, that’s like saying, “Okay, there’s a guy out there that’s 8 feet tall.” How is that relevant to me? I mean, I don’t understand. Or even for us, playing basketball, that’s still not relevant to me. Why do I want to know that somebody out there in the world is 9 feet tall? Or that guy just died, and now the tallest person is 8 foot 6? How is it relevant?

Why use relevant data?

Data needs to be actionable; otherwise, it has no value. You’re just vomiting stuff on people. There is so much they would need to do with this to have any value at all. It’s just so completely worthless. Aside from that, it could just make you feel bad. It could create a completely false sense that everyone is failing.

If an executive or head of practice saw this metric, they might think that their billing is performing poorly since this is the only benchmark that you see. If you believe Kareo has 65,000 providers using their system, which means that 99.9985% are showing poorly. They’re all worse than that, of course, and that’s moronic. I mean, who shows you a statistic that shows that “Okay, you’re outside of the top 0.001%.” God, I mean, if I’m in the top 0.002%, that’s phenomenal. I am crushing it, right? All of this does not make sense. I mean, I’m just struggling with this so much.

By the way, who said AR days is the gold standard? I understand that it’s the subject of many of our podcasts and articles and presentations and webinars and conference training that we’ve done. AR days is not the gold standard, but everybody sort of throws that out anyway.

I challenge anyone to engage with me in a debate on the subject of “Should AR days or some facsimile for that, a proxy or anything related to accounts receivable days, should that be the gold standard for performance in revenue cycle management?” Let me know! We’ll do a webinar; we’ll do a video, we’ll post it to the world. I would love to do it with anybody who wants to take that on.

It is a software company that does practice management software and EMR, that’s doing something foolish and not helpful and worse, probably detrimental to most of its clients.

It reminds me of 20 years ago, of the internet bubble days.I was at GE Healthcare in 1999, and everyone had to have something that was the “World Wide Web” that was on the internet. We were selling MRIs online. Now, you want to know how we were doing that. We had a standard process: we sat in front of somebody and said, “Press this button, click so that they transact.” We quoted “Sold an MRI online,” it was the dumbest thing ever. I mean, it was just for the sake of optics so that we could pump up the stock.

Basically, same crap, different decade. It is data for the sake of showing a number rather than having any useful value whatsoever, and it infuriates me.

So there is my rant. Do you disagree? Please send us a comment. Happy to hear, but I’m hoping that you guys appreciate a straightforward and sincere approach, and we’re just calling BS wherever we see it.


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