Dr. Jeremy Sharp (00:34)
Hey folks, welcome back to the 13th and final episode of our Marathon March, Marathon Month. We have covered a ton of material this month. I don’t know. I don’t know that I’ve recorded this many podcasts in a month ever. So this is fun. This is fun. I really enjoyed the like the rapid cadence and you know, needing to record quickly week to week and
produce this content. yeah, it’s been a good time for me. But we talked about a lot of things. We started with the neurobiology of testing fatigue, if you remember that, way back three weeks ago, to the math of finding a real hourly rate for your services, and then moved into digital topics and tech and cybersecurity. So we really ran the gamut over this March sprint. But information without.
implementation is just noise. This is something that I have come to believe more and more and more the longer I do this. There’s a big reason I started the membership community. It’s a big reason for the in-person retreat. Like information is great, but it’s kind of worthless if you don’t do anything with it. So today is all about the audit. In the world of assessment, we spend
all of our time auditing the brains and behaviors of our clients, right? But when was the last time that you actually performed a diagnostic audit of sorts on your own practice? So that’s what we’re doing today. Most of the clinicians will work in your business. You’ve heard this term. You’re working in the business, the day to day, minutia, giving tests, writing reports, but you rarely work on the business.
Today, I’m doing a four-part framework to perform a quarterly practice audit. This is how you can ensure that that clerical work or the administrative drag doesn’t creep back in and that your clinical validity remains the best in your community. Now, I know I’ve said it before, right? But this kind of thing is exactly what we might work on either in the membership, but especially in the in-person event every summer.
It’s called Crafted Practice. This is just one topic that could be a great fit if you were thinking about how to do a practice audit or if you want to fine tune or develop any of the areas that we’re going to talk about today. You could do that with 19, 20 other psychologists in practice who are there to do the same thing. So this is an all-inclusive, I call it a business retreat because there’s spaciousness. It’s not like we’re starting at 8 a.m. every day like a conference.
You get to sleep in a little bit. You get small group coaching. You get open time every afternoon to actually like implement the ideas that we’re talking about with people who can help you. Then we do happy hours. We laugh a lot, go to dinner at great restaurants and go get a massage. It’s a fantastic experience. Favorite part of my year. And like I said, it’s all inclusive. So just get yourself here and it just goes from there.
You can go to the testing psychologist.com slash crafted practice to get more info and register. And I’m sure like I will lean into this. It is expensive, I think relative to many other things. But again, it’s all inclusive and feedback from past years is that it more than pays for itself, both in relationships, time away, spaciousness, but also like literally financially people walk out of the event.
making huge changes in their practice from raising fees to hiring support to letting go of folks who are not so supportive to many other things. So I think it more than pays for itself. Again, the testingpsychologist.com slash crafted practice. But for now, we’re going to talk through this four part practice audit. Let’s go.
Dr. Jeremy Sharp (04:39)
Okay, everyone, we are back and I’m gonna start where any good audit should start and that is with the data. before I even dive into it, let’s just, okay, so audit feels very formal, but I’m just using that to indicate that we’re gonna be doing a survey of these different areas of your practice and making sure that you are where you’re supposed to be and working on the things that matter. Okay, but let’s start with the data. Every 90 days, you should,
could perform a random audit on your practice. You can pull five to 10 of your reports from the last quarter and review them against the standards that we set in pillar number one. Okay. So we’re focusing on the clinical part here for this first component, this first quadrant.
Dr. Jeremy Sharp (08:12)
So you’re pull five to 10 of your reports and first you wanna look at your battery architecture. So are you front loading those high demand executive functioning tasks, know, referencing the expected value of control theory that we talked about in episode one of the sprint and check if your afternoon subtests show, you know, any kind of suspicious like fatigue dip. And if so, that’s a good indicator to rotate the battery a little bit.
This can be super easy. If you utilize any kind of battery planner, it could be a simple spreadsheet or even a Word document. We have one where it lists the order of operations for our testing day and what we’re going to administer and when and that kind of thing. Yeah, you can update that, move some things around, hopefully pretty easily if it’s an electronic document.
Like I said, just rotate your battery a bit to make sure you’re front loading those cognitively heavy tasks. The next thing that you can do from a clinical perspective is look at your validity chain. Are you adhering to the AACN and NAN consensus of the two failure rule, which we talked about in a previous episode? You can review your data for some of those marginal PVT, performance validity test failures.
And in this audit that you’re doing, in these five or 10 cases, if you find that you have ignored a validity red flag because the client seemed motivated, that’s just a signal to tighten the protocol a bit. And that might involve adding another validity measure or paying more attention to the validity data. So the to failure role, just as a reminder, means you need to… If someone fails one thing, that’s noteworthy.
But if someone fails two independent standalone validity tests, then that’s pretty good indication that they are giving sub-optimal effort. Last thing that we’re going to talk about in the clinical realm is narrative synthesis. So this is where we’re going to apply that so what rule that we talked about back in the fourth episode. So in these reports, are you describing
like the bottleneck between domains? Are you doing a real synthesis? Are you integrating the data? Or are you doing more of a score dump and letting that serve as the bulk of the report? Another way to look at it is if a referral source were to read these 10 reports or five reports that you pulled, would they have a clear life roadmap for themselves starting on page one? So you know.
Are you doing a one page summary? Are you putting the most important information first? Or are you falling back on score dumping as the bulk of the report? So that’s the clinical side. Again, three things you can do. First of all, you’re going to pull five to 10 of your reports from the past quarter. You’re going to look at your battery. You’re going look at the validity measures. And you’re going to look at the way you’re writing reports.
Let’s move on to part two, which is the financial health audit. This was business lab pillar two material.
So in this one, you’re going to pull your time logs. OK, what does that even mean, honestly? I don’t know that many of us are keeping time logs. Maybe you did if you followed some of the guidelines in previous episode a couple of weeks ago. But if you don’t have time logs, and I’ll be honest, I’m not keeping time logs these days, but I also have things pretty dialed in at this point.
If you don’t have time logs though, that’s your first quote unquote fail of this audit, which is okay. All right. But I’m a big believer, big believer that you cannot manage what you don’t measure. So that one more time, you cannot manage what you’re not measuring. So you want to calculate that ratio of administrative time to clinical time. Are you still spending about one hour of admin for every six hours of clinical time or
Have you been able to utilize some tools or processes or software to get that down to maybe one hour of admin time for every eight to 10 hours of clinical time? That’d be great. So that’s the first thing is just like do a time audit essentially and make sure you have a good handle on how much time you’re spending on the administrative side. I have yet to find a practice owner who cannot offload more administrative work or streamline the administrative work. It’s very rare, including myself.
very rare to have that totally dialed in. next thing on this pillar that we’re going to do is calculate your real hourly rate. We did this back in the episode, but just a reminder, as part of the audit to make sure that that hasn’t slipped. So take your total revenue from the last quarter, subtract the overhead and the taxes. You can get that from QuickBooks or your accounting software.
Divide it by the actual number of hours you worked, not just the clinical hours, but also the administrative hours. And make sure to count all of the clinical hours. And is that number higher or lower than the rate per hour goal that you set a couple of weeks ago during our episode? And again, plenty of forgiveness here. If you did not go through that exercise to set your real hourly rate, that’s fine. Just do it. Do it now. It’s not too late.
Last thing that we’re going to do is look at profit margin and costs. there are lots of metrics. Metrics are going to vary widely by practice type and location. And a healthy profit margin for a solo private practice is often different than a group practice. solo practice should be somewhere around 50 to 65 % of gross revenue, provided you’re not spending significant money on non-clinical overhead. As practices scale and hire staff or other
clinicians, then the target for stable profit margin typically shifts down. Small groups might aim for 35 to 50%. Large practices are targeting more like 15 to 25%. Theoretically, profit margin is going to go down as you get larger. But the absolute amount of profit should go up.
Most people agree that maintaining a close eye on that labor to revenue ratio, so essentially what percentage of your gross revenue is occupied by payroll, becomes the most critical metric as you grow beyond a solo practice. So in the context of our discussion, this just means looking at a psychometrist model, or perhaps raising your rates, or cutting expenses from your battery. That was a topic from our small group this morning.
Dr. Jeremy Sharp (12:02)
OK, so just to recap here on the financial health audit side, you’re going to look at your time logs, you’re going to look at your real hourly rate, and you’re going to look at your profit margin for this.
OK, so let’s move to part three. And this is like the tech stack and security component. and I should mention too, there will be a download in the show notes for you to track these things. so you don’t have to create it yourself. I’ll give you a checklist to download. So just look for that in the show notes. OK, so we’re going to move to the technology pillar. We just covered this last week. This is your digital vault health check.
So the first thing is to do a BAA audit. I get tired just thinking about that. this is where you’re going to look at every piece of software that you use this quarter. So your EHR, your scoring platforms, your report writing tools, AI tools, your email that hopefully is secure. Question is, do you have a signed business associate agreement for every single one? And if the answer is no, then
You are carrying kind of a massive liability, to be honest.
Dr. Jeremy Sharp (14:29)
The second thing you want to do is check your data sovereignty. Are you still using any public facing AI tools for drafting? This includes ChatGPT, Claude, the non-Workspace version of Gemini, Copilot. If so, you want to get rid of that workflow immediately and move to more of a private instance model, not a public facing model, like Gemini within Google Workspace.
bastion or reverb if you are looking for a more comprehensive platform built specifically for psychologists. The third thing you want to do is a leak test. What does this mean? So looking back at those five or 10 reports that you pulled for your clinical audit, were they sent through a secure encrypted patient portal or did you send them through a password protected PDF via email?
I think in 2026, the standard of care for cybersecurity is moving toward portal only delivery. And this is a change that we’re going to be making in our practice as well. So don’t fret if you are behind or if you’re sending PDFs or maybe not even password protecting PDFs. There’s plenty of room, plenty of time to make this change. But now’s a good time to look and do it as we come to the end of Q1 of 2026.
Dr. Jeremy Sharp (15:51)
So just to recap again in this tech stack and security portion, you’re going to do a BAA audit. You’re going to check your data sovereignty, and then you’re going to check on the leakage of your data and how you are sending your reports and is that a secure method.
OK, let’s transition to part four, the last part of this audit. And this is an operational flow audit of sorts. So what does this mean? This means that we want to do kind of like a friction test. Friction test is looking back at your referral to feedback timeline. How many days passed between the first phone call and the final report delivery?
number is trending towards 60 or 90 days, then the friction is like pretty high. Now there’s a high demand for our services and so I’m sure that people will put up with any number of things and any number of timelines and delays with this kind of thing. But friction is pretty high. If you’re pushing two months or three months from first appointment to the last appointment, that’s a lot. High friction is the number one killer.
of the private pay pivot that we talked about back in, I think it was episode eight of the sprint. So, especially if you’re private pay, clients are paying for speed and access. And if your operational flow is bogged down by manual scoring, administrative drag, that kind of thing, the chances are you’re gonna lose those premium clients to the practice that has automated these things and can move them through the process relatively quickly.
So even if you’re not a private pay practice, I think you can still do an administrative audit. This is actually one of the first tasks I put through an AI language model. I had it act as a consultant, a workflow and efficiency consultant, and had it ask me tons of questions about our workflow, our client onboarding and then the assessment process and so forth.
to find gaps and inefficiencies and give me ideas about how to improve those things. And it was super helpful. So that’s a great use of AI if you are not sure where to start with your operational flow.
All right. Now, as we wrap up here, I’m going to characterize this as almost a, like a 90 day reset. So, you know, assessment is, I’ve used this term before, high stakes and it’s a high fatigue profession. By doing something like this audit every quarter, I think it’s helping to ensure that you stay in more of a sweet spot for your practice where there’s high clinical validity, high financial return.
Dr. Jeremy Sharp (18:28)
and low professional burnout. I mentioned during the sprint this month a few times that we owe it to our clients to not be burned out, to be doing the best clinical work that we can to be leveraging our brain power as effectively as possible so that we’re using our brain power to do the most important work and to be present for our clients. each of the things that I’ve talked about here
meant to take a lot of that burden off of your mind so that you can really focus on the work that matters. So this concludes our 12 to 13 episode sprint. Like I said, it was a lot of fun to go through this. And I’m going to experiment with this format in the future. So if you have topics that would be compelling, please send them my way. It’s Jeremy at thetestingpsychologist.com.
But my goal for this month was essentially to move you from like falling behind to leading the field in your area. You have the tools and the math and the research, I think, at this point to do that. And now it’s just time to go into the room and do the work. if you want support in this, like I said, in this kind of focused retreat-like format, then again, check out Crafted Practice. It’s a pretty amazing experience. And you know, I’m a relatively humble person, I think. to say that and to be confident in it takes a lot, but I’m 100 % confident that it can be a transformational experience just based on past years and what others have said. So check it out. You can do a pre-retreat or pre-booking call if you want to make sure it’s a good fit, but I’d love to see you there. So thanks for tuning in to The Sprint. I’ll be back next week.
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Okay, that’s it for today. I will see you next time.
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