This day and age it is critical to measure your practice’s results using key performance indicators to determine areas of improvement. Figuring out such areas and implementing a solution can lead to an immediate increase in profitability for your practice. This article discusses key performance indicators that can be used to determine where your needed areas of improvement are.
Self Pay Days In A/R Over 60 Days – This is an indicator of how long it takes for your practice to collect your patient accounts receivable, which ultimately affects your practice’s cash flow. If your practice’s Self Pay Days in A/R over 60 is significant, it may be time for you to reevaluate how you go about collecting your patient balances. Are you just sending invoices or does your practice have a strategic follow up system that includes sending letters and making phone calls? Having a defined credit plan in place and process to collect such balances will keep this number to a minimum. This analysis will become more important as consumer-directed health plans gain popularity with employers.
Claims Denial Rate – This metric is an indicator of your effectiveness in preventing denials, negotiating reimbursement, monitoring payer behavior and training staff. Simply put, the higher this rate the more money your practice is losing on a daily basis and it may be time to investigate the root cause of your claims denials. Providing upfront staff training and tracking the cause of your denials can reduce this number.
Encounters Per Hour – This measures the efficiency of your practice in terms of whether scheduling is full. Openings in your scheduling mean your practice is not earning any revenue for that time period. Over-scheduling can be just as detrimental to your practice because it can lead to patients spending too much time in the waiting room. Analyzing your current scheduling can determine whether you need to add another physician to your practice or change your practice hours.
Patient Turn Around – This is basically a measure of the time frame between when a patient walks in the door, checks in, is seen by the doctor and checks out. The top patient complaint, decade after decade, is not being seen promptly. A reasonable performance goal might be to see patients within 20 minutes of the appointment time. If your practice is not achieving this goal, you may want to consider mailing your new patients registration forms prior to them visiting your office so that everyone is ahead of the game when the patient arrives.
Employee Turn Over – While this measure may be harder to analyze quantitatively, it is certainly worth looking at. With your office staff being so critical to your practice’s success, it is imperative that you monitor employee turnover. Incentives can be put in place that reward your staff for keeping claims denials down and following up on rejected claims and past due patient balances. Adequate training should be provided for your staff so that they are competent and can perform their daily tasks accordingly.
Budget To Actual Review – While this one may seem obvious, it is often overlooked. Reviewing your monthly actual expenses and revenue to your budgeted numbers can inform you of where your practice stands financially. This is a high level review that should be performed after every month-end close. Not only will it let you know where your practice stands financially, it can also bring awareness to suspicious activity by your employees. While no business owner likes to think that any of their employees would commit fraud, it is critical that certain internal controls are in place to mitigate such activity. You can even take it to the next level and compare your numbers with those of other practices in your specialty.
The right set of Key Performance Indicators can transform your practice. It’s worth your effort to find them and constantly review them to see where your practice stands. Doing so can be the difference between taking your practice to the next level or achieving the same results time after time.