Today it is critical to measure the results of your practice using key performance indicators to determine areas for improvement. Discovering these areas and implementing a solution can lead to an immediate increase in the profitability of your practice. This article looks at the KPIs that can be used to determine where the areas for improvement are needed.

Self-Pay Days on Accounts Receivable for 60 Days – This is an indicator of how long it takes your practice to collect accounts receivable from your patients, which ultimately affects your practice’s cash flow. If your practice’s self-pay days on accounts receivable over 60 are significant, it may be time to reassess how you are going to collect your patient balances. Do you only send invoices or does your practice have a strategic tracking system that includes sending letters and making phone calls? Having a defined credit plan and a process for collecting those balances will keep this number to a minimum. This analysis will become more important as consumer-led health plans gain popularity with employers.

Claim Denial Rate – This metric is an indicator of your effectiveness in preventing denials, negotiating refunds, monitoring payment behavior, and training staff. Simply put, the higher this rate, the more money your practice will lose on a daily basis, and it may be time to investigate the root cause of your claim denials. Providing staff training in advance and tracing the cause of their denials can reduce this number.

Hourly Encounters: Measure the efficiency of your practice in terms of whether the schedule is complete. Openings in your schedule mean that your practice is not earning income during that time period. Excessive scheduling can be equally detrimental to your practice because it can cause patients to spend too much time in the waiting room. Analysis of your current schedule can determine if you need to add another physician to your practice or change your practice hours.

Patient Return – This is basically a measure of the length of time between when a patient walks in the door, checks in, is seen by the doctor, and leaves. The main complaint of patients, decade after decade, is not addressed promptly. A reasonable performance goal might be to see patients within 20 minutes of the appointment time. If your office is not meeting this goal, you may want to consider mailing in your new patient registration forms before they visit your office so everyone is on the cutting edge when the patient arrives.

Employee turnover: While this measure may be more difficult to analyze quantitatively, it is certainly worth analyzing. Since your office staff is so critical to the success of your practice, it is imperative that you control employee turnover. Incentives can be implemented that reward your staff for keeping claim denials low and tracking denied claims and patient balances owed. Adequate training must be provided to your staff so that they are competent and can carry out their daily tasks accordingly.

Budget for Actual Review – While this may seem obvious, it is often overlooked. Reviewing your actual monthly income and expenses against budgeted figures can inform you of the financial condition of your practice. This is a high-level review that should be done after each month-end close. Not only will it let you know where your practice is financially, but it can also raise awareness of suspicious activity on the part of your employees. While no business owner likes to think that any of their employees will 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 KPIs can transform your practice. They are worth the effort to find and constantly check to see where your practice is. Doing so can make the difference between taking your practice to the next level or achieving the same results over and over again.