Physicians – Use Key Performance Indicators to measure the results of your practice

Today it is critical to measure the results of your practice using key performance indicators to identify areas for improvement. Figuring out such areas and implementing a solution can lead to an immediate increase in your practice’s profitability. This article discusses key performance indicators that can be used to identify areas for improvement.

Self-Payment Days in A/R greater than 60 days – This is an indicator of how long it takes for your practice to collect your patient receivables, which ultimately impacts your practice’s cash flow. If your practice’s A/R self-payment days are significantly above 60, it may be time for you to reevaluate how you approach collecting your patient balances. Do you only send invoices or does your practice have a strategic follow-up system that includes sending letters and making telephone calls? Having a defined credit plan and a process to collect such balances will keep this number to a minimum. This analysis will become more important as consumer-focused health plans gain popularity with employers.

Rejection Rate – This metric is an indicator of your effectiveness in preventing rejections, negotiating fees, monitoring payer behavior, and training staff. Simply put, the higher this percentage, the more money your practice is losing on a daily basis and it may be time to investigate the root cause of your rejections. Training staff in advance and identifying the cause of your denials can reduce this number.

Hourly Meetings – This measures the efficiency of your practice in terms of whether the schedule is full. Openings in your schedule mean that your practice will not generate revenue for that period. Over-scheduling can be just as detrimental to your practice as it can lead to patients spending too much time in the waiting room. By analyzing your current schedule, you can determine whether you need to add another doctor to your practice or change your practice hours.

Patient turns around – This is basically a measure of the time frame between when a patient comes in, checks in, is seen by the doctor, and checks out. The number one patient complaint, decade after decade, is not easily seen. A reasonable performance goal might be to see patients within 20 minutes of the appointment time. If your practice doesn’t meet this goal, consider mailing your new patients’ registration forms before they visit your office, so everyone has a head start when the patient arrives.

Turnover – While this metric may be more difficult to analyze quantitatively, it’s definitely worth looking into. Since your office staff is so crucial to the success of your practice, it is imperative that you keep an eye on staff turnover. Incentives can be put in place that reward your staff for curbing rejected claims and following up on rejected claims and overdue patient balances. Adequate training should be provided for your staff so that they are competent and can perform their daily tasks accordingly.

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Budget to Actual Review – Although this one may seem obvious, it is often overlooked. By reviewing your monthly actual expenses and income against your budgeted numbers, you can see where your practice is doing financially. This is a high-level review that should be performed after each month-end close. Not only will it let you know where your practice stands financially, it can also draw attention to suspicious activity by your employees. While no business owner likes to think that one of their employees would commit fraud, it is critical that there are certain internal controls in place to limit such activity. You can even take it to the next level and compare your grades to those of other practices in your specialty.

The right set of Key Performance Indicators can transform your practice. It’s worth finding them and constantly reviewing them to see where your practice stands. This could be the difference between taking your practice to the next level or getting the same results time after time.