Key Performance Indicators (KPIs) are a roadmap to your med spa, dental office, or health care practice’s success. Identifying, tracking, and assessing your Key Performance Indicators (KPIs) allows you to make informed business decisions. In addition, it creates teamwork and accountability and establishes a trajectory for your business. We’ll talk about how to track KPIs and use the data to help your medical practice reach its revenue goals.
Identify your Healthcare Practice’s Key Performance Indicators (KPIs)
Are you measuring and assessing KPIs in your practice? If not, the first place to start is identifying those key metrics that drive and predict revenue. Here is a list of Key Performance Indicators every practice should be tracking by provider by month:
- New patients. Track the total number of new patients each month to understand growth and opportunities.
- Revenue by provider. By measuring the total amount of revenue generated by each provider, you can measure increases or decreases in total practice revenue. Eventually, you may be able to draw conclusions about provider efficiency and profitability.
- Hours worked. Track the total hours each provider spends doing procedures.
- Available hours. Track the total hours each provider scheduled to do procedures.
- Capacity percentage. Calculate this by dividing hours worked by each provider by available hours by each provider. With this ratio, you can identify scheduling and staffing opportunities for growth and efficiency. In addition, your can compare provider to provider.
- Revenue per hour. Divide revenue by each provider by hours worked by each provider. Measure increases or decreases in production.
- Procedures by provider. Find the total number of procedures performed by each provider. Track increases or decreases in total procedures performed.
- Revenue per procedure. Divide revenue by provider by procedures by provider to measure changes in average revenue, and procedures to determine cyclicality, growth, or assess service mix.
Create a System for Tracking and Measuring KPIs
Once you’ve identified which KPIs to track, you’ll need a system to track them. This system is commonly called a KPI Scorecard, and it’s what we create for our clients. It’s a spreadsheet that tracks KPIs month by month. We also separate KPIs by provider. Make sure your teammates know who is accountable for tracking, measuring, and reporting KPIs month by month. Here’s an example:
Monthly Action Plan for Key Performance Indicators
Measuring Key Performance Indicators can become a consistent part of your practice’s culture. Next, we recommend staying on track with your KPIs with these actions every month:
- Identify and track KPIs. Leverage your PMS or EMR to pull data and compile it into a spreadsheet each month
- Leverage historical performance to establish achievable goals to drive your vision. Review the KPIs for each month of the previous and current year and create challenging goals.
- Compare and assess KPIs. Compare your actual performance to your goals and previous months actuals.
- Communicate goals to your staff and team.
- Celebrate successes and course correct opportunities monthly.
How to Use KPIs to Project Revenue and Set Goals
You have begun tracking monthly KPIs that paint a picture of the productivity and opportunity for each provider. Now, you can use data-driven insights to project your monthly revenue. Create revenue per hour goals and anticipate any other revenue streams.
For every hour worked, what can you anticipate the revenue to be for each provider? Next, total each provider’s goals for the month to come up with the total practice goal.
When setting goals, create individual goals for each KPI, each month of the upcoming year, and for each provider. Identify what each provider’s capacity has been in the past. Anticipate if they can maintain or grow. Additionally, identify trends and goals for revenue per hour and revenue per procedure.
Collaborate with a Financial Partner to Help You Stay on Track
Tracking KPIs is one of the surest ways to keep your business on track toward revenue goals, but starting the process can feel overwhelming. For guidance, strategy, or clarity, please contact us for an introductory conversation or complimentary assessment.