Physical Therapy Practice Management Decision Making
KPIs That Drive Results
Can Shannon identify the metrics that should be driving decisions in her practice?
It was one of Shannon’s favorite times of the day: the kids were tucked into bed, the house was quiet, and she could just relax with her husband. Mike was focused intently on a small adjustment he was making to their son’s toy car and his capable hands in the pool of lamplight made her feel that all was well with the world.
“Can we talk more about what you were saying at dinner, honey?” she asked.
“Sure. What gem of wisdom are you thinking about?”
“About tracking data. We keep track of a lot of information, but I always feel as though I can tell more about how things are in the business by how things feel around the building than by those numbers.”
“I see what you’re saying,” Mike said, his attention still on a tiny wheel, “but I think those numbers have value. Think about an extreme case: What if you were actually losing money on one group of patients because they missed so many appointments? They might be a group you don’t even really think of as a group, like people who live out in the country or pregnant women. It could be a long time before you realized that was a problem, if you aren’t on top of the numbers.”
“Yeah, but we honestly do collect so much information that I bet we’d notice that on our own before we got around to wading through the information to find it.”
“That’s why I think it makes sense to focus on the most important metrics — the KPIs.”
“Remind me what that stands for.” Shannon reached out for the car, now fully repaired.
“Key performance indicators. Those are just the numbers that make the most difference in your decision making. Maybe no-shows would be one of them.”
“It probably would be. That’s certainly one of the things that costs us money. And money, or at least revenue, is another of them.”
“What else?”
“How long it takes us to get paid and which payers are slow or tend to not pay — those are more things that I guess we just pay attention to in the back of our minds.”
Mike shook his head. “I always feel like my mind is less cluttered if I don’t have a lot of stuff in the back of my mind. You could keep a spreadsheet or something with those KPIs on it, and be able to check them any time.”
Shannon was still listing KPIs. “NFAs,” she added. “That’s “˜no future appointments’ — people who leave without booking their next appointment. And obviously the ones who don’t pay”¦ accounts receivable that are over 120 days. Those are all things about income”¦ And I guess when we have backlogged claims that increases costs because of the time required to deal with them, so that should be on the cost side.”
“So you’ve got a manageable number of KPIs for income and expenses.”
“You’re saying they’re manageable, and I guess that it is a more manageable list than the one I started out with,” Shannon conceded, “but I can’t see myself having the time to look through them all every day.”
“How about every week?” Mike suggested. “Or maybe there’s some way to automate it. Like maybe there’s a way your accounting software can pull a report for you. Mine can.”
“Okay, that’s given me food for thought,” said Shannon. “Thanks for talking it through with me. Now let’s quit thinking about work.”
Shannon and Mike both laughed. With two business owners in the house, there weren’t many times when they weren’t thinking about work. Maybe this could be one of those times, though.
Can Shannon identify the metrics that should be driving decisions in her practice?
Disclaimer: For HIPAA compliance, all characters appearing in this post are fictitious. Any resemblance to actual persons or actual events is purely coincidental.
In
these times, when we wake up to new Medicare cuts and insurance company
rule changes almost weekly, it’s imperative that you know all of your
key performance indicators (KPI) and exactly what your profit margins are. Cut through all
the clutter and let the Vericle system keep you informed on all that you
need to make your practice a success.
With some research and help from experts any practice owner can identify the metrics that drive decision making. But as Shanon mentioned, those metrics have to be monitored and a decision has to be made regarding what that data means. Ideally, practice owners would have a system in place that helps them with that aspect so they can focus on treating patients.
Yes, Shannon can identify the metrics that are most important to her practice with the right tools and coaching. She would also be able to set her own expectations for these metrics or KPIs and be able to see immediately if the practice is meeting those expectations. She is spending too much time and money trying to figure this out on her own.
Shannon would solve her data problem with a quick glance at a bestPT Practice Health Monitor and then she would be able to make a quick decision to take action to improve.
Wit some research and help from the right experts any practice owner can identify the metrics that drive decision making. But Shannon’s right, it could be difficult to look through these on a daily basis. That’s why if she goes to the experts, they will help her determine what their KPIs are and she can stop wasting all this time trying to figure it out on her own.
Shannon shouldn’t need to look at the numbers every day. If she knew what was happening, and could get reports to keep her updated — perhaps via her software — it would free her up to deal with practice matters of greater import and interest.