Key Performance Indicators (KPIs) in Healthcare
If you're running a business in the healthcare sector, it probably requires your organization to keep on top of finances, current regulations, processes, and policies. While you're following these demands, you may also be keeping a keen eye on your budget. With all of these responsibilities, applying pressure on your bottom line, it may be beneficial to set up specific goals and objectives for your healthcare organization.
Diving deep into different departments and measuring them with different healthcare scorecards may prove to be highly advantageous in improving productivity, efficiency, and profits. Utilizing a healthcare KPI or key performance indicator should make it more efficient to track and measure your success for each specified factor.
Key Performance Indicators Healthcare Organizations Can Utilize
Taking steps to measure critical factors associated with your healthcare organization's goals and objectives should provide the data needed to make changes and improvements when they are warranted. Utilizing KPIs can provide transparency around performance and allow you to compare your progress over different periods. Analyzing this data should show you the direction you're moving for each healthcare KPI factor.
Streamlining different factors in your operations and adjusting your performance can help improve patient satisfaction and the quality of care in this area. Here are four key performance indicators healthcare organizations often use to track and measure operations:
- Average Patient Wait Time: How long do your patients have to wait before seeing a healthcare provider? Using this healthcare KPI can help indicate capacity management and patient satisfaction. Tracking the time between when a patient checks in until they are seen should provide the data required to cut wait times and schedule more efficiently.
- Staff-To-Patient Ratio: Are you trying to improve the quality of your patient care? Having an adequate staff-to-patient ratio provides the right amount of care and treatment for patients. The healthcare scorecards for this factor may need to be broken up between different periods if you're operating 24/7 with various shifts.
- Patient Room Use: Measuring the number of patient rooms you're using at one time can indicate how well you're utilizing the space in your facility. Tracking this factor is similar to examining the occupancy rate at a hotel.
- Readmission Rate: Examining this data should shed light on your organization's quality of care issues. A high readmission rate may indicate that your patients aren't being treated as thoroughly as they should. This metric can also spotlight providers who may not be as experienced or as prepared.
- Room Turnover: Indicates how quickly patients are being treated and moving in and out of your facility. Analyzing this factor can show how well you are scheduling each patient and providing satisfaction. Depending on your type of organization, you may want to tie this KPI in with readmissions rates. Taking this action should help ensure patients aren't leaving your facility earlier than they should.
- Communication Between Primary Care Provider and Patient: Measures how frequently you contact your patients. You can measure this KPI by examining the use of smartphone apps, emails, or a patient portal.
Sales & Marketing
If you're operating in the healthcare arena, your sales and marketing efforts will likely acquire and keep new patients. Evolving and honing your strategy in this department should be more straightforward when you utilize these sales and marketing key performance indicators healthcare companies often use:
- Patient Acquisition Cost: Acquiring new patients may require different sources, such as social media or paid search. These tools all have different costs per lead. Analyzing this factor should provide the data needed to derive the acquisition cost for each new patient. It's essential to study this factor by looking at the lifetime value of each patient.
- Patient Retention: Are you finding it challenging to retain patients? Keeping your patients satisfied is critical if you want them to come back consistently. Having a loyal patient can do more for your bottom line than having to acquire five new ones. A dedicated patient will probably become an evangelist for your brand, recommend your organization to family and friends, and spend more over their lifetime.
- Search Engine Rankings: Monitoring your search engine rankings as a KPI for both branded and nonbranded keywords is especially important in your industry. Local search rankings are typically used to attract new patients. Paying attention to your keywords' difficulty and the number of monthly searches will pinpoint the ones with the highest search rates and lowest difficulty scores.
- Overall Campaign Evaluation: Do you measure and evaluate each campaign once it's completed? Offering campaigns centering around "scheduling your annual checkup" or "promoting oral health" can be used to help build brand awareness or increase the number of appointments you receive. Consequently, it can help analyze your campaigns' original goals and compare them with the end results. Doing so can provide more insights and make it more efficient when strategizing future campaigns and building engagement.
- Net Days in Accounts Receivable: Are you receiving the funds required for your services on time? Looking at the number of days in A/R indicates your organization's revenue cycle efficiency. It can provide greater transparency into how well your company is enabling and automating a smooth A/R workflow. Your healthcare scorecards reviewed for this factor may require you to assign a follow-up team to ensure payments are received timely.
- Claims Denial Rate: Using this factor can help measure if you're getting reimbursed correctly and provide deeper insights into your RCM process's efficiency. Having a high number of denied claims will result in lost revenue.
- Average Treatment Charge: Measuring this healthcare KPI is an excellent indicator of how efficient and effective your organization is in treating patients. Measuring the amount of money charged for each patient's treatment can be completed using an average treatment fee taken from all patients or each individual treatment fee during a specific period.
- Permanent Employee Wages: Human resources represent a large portion of expenses for your organization. Measuring it is vital as it can play a significant role in budgeting and meeting specific financial objectives. Examining the scorecards for this factor should help you consider how your business is benefiting versus the cost for each employee.
- Operating Margin: Deducting overhead and operational costs from operational revenue, excluding interest paid on debts and taxes, provides a benchmark for your operating profit margin. Knowing this metric should help you evaluate new implementations to determine if they are working as planned.
- Bad Debts: Ideally, it would be best to have zero accounts that don't get paid. Determining a benchmark for the percentage of bad debts your organization has can help ensure it doesn't get out of hand.
Implementing KPIs in Your Healthcare Organization
Once you've identified the objectives you'd like to attain, measure them consistently, and compare your data as needed, it is essential to have a process in place to ensure your progress.
Utilizing KPIs for each department should offer your organization the insights required to make critical decisions. Here at Fusion CPA, we understand and work with the key performance indicators healthcare organizations often use to help improve their bottom line. We'd be happy to discuss how using these metrics may be beneficial in your healthcare organization. Call us today to get started.