How much does your medical office manager know about your PT practice’s metrics? If they don’t know enough, it’s possible that your bottom line is suffering. At the very least, it’s likely that you’re not doing everything you could to grow your practice.
One of the reasons we created HENO is that we couldn’t find the all-in-one software solution we needed to manage our PT practice. We were making do but we knew we were spending unnecessary time and money that could have been better spent in our practice.
With that in mind, here are the key things that every medical office manager should know about analyzing practice metrics.
Which Metrics to Track
The first thing your medical office manager needs to know is which key performance indicators (KPIs) to track. We recommend tracking a combination of traditional business metrics and metrics that are unique to medical practices.
Let’s start with the traditional business metrics. These include:
- Revenue growth, revenue sources, and revenue concentration
- Cost per lead
- ROI on marketing
- Working capital
- Cash flow
- Profitability over time
Tracking these metrics will help you get a handle on the financial aspects of your practice and figure out ways to increase your profitability.
The second set of metrics you should be tracking are KPIs specific to medical practices. These include:
- Average insurance claim processing time
- Insurance claim denial rate
- Patient wait time
- Patient-to-staff ratio
- Patients who understand your paperwork
- Overall patient satisfaction
- Patient drop offs
- Patient conversion rate
These practice KPIs are essential for maximizing your efficiency and increasing patient satisfaction.
How to Analyze Profitability Metrics
Many of the traditional business metrics we listed above are designed to help you determine how profitable your practice is now, as well as helping you determine the best ways to increase your profitability in the future.
Let’s start with the three KPIs related to revenue. You should start by looking at your per-quarter revenue from year to year. That means taking your first quarter numbers for 2019, dividing them by your first quarter numbers from 2018, and noting the difference.
If your revenue is up, that can be a good sign. However, you’ll also need to look at your profitability over time. If your revenue is up and your profitability is down, you’ll need to examine your pricing structure and overhead and adjust it to improve your profitability.
You should also crunch the numbers to determine which revenue sources are the most active. These may include:
- Organic traffic
- Email marketing
- Social media marketing
- Physician referrals
- Patient referrals
Once you know where the revenue is coming from, calculate your revenue concentration. Your practice will be more stable if you have revenue from multiple sources: insurance payments, private payers, merchandise, and so on.
Finally, it’s essential to review your claim denial rates and claim processing times. A high claim denial rate will increase your claim processing time, since denied claims will need to be resubmitted in most cases. If you have a high percentage of denials, it likely means that there’s a problem with your claim submission process.
How to Analyze Practice Metrics
The next thing you’ll need to do is analyze your practice metrics. These are statistics that indicate how well your staff is performing and how satisfied your patients are with their experience.
The first metric to look at is patient wait times. If patients are checking in with your receptionist and waiting a long time to see their PT, it’s an indication that there’s a problem with your scheduling. It may be that you’re scheduling appointments too close to one another. Or, it may mean that one of your PTs is spending too long with patients, or that you need another PT to handle your patient volume. In any case, you’ll need to adjust to accommodate the needs of your patients.
You should also analyze your patient confidentiality to ensure that your office is properly handling EMRs and complying with HIPAA regulations. It’s helpful to review your patients’ understanding of your documentation and revise it if the wording or intention is unclear.
You should track your patient-to-staff ratio to ensure that you’re not over or understaffed. Being overstaffed will cut into your profits and being understaffed can lead to patient dissatisfaction and long wait times.
Tracking mistake events will help you understand the patient experience and identify areas where you need to retrain your staff or rethink your procedures.
Finally, it’s a must to track overall patient satisfaction. A high patient satisfaction rate is a good indication that your management is on track. A low rate is a red flag that something’s wrong.
How to Analyze Marketing Metrics
Finally, you should look at two key marketing metrics:
- Cost per lead – calculating your cost per lead will help you identify your most effective marketing campaigns and the ones that aren’t performing well.
- ROI on marketing campaigns – this KPI will help you fine-tune your marketing strategy, stop spending money where it’s not working, and increase spending on the campaigns that are bringing new patients to your practice.
If you have a marketing manager, they should be involved in checking marketing metrics and then using them to split-test existing marketing campaigns until they are performing better.
Analyzing practice metrics can help you improve patient service and satisfaction, get the most from your marketing campaigns, and ultimately, increase your profits.
To schedule your free demo of HENO today, please click here now.
Destini has been a dedicated member of the HENO team since September 2018.