Did you ever wonder why they call your medical office a medical “practice?” We think about our practice of medicine not as a static noun (person, place, or thing), but as a verb—something that we do. This begs the question: How do you know if you are doing it well? How do you get better? Most physicians embrace excellence and continual improvement as virtues implicit in our calling. We have external tests and guidelines that inform our clinical practice, but how about our medical practice or business? This is where Key Performance Indicators come in.
Note: Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs) are mostly equivalent concepts and, as such, may be used interchangeably for this discussion. You can view an objective as a definable goal, and use the result as the key performance indicator to measure that goal. For clarity, let’s explore how these concepts can directly impact your practice.
The SMART goal setting framework forces a clear articulation of a goal that is Specific, Measurable, Achievable, Realistic and Time Bound. This, in turn, enables you to set measurements for practice success that align with these goals. By using this framework, you can create a structured approach to achieving and measuring success.
For example:
- Setting OKRs: Set annual and quarterly OKRs for the practice.
- Objective: Improve patient satisfaction.
- Key Results: Achieve a patient satisfaction score of 90% or higher, reduce the average wait time to less than 15 minutes, and increase follow-up appointment scheduling by 20%.
- Objective: Increase operational efficiency.
- Key Results: Reduce the appointment no-show rate by 30%, implement a new electronic health record (EHR) system by Q3, and reduce supply costs by 15%.
“Not everything that can be counted counts.Not everything that counts can be counted.”
But before diving into specific KPIs, it’s useful to look at how best practices in financial management have helped other medical practices thrive. According to a recent Medical Economics article, practices that adopt these strategies see higher revenue and profits. One such practice, led by Dr. Naresh Rao, utilized key performance indicators to reduce claim denials and improve overall revenue.
First, it’s important to think of your practice as a holistic enterprise with measurable subsystems. The include:
- Revenue Cycle Management (Billing)
- Front Desk and Practice Administration
- Marketing and Reputation Management
- Clinical Processes and Quality Measurement
Before continuing with the specific Key Performance Indicators for each domain, let’s think about a value statement and/or key outcome we would like to see from monitoring KPIs in each domain. Let’s start with Revenue Cycle Management (RCM). Many RCM problems deal with the completeness, timeliness, and accuracy of billing and payment.
Here are three simple questions that serve as a goal to measure RCM success against:
- Are all of the services provided in the practice completely, accurately, and promptly billed?
- Are all billed claims completely, accurately, and promptly paid?
- Can the above questions be easily and transparently answered?
If the condition existed that all of the services rendered in the practice were completely, accurately, and promptly billed and paid, and if you were able to easily ascertain this information and the practice were managed to ensure this ongoing state, would you consider the practice to be healthy or optimized from an RCM perspective?
Take a moment to consider whether these conditions currently exist in your practice; and if not, then why not?
If you can comfortably answer in the affirmative, then you likely have a well-optimized practice from an RCM perspective. By starting with a key value statement or objective, you can effectively focus on your KPIs and properly order them.
Boost Your Practice’s Financial Health with Our Expert KPI Guide.
