Why Key Performance Indicators (KPI)?
It is becoming proven that any business should be tracking and analyzing those unique factors that are relevant to the success of their organization through their key performance indicators (KPI).
With today's technology, we now have the tools to drill down into what is, or is not, successfully driving your business. Advanced Data Systems Corporation (ADS) is leading the way for medical practices to define, track and utilize their organization's KPIs.
There's a Strategy
Found on BELLINGHAM WALLACE +, you will find "the strategic importance" of identifying, tracking and utilizing your organization's unique KPIs. We like the symbolism of using your KPIs as your company's compass to better guide management to define "where your business is, relative to where it has come from and where it is going". As you will further read in this article, "many businesses aren't leveraging the power that comes from leveraging their data". If you haven't begun to work with your practice's KPIs, begin by identifying those areas that quantify your business.
- Lead Indicators - What will make your practice grow?
- Lag Indicators - What can your practice do to help you achieve your organizational goals?
- Financial Indicators
- What is the state of your accounts receivables?
- What is your percentage of write-offs?
- What is the financial status of your patient population?
- Non-Financial Indicators
- If applicable, what are your customer relations with referring physicians?
- How are your patients coming to your practice?
- What is your internal staff satisfaction? A lot of organizations are looking at their employee satisfaction and potential, behavioral misconduct issues. As the article states, "not only are company key performance indicators critical for monitoring financial performance, they can also help to improve employee morale --".
Identifying the Right KPIs
Establishing and "tracking the right KPIs" for your business is the first step you should do as noted in a relative Forbes article. "A good KPI is specific, measurable and impactful to overall business goals."
Another insightful point the author makes is that you may need to "break KPIs down into a smaller level". How do you know you need to break your KPIs down? As directed, when you are lead to "more questions than it answers," you may need to drill further down.
- An example that comes to mind is regarding your practice's patient population. You discover that you have a high percentage of no pays. Which of your patient no pays have insurance, and which of them do not. Of the patients who have insurance, what type of insurance plans do they have? Are most with high-deductible plans? Are there claims that need to be adjusted and resubmitted for insurance payment?
One last valuable point this Forbes author makes is that you should "shift KPIs as your business grows". When individuals, who are integral parts of your practice, such as investors, partners, patients, and referring physicians, begin to ask questions, you may discover new KPIs to monitor.
KPIs to Identify Revenue Opportunities
It is vital that healthcare providers continue to increase their profit lines to have the capabilities to grow their practices with new equipment and supplies, new technology and new staff. Found on ModernMedicine NETWORK, learn how to utilize KPIs to increase your revenue.
- Patient eligibility and required authorizations are vital data points to review to see if you have lost revenue due to lack of front desk processes. Today's technology helps any practice obtain important insurance information for billing purposes.
- Cancellation and no-show rates can be detrimental to a healthcare provider. Without the cancellation or no-show reasons, your practice cannot pinpoint the root causes of this lost revenue.
- Does your scheduling system have the capability to note why appointments are being canceled?
- Have your no-show patients left your practice?
- Are your no-shows those patients that have a history for not showing up?
- Billing lag time can lead to money lost. Lost charges can be a result of lagging documentation and billing. "A practice should strive to bill all services within one or two days from the date of service."
- Insurance denial percentages are recommended to be "less than 2 percent." Denials not only delay revenue coming into your practice, but denials also use up administrative time that can be working on revenue-producing activities. Find out the reasons for denials if "96%" of your claims do not get accepted on the first pass to insurances.
- Accounts receivables should be "within 30 days." When you have a high percentage over 30 days, it is critical to analyze what is delaying revenue from coming into the practice.
- Do you have "slow to pay payers"?
- Are patients' financial responsibilities being collected before they leave the office? If not, why?
The ADS Solution to Identify and Analyze Your Practice KPIs
The team at Advanced Data Systems Corporation (ADS) is committed to helping medical practices successfully grow their financial strength by integrating today's advanced technological tools. We know that for providers to have the capability to offer quality health care, they need a software system that can deliver the best practice management tools.
Our MedicsPM is the practice management system that can empower your staff to increase the financial health you need to grow your practice with tools to identify and track your practice KPIs. Our team is ready to help with our exceptional training, support, and services.