Are You Thinking About The Right Key Performance Indicators?
Finding a small set of meaningful key performance indicators (KPIs) will help you understand your business, communicate and gain support for your strategy, and ultimately realize its success.
“Without a set of KPIs that you use within your practice, your shareholders will choose their own,” said Bob Gatewood, athenaCollector Product Manager. “Often, the only metric they have is the size of their bonus check.” The person responsible for the business management of the group will look good as long as the amount on the check exceeds shareholder expectations. If it does not, you will find yourself in the uncomfortable position of reacting to demands for an explanation.
“If you haven’t been tracking the factors that ultimately result in their paycheck all along, you probably won’t survive that inquisition,” says Gatewood. “Many practices who think they’re tracking the right KPIs are not. When surprised by declining shareholder compensation, they can’t quickly put their finger on the root cause and are forced to speculate in front of their bosses.” Even groups who think they’re data-driven often focus on imprecise KPIs that don’t serve their needs. Here’s a suggestion for some KPIs to think about:
| TIRED | FRESH |
|---|---|
Days in A/RThis time-tested metric still has a place as a gross indicator of the health of the revenue cycle, but it’s not useful as a diagnostic tool. There’s too much in there. |
Self-Pay Days in A/R Over 60 (Measured from the date of final adjudication, not service date)This metric takes the primary and secondary insurance cycle time out of the evaluation of the efficiency of collecting the patient portion. After two statement cycles, that patient needs different outreach. This KPI is going to become more important as consumer-directed health plans gain popularity with employers. |
Collection RateAny metric that includes the amount charged is meaningless. Your fee amount has become virtually irrelevant to the operation of your business. |
Collections per Work RVUThis metric is an indicator of your effectiveness in preventing denials, negotiating reimbursement, monitoring payer behavior, and collecting the patient portion of the receivable. Participating in pay-for-performance programs will also cause this ratio to increase. Provider HoursHow many hours are your providers spending in the office or in surgery? Encounters (or Surgeries) per HourAre schedules full? RVUs per Encounter (or Surgery)Are you coding to the highest appropriate level? |
The right set of KPIs can transform your practice. It’s worth your effort to find them.
Go get ‘em!