Top 5 Daily Key Performance Indicators (KPIs) Medical Practices Should Monitor to Improve Financial Performance
- Aug 8, 2023
A KPI dashboard allows you to easily monitor the financial performance, challenges and opportunities in your medical practice. Understanding your KPIs and comparing them to industry data enables your management team to adjust quickly and make better strategic decisions.
A key performance indicators (KPIs) dashboard is a tool that allows you to easily monitor your medical practice’s performance, challenges and opportunities. Understanding your KPIs and comparing them to previous months or available industry data enables you to make strategic decisions and plan for the future.
Most medical practices we work with present to management and practice stakeholders on a monthly and yearly basis; however, we also see effective daily or weekly dashboards that track both good and bad trends. Such vigilance facilitates preventing any undesirable movement before it develops into a full-blown crisis.
So KPIs are important, but where to begin?
The list of KPIs worth analyzing and observing can seem endless, so the key is to start with a set of indicators that will have the greatest impact on your financial performance. A conversation with practice management and business advisors can help you develop your own list of indicators based on your unique challenges, opportunities and strategic goals. This will grab the attention of your management group or shareholders as well, since you’ll have some simple data charts and tracking behind some of your most talked-about areas.
Best KPIs to start with and monitor daily/weekly
As a starting point, we recommend these specific KPIs be monitored and reviewed on daily or weekly basis:
- Cash Receipts
- Revenue is what powers your practice, so the money that is collected and deposited into the bank should be monitored daily.
- Revenue is driven by charges. Fluctuations in charges should also be watched closely, as this directly correlates with fluctuations in cash receipts.
- A practice can’t operate without overhead; therefore, having knowledge of your unpaid invoices — when they are due and how much cash is readily available to pay those expenses — is critical. Monitoring your unpaid expenses weekly allows you to determine the cash ow of the practice and helps you ensure that you have enough cash ow to cover expenses.
- Patient Appointments
- Having unfilled appointments is like leaving money on the table. Tracking the number of filled and unfilled patient appointments daily can not only lead to operational efficiencies, but also help keep charges consistent, which results in steady reliable cash flow.
- Rates of no-shows, patient cancellations and physician-directed bumps
- This indicator allows you to determine opportunities to improve capacity management, optimize your schedule and reduce missed opportunities. No-shows, patient cancellations and physician-directed bumps should be monitored weekly.
Take Action Beyond Analysis
Take the time to incorporate historical data for comparison. You should be able to tell what each indicator read at the same time last year and how it changed from the previous week and year. Considering the use of other industry data will give you a better sense of how your practice compares to other practices in your specialty.
Don’t allow your KPIs to be another report or email that sits on your desk or in your inbox. Make sure you actually do something with your KPI information. The ultimate goal of the KPI dashboard is to improve your practice’s performance and profitability. Use the monitoring results to uncover areas of under-performance and take steps to turn them around. Like driving a car, watching a KPI dashboard may not get you to your destination on time, but it can keep you from breaking down unexpectedly.
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Libby S. Hornibrook
Libby Hornibrook is a Partner in the Health Care Services Group. She provides accounting and consulting services to clients within the health care industry.
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