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Designing key performance indicators (KPI’s) can assist medical professionals to identify areas to improve their practice’s productivity and profitability. Real time monitoring of KPI’s highlights the strength of controls and processes within your medical practice. This becomes especially relevant when addressing succession planning, including an exit event.
Core benefits of using KPI’s
- Assigning responsibility and accountability
- Supporting real time decision-making
- Assist practice management gauge performance of individual staff
- Provide early warning signs
Setting a target
KPI’s should be linked to key goals and strategic priorities. Once measurement indicators have been determined, specific, measurable and achievable goals should be set for employees, teams and the practice. An easy place to start developing KPI’s is to review industry benchmarks. If currently below the benchmark, a concerted effort should be made to raise the practice to this level. From here, KPI’s should be specific to the practice, business plan and goals.
Set a specific date by which the necessary improvements must take place. You can set your KPI targets by individual/team/IGU (income generating unit) or for the entire medical practice. Individual and team-level targets drive competition. Bonuses or remuneration can then be linked to reaching KPI’s to ensure the desired outcomes are being driven within the medical practice.
Above all, employees and shareholders need to believe the new goal is achievable. Without buy-in from these stakeholders, the process is set up for failure.
Revise and monitor goals
To realise the benefits of KPI’s, continual monitoring needs to be implemented. At Pitcher Partners we can provide dashboards and regular advisory meetings to ensure KPI’s are appropriately monitored and being achieved. Regularity ensures strategies are implemented prior to a critical issue arising.
We recently identified a medical professional that had significantly increased their advertising spend; however there was no correlation with increased patient numbers (i.e. revenue). Through regular visual representation, the practice was able to refocus its marketing strategies to maximise value from each dollar of marketing spend.
Doctor KPI’s examples
Every general practice is different and will have different priorities, but the following are some examples for consideration:
- Consolidated monthly profit (practice and service entity)
- New patient numbers, total patient numbers, cancellations and appointment no-shows
- Patient waiting time (minutes)
- Number of lost productive hours
- Number of billable hours per month
- Dollars per hour of patient appointment time
- Dollars per day per room or break-even number of patients per day
- Treatment room expenses per doctor
Contact your Pitcher Partners advisor to help improve your profitability by setting and reporting on KPI’s.