Remember back in Physical Therapy school, how difficult it was to develop your first treatment plan? Which symptoms mattered? Which were unrelated? In time, you developed the skills you needed to intuitively diagnose and treat your patients’ medical issues. Over time, you developed a system to evaluate, plan and treat your patients.
Similar to the process applied in patient care, getting the outcomes you want from your business requires a data-driven, systematic approach we call Applied Business Intelligence. Here’s how it works:
It starts with defining and gathering business metrics, or key performance indicators (KPI) for your business. Key performance indicators help organizations achieve goals through the definition and measurement of progress. The key indicators are agreed upon by an organization and are indicators which can be measured that will reflect success factors. We’re not talking about pages and pages of reports here: in fact, quite the opposite. Instead, we’re talking about boiling your business down to a small set of performance indicators you track regularly.
Once you have measured the key performance indicators, it is important to drill down from the result and investigate the underlying drivers (i.e. what’s causing your KPI). You start with the key performance indicator, and then look for changes in underlying factors that lead to results. For example, if revenues are down at a particular clinic, what was the cause? Was there a drop in referrals? Was a therapist working fewer hours? Did therapist productivity drop? Did the payer mix change?
Once you understand what is changing and why, you can take specific action. When you‘re armed with understanding backed by facts, you’re in a good position to address the issue.
For example, let’s say revenues for a clinic have dropped by 10%. By drilling down, you find that the clinic has fewer scheduled visits with new patients this month than last month. Drilling down on your key performance indicators further, you find referrals have dropped off. Investigating further, you discover it was a specific doctor that stopped sending referrals. You’re ready to find the root cause. You call the doctor, and find she stopped sending patients because no one was following up to ensure those patients scheduled a visit. You’ve now established the link between lost revenue to follow-up on referrals. You implement a program to have the front desk staff contact all referrals to schedule appointments, and notify the doctor of your renewed commitment to their patients. You’ve turned a problem into a business opportunity.
Your business is like any living system, always changing. That’s why it’s important to have a system that makes it easy to constantly measure and manage your business. One thing is certain—the easier it is for you and your staff to measure, understand, and apply learning, the more likely you are to achieve the results that you’re after.
To learn about the 7 KPIs that successful practices measure, download our Tip Sheet.