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Practice Metrics: What are they and why do they matter?

You want to do more: hire more therapists, see more patients, make more money. But when you look at your bank account and realize that the money you have left after paying rent and payroll won’t buy you much more than a latte, where do you go from there? Chances are you quickly decide that you need to do something to increase revenue but, if you’re like many therapists we talk to, the prospect of trying to find that “something” to help increase your revenue can be overwhelming. Unsure where to start, you put this on the backburner and move on with your day and another pressing matter. Sound familiar?

What you may not realize is, you already have the secrets to generating more revenue in the reports section of your EMR software. And if you use it correctly, it can provide metrics and rich data that can help you uncover areas where your practice could be performing better and driving more revenue. Let’s dive into why metrics are important and a few examples of how to use them to make decisions that can help increase your revenue.

You Can’t Change What You Don’t Measure

To make informed decisions that impact your practice, you need to understand the various components that make up the flow of your business. This means having a basic understanding of the metrics for core functions that drive revenue like patient visits, therapist productivity, referrals, and A/R. When you understand the fundamentals of how metrics impact your practice, you can determine what is most important to you and how to monitor this. Once you get a feel for your average metrics, you can establish benchmarks and goals and begin to make incremental changes.

What metrics should you be tracking for value-based care? Download our free tip sheet to learn the most important metrics to track for value-based care success.

Download Tip Sheet

Small Changes, Big Impact

Here are a couple of practical examples to see how using data and tracking metrics can help you on the road to better revenue.

Example One:

Let’s say that your average visit reimbursement is $75 per visit and you’re trying to increase your patient visit count in an effort to increase revenue.  You task your front desk with converting one additional referral per week and your therapists with reducing unplanned patient discharges. As a result of this effort, your team ends up increasing your average visits per discharge from 6 visits to 7 visits.

These two tasks result in:

Front Desk Task: 52 new referral clients X 7 visits on average X $75 per visit = $27,300 in additional revenue per year

Therapist Task: $75 per visit X 1,500 patients per year = $112,500 in additional revenue per year

Example two:

Your goal is to ensure your therapists are documenting for all of the billable time that they’re spending with their patients. You install a large clock on the wall of your treatment area and ask that they indicate the exact time that they start and end their time with patients and you ask them to carefully document how they are spending that visit time. After review of the data, you discover that, on average, your 45-minute appointments are lasting 60 minutes and are averaging an extra unit per visit. What does this mean? If your average payment per unit is $25, you have increased your payment per visit from $75 to $100.

$25 increase per patient X 1,500 patients per year X 7 visits per patient = $262,500 in increased revenue per year

Giving your therapists visibility into this data and letting them understand how their attention to detail can affect revenue provides a great learning opportunity for your entire team. As you can see, huge changes don’t need to be made to have a major impact on your revenue. Rather, by starting small and focusing on one or two metrics, you can greatly increase revenue without overwhelming you or your team. In fact, the biggest mistake we see practice owners make when diving into metrics for the first time is trying to do too much at once.

Start small to go big. Ask your team to make one or two small changes each day, then track and measure progress. Use the data to understand the impact of the changes, then reevaluate your plan if needed.  Far sooner than you expect, you’ll see an uptick in revenue which you can use to reward your team, expand your business, give your team raises, invest in a better healthcare plan for your employees, or even go on vacation.

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