Blog Six Essential Metrics to Track for Practice Growth By Doug Schumann, 01.10.19 FacebookTwitterLinkedin At Clinicient, we spend a lot of time helping our clients prepare for long-term growth and expansion. Over the years, we have developed a good sense of the metrics to focus on when this time comes. Many practices grow “in spite of”, not “because of” their approach. What does this mean? They grow “in spite” of the fact that they have not adequately prepared. Sometimes folks are in the right place at the right time, and/or other circumstances have helped them succeed. Many practices do not scale “because of” the preparation they have put into growth. While this may have been the case for some practices and they are getting by, very few are able to truly flourish, reproduce the same results, and take that next step towards consistent growth. Developing a formalized process The best clinics and practices that we work with have developed a formalized process and methodology for everything they do. They have standardized most, if not all, aspects of their practice. This includes everything from how their front desk greets patients, to how their therapists document and engage patients, through what their cancellation policy is. Practices like this are the exception though, not the rule. In many practices, every time they add a new staff member it takes significant time and effort to onboard them because their policies and procedures aren’t documented or maintained. If your practice would like to scale and prepare for growth, here are a few metrics to focus on. Core Metrics Before considering growth, you want to make sure your core metrics are thriving. These include: Net Collections First Pass Payment (FPP) Denial Rates It is critical to ensure you have your A/R and Net Collections in a solid position and your team understands which behaviors result in high FPP and decreased denials. In many practices, simple mistakes can result in a large number of denials that could have been avoided by following some straightforward best practices such as verifying benefits and authorizations and avoiding “fat finger errors” when entering patient demographics. When deciding to scale your business, you want to make sure the core aspects of your practice are running efficiently and you can count on consistent cash flow. These metrics are non-starters. In other words, if you feel your practice isn’t running optimally, focus on improving these metrics before even considering growing your practice. Vacancy Rate Vacancy rate measures the percentage of empty space on a therapist’s schedule compared with the time they have available to see patients. It is typically calculated as your unscheduled time during the month divided by your total available time. A vacancy rate of less than 2 or 3 percent typically means your therapists are busy. You want to make sure you are maximizing the time your staff has available before making a decision to expand. Otherwise, you could have staff members sitting around without much to do. In many practices, regardless of whether employees are busy or slow, you may still be paying them for their time. If your vacancy rate is much higher than 3 percent, you will want to evaluate the reasons behind the vacant time to determine how to fill it. When researching this, compare it with your cancel/no show rate to determine whether the vacancy is due to cancellations or another reason. Some other things to consider to improve your vacancy rate: Reschedule all cancellations Schedule ahead for all patients Consider increasing the weekly frequency of your cases Incentivize your therapists for keeping patients engaged in their plan of care Develop a cancellation policy and no-show charge New Patients per Month compared to Vacancy If you are tracking the average number of new patients you are treating per month, compare it to your vacancy rate over the same time period. If your vacancy rate continues to decrease in conjunction with new patients, at some point the two will intersect, and at that point you will know it’s time to bring on another full-time therapist. You want to make sure you are setting the right expectations for your staff and providing them with additional help when needed so they know there will be an “end in sight” if they are taking on a large client load. Active Cases over Discharges As long as your team is doing a good job of maintaining your active cases and discharging all patients who have either completed their plan of care or self-selected out of continuing with their plan of care, this is a critical metric to review. If you have baselined the caseload for each therapist, you should have a good idea of what an optimal caseload looks like per therapist. If your practice is thriving, your active cases will be growing at a greater rate than your discharges. This metric will help you see how you are doing overall and determine whether any of your therapists are struggling with selling the value of therapy to their patients. 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 Charge/Payment per visit This metric should be reviewed across all therapists and compared to units per visit. Your team should be diving down into these metrics to ensure therapists are coding for all the time and work they are completing. If you have ever worked with a lawyer, you will notice that most are meticulous regarding tracking the time they spend with you – and frankly, they should be. The same goes for your therapists. It is critical that your team is taking credit for all of the work they are completing and there is consistency here to ensure you are able to scale as an organization. Well run practices don’t leave money that they are owed on the table. This metric also provides insight into what you are being paid by each payer and will help drive your decisions regarding which payers to accept and contract with as you expand. Therapist Productivity The main thing a clinic can sell is their therapist’s time and expertise. Measuring productivity on a timely basis is critical. Measuring by Appointments/Visits also provides a good comparative view to show which therapists may be overloaded, outperforming or underperforming in relation to their peers. How you manage your therapist’s time has a huge impact on their productivity and your cash flow. Each system tracks productivity slightly differently so it will be critical for you to baseline your practice’s productivity expectations. In some cases, if you double book, you can expect your productivity baseline to be over 100%. Key factors to watch are units per hour and percent of visit time billed. Once you understand how your practice is doing, you will be able to maximize your team’s productivity and establish expectations across locations. Customer Satisfaction/Net Promoter Score Understanding what your patients think of you will be critical to scaling your business. Many practices believe they are exceptional at what they do. Having said that, most practices have not invested any time or effort in truly understanding how they are perceived. Practices have several metrics they can focus on to understand how happy their patients are. The two most popular metrics are customer satisfaction and net promoter score (NPS). Customer satisfaction (CSAT) is a measure of how satisfied your clients are with the service they were provided. There are a number of tools you can purchase to develop a survey of customer satisfaction. Over the past few years, many savvy practices have focused on calculating their Net Promoter Score (NPS). NPS is a loyalty metric that tracks whether a customer would recommend you to a friend or relative. This metric is highly correlated with growth gains yet most practices have not considered tracking it. Research indicates that a high NPS score results in high customer loyalty which ultimately leads to consistently more revenue, higher profits, and more patient referrals. Tracking metrics like CSAT or NPS requires developing programs to follow up with detractors and develop strategies to improve your overall scores. While effort is required, the payoff can be significant. Systems “If you fail to plan, you plan to fail” – Benjamin Franklin. While not a metric, determining how many systems you have in place, and how effective those systems are, is a great indicator of the level of success you will encounter as you prepare to scale your business. At Clinicient, we work with our clients to provide them with templates to help grow their business. At Clinicient University, we help our clients develop their business plan and operational guidelines (or playbooks). If you truly want to scale, you will want to have developed a standardized approach to your business and systems to provide consistency across all staff members and locations. If you have systemized your business, and have developed a “brand” that is recognized, you should be well set for success. Best of luck!