You might have heard people talking about KPIs (“Key Performance Indicators”) and wondered what all the fuss is about. This post is the first in a series that will provide knowledge on what a KPI is, show how they can work to measure business performance and finally provide you with some KPIs that are used by others in the industry and may be relevant to you.
A KPI is a measurable value that allows an ‘at a glance’ demonstration of the effectiveness of an entity in achieving their key business objectives. A KPI allows the financial data from your business to be standardised – meaning you can compare and contrast against different locations, different consultants or even different procedures on a like-for-like basis. KPIs allow you to identify and effectively measure the information that is relevant to your business performance and objectives as well as providing a point of focus for owners and managers to direct their efforts.
To create an effective KPI, you want to focus on a specific process within your business that contributes to the overall goals you are looking to achieve. For example, if you were a call centre and had the goal of achieving great customer service then a suitable KPI to track would be your average call waiting time.
Not every business need or should use the same KPIs. As previously mentioned, KPIs should be tailored to achieve the goals and priorities of the business. There are a few popular KPIs that most businesses within an industry will use. The KPIs should be a mixture of financial and non-financial KPIs. While it may be easier to track financial information by extracting financial data from your profit and loss, a non-financial KPI may be more relevant for a doctor or practice manager to directly affect change through their actions to achieve the desired outcome.
You should apply a degree of care when designing your KPIs, as the narrow scope you view a KPI with may cause unintended negative consequences. For example, looking at a KPI to measure the number of patients per hour against a set target for each GP may create the risk of a declining patient experience. It may also ignore collaborative outcomes that provide financial incentives such as GP management plans, which can improve a patient’s treatment outcome, a practitioner’s patient retention rate and the average income per patient .
The team at Abbotts have put together what we believe to be an essential list of KPIs to assist your understanding and improve your practice. Below are the first two KPIs from our select list. Please keep on the lookout for future blog posts within this series, where we will detail KPIs 3 through to 8.
Average Patient Wait Time
This KPI calculates the time it takes on average for a patient in your waiting rooms to be seen by a medical practitioner. A higher wait time may indicate issues with staffing that should be addressed in order to maintain a high level of patient satisfaction. A low wait time should be aimed for and if achieved this shows efficiency within the practice from both the clinical and clerical staff.
To calculate the metric, you will need to measure the number of patients your practitioners have seen in a set time range and the total collective time those patients had to wait across that same period. Both pieces of data are available from reputable practice management software, with your clerical staff providing inputs to the system to maintain its accuracy.
In a formula, the KPI is written as Average Patient Wait Time = Total patient wait time / number of patients.
Patient Growth Rate
As your practice looks to expand and have a wider impact on your community, a simple metric you can use to report on this change is the patient growth rate.
To calculate this KPI, first you need to find the movement in patient numbers over a specified time period. This is then divided by the total number of patients you currently have at the practice. Adjustments can be made to this KPI based on the activity of your patients – you could limit the “total patient” figure to only be patients you have seen in the last 12 or 24 months.
Patient Growth Rate = (Total patients [now] – Total patients [start of period]) / Total patients [now]
The growth rate will indicate the level of new patients appearing to appointments with the doctors at the practice and if used in collaboration with other data such as a doctor’s productivity rate, this can aid in determining policies such as discounted private consultations or advertising. By interpreting this information, you can investigate if there are issues of inefficiency with a doctor, a decline in appointments requests, or quite simply that the doctor has enough repeat patients to fill their current working schedule.
If you have any questions, or would like to learn other tactics to gain a deeper understanding of your business, please contact us today.