Data: The Science Behind Growing Your Private Practice

icons in hexagons

By Chad Madden, PT, MSPT*

“Confront the brutal facts.”

In Jim Collins’ Good to Great, confronting the brutal facts is the crucial link between the “Buildup” phase and the “Breakthrough” phase of business growth. In order for a business owner—in any industry—to grow a business, they must know their numbers. Most fellow practice owners know this; we must know our numbers, we must work on our business, we have to build processes and systems. Ultimately, we do more of what works and less of what does not work.

Twenty years ago, we might have kept metrics on an At-A-Glance schedule book, then transferred the data over to an Excel spreadsheet or graphed the weekly and monthly trends by hand. Today, though, we are faced with a data problem. We have so much data to look at that it can be overwhelming.
“Which numbers should I be looking at on a daily, weekly, monthly, quarterly, or annual basis? Where should my numbers be? Once I have the data, what do I do with it?”

These are typical and significant questions for the private practice owner. This article will attempt to give a framework to streamline and understand our data in a more effective way.

START HERE: THE VITALS

When looking at the health of an individual, there are a few key vitals we measure and look at: heart rate, respiration rate, blood pressure, BMI (height and weight), and temperature. From these basic measures we get a glimpse of the overall health of a person. Certainly, we can explore deeper, get further diagnostics, and look at a myriad of other data. This deeper exploration is guided by what we find in the aforementioned vitals.

The same holds true for the health of PT Clinics. The vitals for a private practice owner are: new patients, visits, income, attendance rate, and production. These vitals give an idea for the health of a clinic. These are typically measured on a daily, weekly, monthly, quarterly, and annual basis. To get an accurate view, an owner should consider both a snapshot view and the trend for the given time period.

THE NEXT LEVEL

Beyond these basic vital metrics, the next step is to consider how each system is working. In the human health example outlined earlier, if an individual has elevated blood pressure, the clinician may order additional tests to further examine the cause of the problem. It is the same with an organization.

For example, the following are the next level of metrics for the primary systems in a private practice.

  • Marketing

    Vital Metric: New patients
    Next Level: New patients from physician referrals; new patients from reactivated past patients; new patients from direct-to-consumer; new patients from word of mouth

  • Front Office

    Vital Metric: Attendance rate
    Next Level: Percentage of new patients who schedule a full plan of care; percent of copays collected at time of visit; percent of new patient cancellations who reschedule

  • Back Office/Billing

    Vital Metric: Income collected
    Next Level: Accounts Receivable (A/R); A/R > 60 days outstanding; A/R > 60 days bucketed by payer type; personal balances; time to collect; ADO score
    Clinic/Treatment

  • Clinic/Treatment

    Vital Metric: Visits; Production (total $ billed or units billed)
    Next Level: Visits/New Patient; Graduation rate (percent of plans of care who meet their goals and are discharged); units/visit

This is not an exhaustive list of systems. A case can be made for Operations (legal, compliance, HR, ethics), Business Planning, and Personnel. They are necessary in the operations of any business and are best served to be looked at on a longer-term basis, quarterly or annually.

IMPLEMENTING THE BASICS OF DATA

A clinic director looks at her vital metrics for the past week.

  • New Patients: 14
  • Visits: 137
  • Income: $12,907
  • Production: 551 units billed
  • Attendance: 92%

vital metrics chart

Is this good? Is this less than optimal? To be fair, it is impossible to tell from simply the data listed here. To make a performance analysis with the snapshot alone is an error.

Consider the performance of the marketing systems by looking at new patients. Take a look at the weekly metric trends in Figure 2. A glance relative to the preceding weeks reveals a positive trend. Ideally, we want to do more of whatever is causing the increase in new patients. This will require a similar analysis of the next level of metrics: New patients bucketed by source type (physician referral, direct-to-consumer campaign, patient campaign).
For this example, the clinic director working in collaboration with the marketer determines physician referrals have remained static, but more past patients are coming in for additional care. What caused this? A record of the marketing activities shows a past patient email campaign plus a direct mail immediately preceded the increase. The marketer and the clinic director now can build a process around this marketing campaign (for example, put it in the marketing calendar). Long term, the clinic director can help her team build consistency in new patients.

Structured analysis and implementation should then be carried out for each vital metric.

Next, she looks at visits and production: 137 visits seen for the week, 551 units billed. With 14 new patients, a fair estimate would be this clinic is seeing 10 visits per new patient. This should be compared to historical data. If it is on par with what is normal and no new initiatives have been launched, then she can move on. If this is not normal, deeper digging is needed.

For example, let’s consider this clinic to historically average eight visits per new patient. Last quarter, when looking at the clinic’s graduation rate (number of patients who meet their goals and are discharged divided by the total number of plans of care started), the clinic director saw the graduation rate was 30%. She analyzed that 3 of 10 patients meeting their goals and graduating from physical therapy was less than optimal. She started a new process where patients now signed an agreed-upon treatment plan with the physical therapists on the first visit. This increased the graduation rate to 80%. The increased graduation rate checks out with two additional visits per plan of care. The new process is deemed a success and remains as part of the normal operating procedures.

Next to be reviewed is the units billed per visit. If 551 units were billed for the week, this is about four units per visit. The clinic director looks at this compared to historical clinic averages. Last quarter the average billed units per visit was 3.7. The director made a change to take objective measurements at each visit. The physical therapist has now implemented a process to perform progressive functional movements at each visit. This checks out. The new process is effective.

The director would then do the same for the $12,907 in income and the 92% attendance rate. She would compare this to the historical trends. Look at the deeper level metrics when there is an outlier: a deviation from what is expected to be normal.

In areas where the result is less than optimum, she would utilize next level metrics to more accurately identify the problem. In areas where the result is going better than expected, she would utilize next level metrics to identify the cause and ultimately make the process part of the clinic’s baseline operating procedures.

The ultimate goal is to do more of what works and less of what does not.

In the end, the result of prioritizing data and utilizing that data in a way to make more effective management decisions is a more predictable, scientific structure for practice growth.


Chad Madden

Chad Madden, PT, MSPT, , is a private practice owner in Harrisburg, Pennsylvania. He can be reached at chad.madden@maddenpt.com.

*The author has a professional affiliation with this subject.