The What, Why, and How to Get the Most from Your Dashboards
Trouble can start when you don’t have a regular maintenance plan.
By Mike Osler, PT, DPT
I can still remember the look on my dad’s face when I told him the car ran out of gas—in our own driveway.
I saw this as an amazing feat of perfect timing. Rather than being stranded on a roadside without gas, I was home! My dad was much less impressed to say the least. The fuel gauge in a car is a simple indicator, which as I learned at age 17, is worth checking every time you get behind the wheel.
Your vehicle’s dashboard provides a lot of valuable information, some useful daily (like the gas gauge), some useful by the minute (speedometer), and some useful every few months (oil change indicator). All this information tells you what is happening with the vehicle and allows you to make informed decisions based on the information. Trouble can start by not checking the gauges at the right times, or not acting on the information provided on your dashboard.
Managing key performance indicators (KPIs) in a physical therapy business is not all that different from monitoring the gauges in your car. Business owners must look at the right information at the right time to learn what is happening in their company. Owners must decide how often to check which metrics and when or how to implement action plans based on the results. Checking specific KPIs daily may be more information than necessary, while neglecting them for a month or two may cause you to miss warning signs of trouble or golden opportunities to invest more resources in the right places.
THE RIGHT METRICS AT THE RIGHT TIME
On a weekly basis, the most valuable KPIs for a therapist should be reviewed and shared with staff. A good weekly dashboard for a physical therapy business will provide staff with the most important information that can be influenced daily with small but meaningful changes. These KPIs commonly include:
- new patients
- patient visits
- units per visit
- visits per hour
- units billed per hour
- visits per new patient
- patient arrival rates
It is important to appreciate the timeframe for expected changes. Some metrics can change in short periods of time while others will take several weeks or months to see a change. Procedures or units billed per visit, for example, can improve immediately with appropriate staff training. Visits per new patient, on the other hand, may take several weeks to see improvement. Consider creating a simple dashboard for weekly operational metrics that measure patient and staff engagement, such as the example in Figure 1.
While a weekly check-in on operational KPIs maximizes the opportunities to ensure patient and staff engagement, financial and a few other KPIs are best reviewed monthly. This will allow enough data to paint an accurate picture of trends. Comparisons to the same month last year and key financial ratios such as labor cost and revenue per visit ensure the company is on a healthy financial trajectory and meeting or beating national benchmarks. Consider tracking the following financial KPIs (see Figure 2):
- revenue per visit
- labor cost per visit
- NOI (net operating income) per visit
- new patient acquisition cost (marketing spend/NP volume)
Looking at Net Promoter Scores monthly can also be an appropriate timeline.
In addition to weekly operational metrics and monthly financial metrics, some additional numbers should be assessed quarterly. Two key areas are marketing and billing performance.
While most practice owners pride themselves in evidence-based practice, few owners take the same approach to measuring the success of new marketing initiatives. By tracking growth of new patients by quarter, the impact of new initiatives can be measured to see if they should be continued. Tracking NP (new patient) growth by referral segment (past patient, physician referral, digital marketing, and community outreach) provides owners with clear data on which segments are growing and which are retracting.
Billing performance is another area that should be assessed on a quarterly basis as monthly fluctuation can make it difficult to assess true trends. Collections as a percentage of allowable charges (charges minus contractual adjustments), DSO (daily sales outstanding), revenue per visit, and percentage of total AR (accounts receivable) over 90 days are all good metrics that will assess revenue cycle performance whether billing is performed in house or by a contracted party.
Staff retention and revenue per clinical FTE are also helpful to look at on a quarterly basis. These metrics can provide a good indication of the production and stability of the company’s top asset, its staff. Figure 3 shows a sample of key metrics and a suggested frequency for tracking each.
ACTION PLANS FOR YOUR BUSINESS
When considering what metrics to include on weekly, monthly, and quarterly dashboards, there are a few key principles to create enough depth to appreciate what is happening in your business and enough simplicity for your team to interpret and implement appropriate action plans.
- Create a balanced scorecard for the key areas of running your business. At a minimum, this includes operations, finance, marketing, and revenue cycle management.
- Resist the temptation to include too many numbers. An overload of information can lead to paralysis by analysis or simply not knowing where to start.
- Pare down the KPIs included on your dashboard to those with the biggest impact on the business. Units billed per visit (UPV), for example, can create a significant impact in a short period. For a practice seeing 200 visits per week, a change to more accurate coding might generate an additional $2.50 in revenue per visit. The result is more than $20,000 of net income for work already completed.
- When sharing dashboards with staff, keep the ‘why’ top of mind. While data should be used to run a business, the data simply tells the story of what is happening in your clinic and reflects the actions of the team. A successful private practice will balance staff engagement, patient engagement, and creating operational and financial stability for the organization.
- Use KPIs that can be easily tracked. Spending excessive time tracking down data would be better spent analyzing data and implementing action plans. Take the data available and record it in Excel so you can see trends over time. Leverage technology and automate when possible, to eliminate inefficient tracking.
In a Google search of images for “dashboard,” you will realize dashboards are no longer just about your vehicle, but an abundance of data presented in visually appealing graphs and charts. With so much data available, selecting key KPIs and the right timing for reviewing the data will increase the stability, growth, and impact of your business. Create your dashboard today because running out of gas is bad news, even if it is in the driveway!
Mike Osler, PT, DPT, is a Senior Consultant specializing in strategic growth, operational efficiency, leadership development, and staff engagement with 8150 Advisors. Mike can be reached at email@example.com.