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Improve Practice Productivity with KPIs


Key performance indicators are the best way to track physician and staff productivity in a medical practice to protect income and eliminate errors and redundancies in the office.

If you’ve been hearing the acronym KPI being used a lot, it’s not surprising.

KPIs are “key performance indicators,” and they’re considered the best way to track physician and staff productivity in a medical practice. Whether you operate a small practice or a multi-physician medical group, the KPIs are the same, according to Taylor Moorehead of Zotec Partners, a medical billing leader.

“We all have to deal with patients, we all have to collect insurance information, we all have to interface with those insurance companies, we all have to collect the money from the carrier, and then, based on the contracts that we negotiated with those carriers and the policies that they have with the employers and their patients, determine how much follow up we have to do with the patients,” Moorehead explains.

What does vary is the process: determining the level of importance each practice places on a particular benchmark.

Where to start

Moorehead points out that most practices will examine their accounts receivable and measure them against metrics for similar types of practices. But, he says, that’s just one measure. Productivity of practice staff is another very important measure. For example, a practice could have too much staff, but its other metrics are in great shape, so that’s okay.

“Or, you could have a scenario where you’re way over-staffed and your metrics aren’t good,” Moorehead suggests. “Well, that’s a problem. So, it all depends on what you set out as your primary goal. Is your goal to ensure that you’re getting your money’s worth; to save money; just to make sure you’re not doing something stupid? I mean, there’s so many different ways you can go. Based on what you want to get at the end of the line, you start there and work backwards.”

And as you work backwards, Moorehead says using decision support tools can help a practice establish and monitor key performance indicators.

A good set of tools

How can decision support tools and key performance indicators make a difference to a practice’s bottom line? Moorehead says to forget the productivity side of things for a moment and examine what he calls the “inexcusable types of games that the carriers play.”

For example, it could cost a practice twice as much to deal with Carrier A versus Carrier B, and yet Carrier A represents only 7% of the practice’s business, while Carrier B represents 30% of the business.

“It’s about elimination of errors,” Moorehead says. “The repeatable process things have to be eliminated. And if you don’t have a decision support program that can alert you to those types of trends, you know, employee trends, physician trends, payer trends — all of those trend abilities, you’re done.”

As another example, Moorehead points to patients phoning a physician’s office to schedule an appointment.

“If it takes a patient 15 minutes to [schedule an appointment], and if you’re not measuring all of those things like simple patient interaction points, patients may think, ‘Why am I going to come back when I can call your competitor or log in on the Internet and schedule my stuff online?’” Moorehead says. “If a patient calls back three or four times, it costs you five times what it should. So if you can’t pinpoint to those types of levels what things cost you, how can you improve on anything?”

Selling it to staff

What about medical practice staff? Does instituting key performance indicators make it seem as though management is checking up on them? Moorehead says it all depends on how the physician positions the change to his or her staff.

“The physician should say, ‘Look, I’m sorry that you have struggled all of these years doing these things over and over and over again. How tiresome could that have been? We’re putting these [decision support tools] in here to help you eliminate those redundant things that should never happen. So you can do the things that should happen,’” Moorehead explains. “The bottom line is that it positions the practice for the future.”

Implementing these performance benchmarks, Moorehead says, is more about income protection than income growth. Developing key performance indicators is not likely to result in a medical practice making significantly more dollars. It’s about having a reliable measurement process that enables the physician to predict what the practice income is going to be.

“Otherwise,” Moorehead says, “You’re just sticking your finger in the air with the wind and saying, ‘I think we should go that way.’ And that’s not a good place to be.”

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