Understanding KPIs: Your Practice’s Pulse

Key Performance Indicators (KPIs) are the beacon that guides a practice towards its strategic goals. These measurable values not only demonstrate how effectively a practice is achieving key business objectives but also offer insights into areas of improvement. Whether it’s the overarching performance of your practice or the efficiency of specific processes within departments such as billing, KPIs serve as a critical tool for decision-making and strategy refinement.

Essential KPIs for Podiatric Practices

For podiatrists intent on maintaining the health of their practice while staying focused on patient care, here are key KPIs to monitor:

Annually:

• Total Cost per Patient: Measures your practice’s overall efficiency by dividing total operating expenses by the total number of patient visits.
• Total Variable Costs per Patient: Focuses on costs that fluctuate with patient volume, providing insight into variable expense management.
• Contract Rate Audit: Evaluates the reimbursement rates of the most frequently used CPT codes against the variable cost per patient, ensuring fair compensation.
• Payroll Trend: Analyzes payroll expenses over time, helping in workforce planning and financial forecasting.

Quarterly and Greater:

• New Patient Volume: Tracks the number of new patients, indicating the practice’s growth and market reach.
• New Patient Trend: Assesses changes in new patient volume over time, highlighting growth patterns or areas for marketing focus.
• Total Patient Volume: Measures the overall number of patients seen, reflecting the practice’s capacity and health.
• Total Patient Trend: Offers insights into patient volume fluctuations, aiding in operational planning.
• Per Visit Revenue: Calculated every six months, this KPI evaluates the revenue generated per patient visit, crucial for financial health assessment.

Monthly:

• Accounts Receivables Total: A critical indicator of cash flow, representing the total outstanding balances from patients and insurance.
• Claims Over 90 Days: Monitors the percentage of accounts receivable over 90 days; maintaining this under 20% is vital for healthy cash flow.
• Account Receivables – Patient Only and Insurance Only: Separately tracks receivables from patients and insurance, offering deeper insights into billing effectiveness.
• Monthly Charges and Collections: Evaluates the practice’s billing activity and revenue collection efficiency.
• Net Collection Ratio: A pivotal financial metric, reflecting the percentage of potential revenue that’s actually collected. A ratio under 85% may indicate issues, while 90-95% is considered good, and above 95% is ideal.