There are several methods to grow your physical therapy practice, but the place to start is by analyzing your clinic metrics. Generally speaking, clinic metrics are a type of performance measurement or healthcare Key Performance Indicators (KPIs) that enable healthcare professionals to monitor, analyze, and optimize their processes to drive practice success.
Whether you're looking to increase revenue or enhance patient satisfaction, diving into your healthcare metrics is one of the best ways to better your PT operations. Read on to learn more about the importance of clinic metrics and the top five healthcare KPIs to grow your practice today.
Though monitoring physical therapy clinic metrics may not be the most exciting aspect of running a PT practice, it is quite essential. By assessing the various healthcare metrics accompanying a physical therapy clinic, PT professionals can more accurately gauge incoming cash flow, identify operational flaws, and enhance current processes to meet patient needs better.
Also commonly referred to as healthcare KPIs, healthcare metrics is a vital source of information for physical therapists to best understand how they can improve overall clinic performance. Enhancing performance enables PT practices to reach desired revenue goals and client satisfaction rates to grow a successful and profitable physical therapy practice.
However, reaping the benefits of clinic metric analysis is only possible if you know what to look for — and how often to look. A variety of healthcare KPIs relate to a physical therapy practice, so here's a breakdown of which clinic metrics matter most to your practice.
Several healthcare KPIs can aid in optimizing and growing your PT practice, from practice revenue to clinic productivity. Take a look at the top five essential performance metrics that physical therapists should be calculating and analyzing each month to support the growth process.
1. Net Revenue
Net revenue is the average reimbursement your PT practice collects per patient visit. This financial metric can be measured monthly, quarterly, or annually to gain a comprehensive view of your practice's general profitability, the health of your billing processes, and your estimated future growth.
To calculate net revenue, start with this formula:
Once you've calculated your general net revenue per visit, you can move to a per-patient or per-therapist basis. These more targeted approaches to net revenue provide a look into which payers offer the highest reimbursement rates as well as better insights regarding the performance of your practice employees.
2. Cancellation Percentage
Of the many patient metrics to track to understand practice performance and patient satisfaction, cancellation percentage is a top clinic metric to review. Cancellation percentage can be calculated per day, week, or monthly to understand how many patient appointments are fulfilled over a set period compared to the total amount of bookings.
Calculating a physical therapy practice cancellation percentage can help practice owners identify any negative booking trends more effectively and implement strategies to reduce overall cancellations. Physical therapy practices that fail to calculate this clinic metric risk losing a significant amount of revenue to various unacknowledged patient satisfaction concerns.
Most physical therapy practices should aim for a 10% or less cancellation rate. To understand if your current cancellation percentage is above or below the standard rate, follow this simple calculation:
3. Patient Acquisition Cost
Another clinic metric for physical therapists to gain better insight into the practice's financial standing is patient acquisition cost. This healthcare metric is used to understand the average amount of money needed to convert a potential customer into an established patient.
Client acquisition costs typically include all related marketing and sales expenses. To calculate the average monthly cost to acquire one patient, start by adding up all marketing and sales costs, from paid ads to email marketing. Then, use the sum of this data to complete this calculation:
With this number, physical therapists can compare the effectiveness of their referral and marketing efforts month over month to adjust where necessary. This clinic metric enables therapists to spend the least money possible to acquire as many new patients for their practice.
4. Clinical Productivity
If you're looking to grow your physical therapy practice to new heights, clinical productivity is one of the vital clinic metrics to pay attention to. This metric is a collection of various healthcare KPIs, including total units, total revenue, and schedule utilization per therapist, that assess the operational productivity level of each physical therapist and therapist assistant on staff.
There are numerous reasons why clinical productivity is vital for physical therapy practices. For one, an individual breakdown of each therapist's daily or weekly productivity reveals potential skill sets or capabilities gaps that may require more training. Secondly, clinical productivity can reveal operational redundancy or poor time management to streamline daily tasks.
With increased practice productivity comes better patient outcomes, higher chances of increased revenue, and enhanced growth trajectory. As various KPIs play a role in clinical productivity, there is no single calculation. Instead, set monthly revenue, billed unit, and scheduling goals for your therapists and compare these numbers amongst the team to gauge productivity.
5. Days in Accounts Receivable
Days in accounts receivable measures the average number of days it takes your PT practice to collect payment on outstanding bills for services rendered. This metric can be calculated monthly, quarterly, or annually. Payments can be collected from insurance companies for insured patients or from individuals for non-insured patients. An efficient system for collecting payments for services rendered is the highest priority to ensure your practice can continue providing its services. Measuring days in accounts receivable can help physical therapists identify and remedy weaknesses in the billing process. To calculate days in AR, you must first calculate the average daily charge rate.
Then you must divide the total accounts receivable by your practice’s average daily charges.
Your practice should generally aim to keep days in AR between 30-40 days. If your practice has a rate of >50 days in AR, this might indicate an inefficient billing process.
As you can see, there are quite a few clinic metrics to calculate and monitor to help encourage practice growth. With so much data to process, physical therapists need a practice management solution to help organize, monitor, and assess these various metrics over time. Fortunately, MWTherapy offers a robust suite of features to track clinic metrics easily.
Schedule a demo with MWTherapy today to learn how our practice management solution can help maintain practice productivity, monitor patient acquisition, and analyze financial data for ongoing practice growth and success.
