Key Performance Indicators ----How to Create and Utilize Them
To Optimize Medical Practices
Valora Gurganious, MBA, CHBC
Partner and Senior Management Consultant
Email: [email protected]
www.drsmgmt.com
Presenter:
VALORA SMITH GURGANIOUS, MBA, CHBC
DoctorsManagement, LLC
Your Presenter
• Senior Management Consultant and Certified
Healthcare Business Consultant,
DoctorsManagement LLC
• 10 years of Practice Management Experience
• 8 years of Investment Management Experience
• Vice-Chair of a multiple-campus Health System
Foundation in Florida
• MBA – Harvard Business School
• BA – Vanderbilt University
• Certified Healthcare Business Consultant
(NSCHBC)
• Lean Six Sigma “Champion”
DoctorsManagement, LLC3
• Over 80 Professionals with JDs, CPAs, MBAs, and Industry Professional
Certifications in
• Strategy Consulting
• Compliance
• Human Resources
• Credentialing
• Procurement
• Financial Management
• Analytics
• Process Improvement and Operations Management
• Our team has published numerous articles and studies, presented at national
organizations and academies.
• We have trained thousands of physicians, administrators, accountants and
other healthcare professionals in all areas of practice optimization.
What is a Key Performance Indicator (KPI)?
KPIs are a set of quantifiable measures
used to gauge the performance of an
organization in achieving its
strategic and operational goals.
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Why are KPIs Important?
Help the practice to focus on common goals and
ensure those objectives remain synchronized
throughout the organization.
Organizations should review their objectives
and strategies regularly and make
necessary adjustments to their key
performance indicators,
as the environment changes
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How is a KPI Useful?
• A KPI is a performance metric that measures an
organization's behavior, activities, and
performance.
• A KPI should support a range of stakeholder
needs from patients, to regulators, to payors, to
employees, to shareholders
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How is a KPI Useful?
KPIs apply both at the organizational and individual levels.
At an organizational level, a Key Performance Indicator (KPI) is a quantifiable metric that reflects •how well an organization is achieving its stated goals and objectives
Whether individual employees or departments are on track to process and outcome improvement
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Examples of KPIs for Healthcare Organizations
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KPI Examples
Provider Productivity Metrics
• Charges, Payments, Adjustments & A/R
•Gross & Net Collection Rate (Write-Offs)
• wRVU’s
9
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Gross & Net Collections
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Monitor Writeoffs
KPI Examples
Provider Time Management
•Schedule Utilization
• New Patient or Consult Wait Time
• Patient Time in the Office
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Schedule Utilization
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March Schedule Optimization: Template to Actual ReviewTOTAL NEW PATIENTS SEEN: 108 TOTAL PATIENTS SEEN: 1153
Monday Tuesday Wednesday Thursday Friday
Established
Patients
New
Patients
Established
Patients
New
Patients
Established
Patients
New
Patients
Established
Patients
New
Patients
Established
Patients
New
Patients
New
Patient
Total Total
Dr. A
Template 10.00 5.00 10.00 5.00 10.00 5.00 11.00 4.00 4.00 3.00 67.00Week:
Mar 1-3 0.00 0.00 0.00 0.00 12.00 4.00 14.00 3.00 7.00 3.00 10.00 43.00
Week:
Mar 6-10 14.00 5.00 12.00 5.00 15.00 5.00 15.00 3.00 5.00 1.00 19.00 80.00
Week : Mar
13-17 13.00 5.00 15.00 5.00 12.00 4.00 15.00 4.00 6.00 3.00 21.00 82.00
Week :
Mar 20-24 15.00 5.00 16.00 5.00 13.00 4.00 14.00 5.00 8.00 3.00 22.00 88.00
Week Of:
Mar 27-31 14.00 5.00 14.00 4.00 14.00 6.00 16.00 7.00 5.00 3.00 25.00 88.00
Avg Seen 14.00 5.00 14.00 5.00 13.00 5.00 15.00 4.00 6.00 3.00 19.00 76.00
Clinic
Utilization % 140.00% 100.00% 140.00% 100.00% 130.00% 100.00% 136.36% 100.00% 150.00% 100.00% 113.43%
NPP #1
Template 14.00 14.00 14.00 14.00 7.00 63.00
Week Of:
Mar 1-3 0.00 0.00 11.00 2 9.00 6.00 2.00 28.00
Week Of:
Mar 6-10 14.00 0 14.00 12.00 1 12.00 0.00 1.00 53.00
Week Of:
Mar 13-17 13.00 1 15.00 0 13.00 1 14.00 1 7.00 3.00 65.00
Week Of:
Mar 20-24 15.00 16.00 1 13.00 2 11.00 1 0.00 4.00 59.00
Week Of:
Mar 27-31 14.00 14.00 0 12.00 0 13.00 1 8.00 1.00 62.00
Avg Seen 14.00 15.00 12.00 12.00 7.00 53.00Clinic
Utilization % 100.00% 107.14% 85.71% 85.71% 100.00% 84.13%
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KPI Examples
Practice Financials
• Cash flow or Profit Center Reporting
• Budgeting: Based upon Percentages
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1. Advertising & Promotion 2,330.13 5,175.92 0.15%
2. Answering Service 586.96 4,703.38 0.13%
3. Auto Expense 0.00 21.44 0.00%
4. Bank & Merchant Fees 1,491.11 22,545.01 0.65%
5. Cleaning 1,539.21 14,579.21 0.42%
6. Computer Expense 2,537.50 15,087.95 0.43%
7. Continuing Education 3,930.00 6,940.00 0.20%
8. Contract Labor 0.00 0.00 0.00%
9. Donations 0.00 0.00 0.00%
10. Dues & Subscriptions 0.00 966.55 0.03%
11. Equipment Rental 616.10 4,908.02 0.14%
12. Insurance - Commercial Property 0.00 16,969.80 0.49%
13. Insurance - Health Reimbursement 0.00 0.00 0.00%
14. Insurance - Workers Comp 0.00 0.00 0.00%
15. Interest Expense 0.00 0.00 0.00%
16. Licenses, Taxes & Permits 0.00 0.00 0.00%
17. Meals & Entertainment 744.28 3,169.55 0.09%
18. Office Expense 869.79 4,501.58 0.13%
19. Payroll Processing Fees 256.45 2,132.70 0.06%
20. Postage & Delivery 327.01 2,009.55 0.06%
21. Professional Fees 5,563.33 59,322.30 1.70%
22. Repairs & Maintenance 877.56 11,287.51 0.32%
23. Supplies - Medical 2,752.91 75,441.68 2.16%
24. Taxes - Other & Real Estate 4.00 2,172.00 0.06%
25. Telephone/Communications Exp 1,371.94 10,690.77 0.31%
26. Travel/Meetings Expense 896.86 1,305.10 0.04%
27. Uniforms 0.00 2,725.19 0.08%
28. Waste Disposal 342.13 2,952.20 0.08%
29. Total 269,607.41 7.73%
\
Case Study: Independent Rheumatologist
GROUP TOTAL YEAR 2017
Number of Monthly Charges Monthly Receipts Monthly
Month Pt. Visits Charges per Pt. Visit Receipts per Pt. Visit Adjust
2011 Totals 6,311 2,364,768.00 374.71 1,229,116.00 194.76 1,045,792.62
2012 Totals 7,978 3,275,048.00 410.51 1,533,156.00 192.17 1,198,004.53
2013 Totals 9,970 4,309,674.00 432.26 2,104,235.00 211.06 2,318,266.63
2014 Totals 9,523 4,779,947.00 501.94 2,352,484.00 247.03 2,345,367.00
2015 Totals 12,774 5,781,909.00 452.63 2,918,075.00 228.44 2,807,143.00
2016 Totals 11,850 8,704,834.00 734.59 4,265,710.00 359.98 4,093,788.00
Jan-17 1094
674,398.46
616.45
352,237.16
321.97
295,524.26
Feb-17 1047
629,817.31
601.54
355,359.39
339.41
359,534.92
Mar-17 1182
895,556.47
757.66
437,438.37
370.08
387,499.17
2017 YTD Total 3,323 2,199,772 661.98 1,145,035 344.58 1,042,558
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E/M Utilization Statistics source CMS.gov 2015
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
NOV EOV NHV EHV OC
GS
FP
IM
NP
PA
• KPI may also involve a Coding Utilization Analysis to minimize Audit Risk
DoctorsManagement, LLC
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How To Create Your KPIs
Measures whether you are achieving
one of your strategic goals.
1. Define your Long-Term target (“goal”) 3-5 years out
•Should correspond with organization’s Strategic
Plan
•Should be KNOWN throughout the organization
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How To Create Your KPIs (continued)
2. Set your “stretch” target.
Long-Term Stretch targets can:
• “Swing for the fences”---
• Encourage the staff to get out of their comfort zone and be innovative
• Inspire them to achieve more than they thought possible
• Can only be achieved if you motivate them to reach
• Give a story, paint a picture with images and actions of what achieving that stretch target will look like
• Give them the support and resources to shift their performance and stretch
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How To Create Your KPIs (continued)
3 a) LAGGING indicators measures the output, which can be easy to measure but hard to influence---
this is the “what” of your goal
b)LEADING indicators measure the input, which can be hard to measure but easy to influence---
this is the “how” you achieve your goal
Set LAGGING & LEADING Indicators
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Lagging and Leading Indicator
Example----Weight Loss:
LAGGING Indicator (measurable result) is the weight showing on the scale at the end of your efforts
LEADING indicator (process, actions) would be the reduction in# calories consumed, and increase in # calories burned.
The actions are Leading Indicators (diet and exercise) directly impact the Lagging Indicator
(outcome=weight loss)
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Leading Indicators can help you track and improve processes in
Real Time
For example,
We want to know how many patients
fell and were hurt last quarter (lagging
outcome)
By learning that gait belts were not
used consistently to prevent high-risk
patients from falling from bed (leadingcauses of those outcomes)
Lesson:
Carefully examine your OBSERVED
PROCESSES daily in order to determine root causes of bad outcomes and
prevent recurrence.
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How To Create Your KPIs (continued)
Leading indicators help determine what you need
to do in order to meet your goals.
Once you’ve laid out your variables (or processes)
required to meet your target, you’ll be on your
path to achieving them!
LEADING INDICATORS
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How To Create Your KPIs (continued)
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LEADING INDICATORS
4. Make sure your Leading and Lagging
Indicators are synchronized.
a) Your customer, financial, process, and employee targets
should all be linked and realistic
b) If not, you will fail to meet the target because you lack a
a strategy, a budget and appropriate resources to
achieve them
How To Create Your KPIs (continued)
5. Once you’ve established your long-term
(3-5 year) targets, back into annual or
quarterly targets to measure progression.
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There are 3 ways of thinking about Achieving Your Targets
1.) Linear Improvement:
If you think achieving your target will be based on
consistent year-after-year improvement, then it is
very easy to define your annual goal.
Example: A linear target may be one that you believe will move by 20% every year for five years.
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There are 3 ways of thinking about Achieving Your Targets
2.) Decreasing Rate of Improvement:
Some targets will be based on fixing something that is outdated or inefficient, like a piece of equipment that breaks down or is slow.
If you replace it with new technology, you may improve your throughput times by 50% in year one—but that improvement may slow to 5% in years 3, 4, and 5.
This approach shows an immediate improvement that slows over time.
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There are 3 ways of thinking about Achieving Your Targets
3.) As a Long-Term Investment:
You may need to invest in a process that will pay dividends over a longer period of time.
If your organization invests in marketing, you likely won’t expect to see huge results in year 1 or 2, but expect to see tremendous results in years 3, 4 and 5.
This approach shows slow-going improvement that accelerates toward the end of a long-term target.
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Review: What is a KPI ?
A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively an organization is achieving key business objectives.
Organizations use KPIs to evaluate their success at reaching targets.
Each department will use different KPI types to measure success based on specific business goals and targets.
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How is a KPI Useful?
• A (KPI) sets a performance standard for an
organization, a business unit, or an employee.
• Goal setting means establishing what a person
or an organization wants to achieve.
•Goals should be Specific, Measurable,
Achievable, Realistic, and Time-targeted
(SMART).
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How is a KPI Useful?
•Process metrics are an invaluable tool for
organizations seeking to monitor, evaluate, and
improve their operational performance across the
enterprise.
•But for a combination of reasons, organizations
often fail to use process metrics to the extent that
they could and should.
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How is a KPI Useful?
•A process is an activity, or series of activities, that
converts an input to an output, by doing work.
•Processes only exist to add value:
• Improve health outcomes
•Contain costs
• Increase patient satisfaction
•Advance science and medicine
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What are the Benefits of KPIs?
Key Performance Indicators(KPIs) are a necessary part of
any healthcare organization that
aims for long-term success.
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Improved Patient
Outcomes
Increased Patient
Satisfaction
Higher Employee Morale
Improved Quality &
Value Performance
Stronger Financial
Results
Results of Using KPIs
For More Information:
Thank You for your Attention!
Web Site:www.DrsMgmt.com
Email Address:[email protected]
800-635-4040
DoctorsManagement, LLC
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