Every business wants to maximize their profits and minimize their losses but in a healthcare practice, profitability is more difficult to assess. The larger and more complex the group, the more challenging the task becomes.
Determining and improving your financial “health” as a healthcare enterprise is similar to working with a patient. You need to assess your current financial condition, problems and symptoms, come up with an accurate diagnosis and then develop and implement an effective treatment plan. This will allow you to achieve and maintain your best possible financial health.
Be sure to check out the book, ‘Physician Heal Thy Financial Self’.
True profitability is more than just focusing on your current financial status. Profit “ability” is ultimately about how well you directly influence the profits of your organization. This Profit “ability” requires you to understand the underpinnings of your business in the key areas that affect your profit.
In this context, you need to think of KPIs not only as Key Performance Indicators but also as Key Profit Indicators. Sometimes those KPIs may be the same, but good performance does not always translate into good profits – particularly in the business of healthcare.
Key Profit Indicators
- Big Picture KPI: Overall profit margin for the business
- Expense KPIs: Overhead and variance from budget
- Revenue Cycle KPIs: Collections as a percent of gross charges, days in AR, clean claim rate, etc.
- Provider Productivity KPIs: Work RVUs, per visit values
How We Help
Our Profitability Assessment Specialists will do a full workup on your Key Profit Indicators, give you an accurate diagnosis, and develop the right prescription for your optimal profitability. We’re also able to help you implement our recommendations and assist with ongoing measurement of your practice profitability.