You Get What You Measure – Developing a Performance Dashboard for Your Medical Practice

Episode 53: You Get What You Measure: Developing a Performance Dashboard for Your Medical Practice

Hello and welcome back to season two of the Medical Money Matters podcast! We’re delighted to jump into this new season and to continue guiding you through the complexities of medical practice finance and operations.

Today we’re going to talk about driving performance and bringing financial insight and operational efficiency to your practice. It’s all about performance dashboards and why the old saw, “You get what you measure” couldn’t be more accurate.

So, why should we focus on metrics and take the time to develop dashboards? At the risk of answering a question with another question: how else would you measure the health of your medical practice?

We talk a lot about measuring our patients’ health, and we have some great examples of this: quality dashboards, full chem panels, diagnostic reports. Today, let’s focus on measuring the health of your business. How do you measure that? Do you rely on intuition, or perhaps gauge how things are going based on the level of tension in the room at staff meetings? Well, there’s a better way. The old saying goes: “If you can’t measure it, you can’t manage it.” And for good reason. Data and metrics provide a concrete foundation to assess your practice’s performance, helping you make well-informed decisions.

So, think of your practice as a patient. You wouldn’t diagnose without tests and data. Similarly, you can’t understand what’s working and what’s not working in your practice without numbers and analysis.

Key Performance Indicators, or KPIs, are the vital signs of your practice. These are specific, numerical metrics that provide a snapshot of your practice’s health, pointing you toward areas needing improvement and areas where you’re excelling. As an example, a KPI could be the average wait time for patients. We know this impacts patient satisfaction, and in the long run, practice growth. If the average wait time is high, it’s a sign that you need to investigate. What’s the root cause of the high wait times? Some groups have found that their front office staff needed more training, or they needed to move some of the registration function online or to a call center so it doesn’t cobb up the system. Some have found they didn’t have enough exam rooms! It’s great to look at the feedback from your KPIs and be curious about the underlying causes. It’s also important that you stay curious… if this feels like a witch hunt, your staff will quickly lose interest or become defensive. Curiosity is your friend.

Another KPI could be the revenue cycle time or Days in A/R as we discussed last season – how long does it take for you to get paid after you’ve rendered services? Time is money in the world of healthcare. KPIs serve as a useful yardstick not only for you but also for your team. When they’re clearly defined, actionable, and shared with your team, KPIs act as a motivator and a guide. They show the team what matters most and give them a clear direction.

Now that we know why metrics and KPIs are essential, let’s talk about how to organize this information. Enter the performance dashboard. A dashboard is essentially a real-time summary of your practice’s performance, presented in a way that’s both intuitive and easy to read – usually through visuals like charts and graphs. The dashboard should be accessible to the entire team and updated regularly. It’s kind of like the dashboard in your car, showing you speed, fuel level, engine health, and so on. It provides the most pertinent information at a glance, allowing you to make quick, informed decisions.

We typically recommend no more than five items on your KPI dashboard at any given time. More than that is difficult to track and your team will lose focus if there are too many items to track.

Now I can hear your question – there are way more than five things that are important to my practice! What happens to all of the rest? We suggest that your entire team focus on the dashboard, and that you always have the five most important things for your practice to focus on at that time. This list will shift and evolve as things change in your practice. You may feel that the finances in your practice are the most important thing to focus on at this time, and as those stabilize, and as performance improves you can shift the measures to focus on other things. Conversely you may feel that the quality of patient care needs focus first and you may only choose to have one or two financial measures.

Now that we understand that these metrics can shift over time, let’s get to the meat of the matter—selecting the KPIs for your group to start with. Here are some essential ones to consider:5421

• Financial KPIs: Revenue, Revenue per Visit, Days in A/R, Cost per Patient
• Operational KPIs: Patient Wait Time, Staff Utilization Rates
• Quality KPIs: Patient Satisfaction Scores, Readmission Rates, Infection Rates
• Growth KPIs: New Patients per Month, Patient Retention Rates, Patient Visits per Year

You don’t have to track every single one; just the ones most aligned with your goals, and your practice’s needs. As we’ve said, your dashboard is not set in stone. As your practice evolves, so should your KPIs. Always keep an eye out for new metrics that could offer valuable insights.

Now, the power of a dashboard is magnified when you implement feedback loops. These are systems in which the data collected through KPIs is used to guide behavior and decision-making in a continuous cycle. Indeed, feedback loops are essential for driving performance. Think of them as a medical check-up for your practice. Regularly examine your KPIs, identify areas for improvement, implement changes, and then measure again. This cycle helps keep your practice in tip-top shape. We work with groups that review these monthly or even weekly. Some use a green, yellow, red indicator to show if a KPI is on track – green, slightly off track – yellow, or seriously underperforming – red. These groups celebrate the green measures and talk about what’s going right. Then they keep an eye on the yellow ones and discuss action plans for any KPI that is in the red.

Building your dashboard may seem daunting, but it doesn’t have to be. Many platforms and services are designed to help you build a customized dashboard without requiring an IT degree. Services like Tableau, Microsoft Power BI, and even Excel can serve as excellent starting points. I think I’ve already confessed to being a bit of an Excel junkie, and I can assure you that you can build a perfectly functional dashboard using just that. If your team is ready to take it to the next level, you can look to Tableau or Power BI. They’re not necessary, but they do make the job easier if you’re dealing with a large group and a sizeable data set. They can also automate some of the data gathering and reporting tasks.

There you have it! Developing a performance dashboard is not a luxury; it’s a necessity. It can revolutionize how you understand and manage your practice, ensuring that it’s both financially viable and a great place to work. And remember, a well-designed dashboard, coupled with effective feedback loops, can turn your data into actionable insights, driving both performance and satisfaction for your team and your patients.

Please join me for our next episode where we’ll talk about Change Management and Why Change is So Hard in a medical group.