A key performance indicator is a quantifiable measure a company uses to determine how well it’s meeting its operational and strategic goals. Different businesses have different KPIs depending on their individual performance criteria or priorities. That said, the indicators usually follow the same set of characteristics.
Common KPI Characteristics
There are four defining characteristics of KPIs:
- KPIs are Quantitative. KPIs are presented in the form of numbers.
- KPIs are Practical. KPIs integrate with existing company workflows and processes.
- KPIs are Actionable. KPIs can be easily analyzed and put into action.
- KPIs are Timebound. KPIs need a specific time frame to effectively determine performance.
To be effective, a key performance indicator must be based on legitimate data and must provide context that echoes your practice’s objectives. If you are interested in understanding how your no-show rate is impacting your revenue flow you can create a KPI to measure that impact. Conversely, you wouldn’t track staff attendance rates if that is not a pressing issue for your practice.
What types of KPIs Can You Track
KPIs can be created to track just about any aspect of your practice’s operations. Common KPIs include:
- Customer (Patient)
The key is focusing on what matters most to your practice. It also requires a commitment by you and your team to track the metrics, report on progress, and act on the data – otherwise it is a fool’s errand.
Defining Your KPIs
When choosing key performance indicators, your practice should start by considering the most important goals and objectives for your business. Is it revenue? Patient volume? Satisfaction rates? Operational efficiency? Once you have your list identified make sure to ask – can these be turned into measurable KPIs? Next, identify whether the KPIs will help in assessing the company’s progress against its stated strategies. Finally, you need to make sure that the KPIs selected are clear enough so that everyone in the practice can understand them.
Your practice doesn’t need a specific number of KPIs. In general, the number usually ranges from four to ten for most businesses. Whatever number you decide upon, just make sure the KPIs are crucial to business’ success. Remember, if everything is important, then nothing is important; so be selective.
Why Is It Important to Track KPIs?
- KPIs monitor your practices’ vital signs. Setting the right KPIs help you measure your progress towards your long-term business goals.
- To make adjustments & stay on track. In addition to your results, you also need leading indicators to let you know when you’re in danger of missing targets. KPIs can help you predict what will happen in the future allowing you to plan and adjust accordingly.
- To solve problems or tackle opportunities. Use a combination of KPIs in a dashboard so that you have the right information at your fingertips to solve problems or tackle opportunities. Let’s say you are in a patient slump. Identify a handful of KPIs that can help you turn the tide (maybe it is # of outbound calls, # of reminders sent or the engagement from those reminders, no-show rates). Put them on a dashboard and track them weekly to see if you’ve found the right lever that helps you generate more predictable patient volume.
- To analyze patterns over time. If you measure the same KPIs quarter over quarter, you can begin to detect patterns in your numbers. There are countless ways these patterns can help you in your practice.
Incorporating KPIs into your practice strategy doesn’t have to be intimidating. Start small and build your KPIs as you become more comfortable with the process. We recommend starting with financial KPIs as your EHR and PM systems include financial reports that can help you quickly track and measure your performance.