Gaining a good grasp on what is working for your practice and what isn’t is paramount in ensuring its longevity. Keeping track of every facet of a healthcare practice helps physicians to understand how profitable it is, what services patients are seeking the most and, most importantly, whether or not change is needed. When it comes to turning a profit, getting a clear look at your metrics should be done on a consistent basis.
Many small business owners may overlook the importance of reviewing the metrics of their practice but in the startup world, metrics are the bloodline that keeping the practice alive, allowing it to grow and maintain, or redirect, to a path to success. While some may take the time to monitor the number of patients seen per day, prescription orders made or return visits booked, these metrics fail to show the “long-haul” potential for advancement.
Here are three metrics you may not have thought to look at:
Revenue per visit
More than simply looking at how many visits your practice gets in a day, week or month, determining the average profit from your visit will help you establish whether you are truly growing financially or if you should look into increasing your service charges. Calculate the net profits from each office visit by figuring out the average amount collected from patients following their visit or collections from insurance, should you accept it. Once you have established the average charge paid to you for each visit, subtract the average net cost of conducting a visit. This will help you gain a more accurate understanding on how much money your practice actually stands to gain with each appointment.
Revenue per square foot
The thought could seem trivial to you but considering the notion that you could be paying for more space than what is actually needed at your practice could help you save on monthly overhead costs. Paying for a facility that is too big creates added expenses such as increased light, water and maintenance bills. Find out if you could be wasting money on unused space by taking your last annual revenue statement and dividing it by the total square footage of your practice. This will give you a realistic picture of whether or not downsizing is needed. If the number is low, $61 or lower, you could be paying too much for your location. If the number is high, $550 or higher, you may need mull over the option of finding a bigger office. A study conducted by Advance Healthcare Network showed that the median annual income per square foot is about $203.
When it comes to ensuring the long-term success of your practice, patient satisfactory can be touted as the “Holy-Grail” of indicators. No matter how much you advertise or offer special promotions, patients who fail to return to your practice will eventually have a huge impact on its future growth. Gauge the level of patient satisfaction with your practice by measuring how likely they are to refer you to a family member, friend or colleague. Net Promoter Community offers a unique way to determine how happy your clients are. With a 0-10 scale, ask patients to rate how likely they are to refer someone they know to your practice. Score the results and group patients according to the following categories:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Feel free to add other questions that offer the opportunity for more detailed results, such as what services they like most, what services they dislike most or if they feel the staff is courteous and welcoming. Just keep in mind that all answers work to answer one simple question: Would they tell a friend that your practice is worth the visit?
There are tons of metrics that can be gathered to see if your practice is sailing easy or struggling against the current. These three tips are a great way to get your started and could be metrics you never considered evaluating. Once you have determined what metrics work best for your practice, create a clear calendar to benchmark its success in order to keep track of current trends and upswings in business.
What metrics do you use to report on the success of your practice? Share your comments below!