Data Series Part 3: Healthcare KPI Pitfalls and Measuring Useful Results

Healthcare KPI pitfalls and measuring useful results

Once you have established key performance indicators (KPIs) that are measurable, influenceable, and have found that they align with a practice’s overall goals, the work really begins. After all, what good is data if you’re not going to use it? In order to determine how to actually use these healthcare KPIs that you have established, consider the following questions:

Benchmarking: What is “Good” or “Bad” for your healthcare KPI?

Do you have a target so you know whether the measured outcome is above or below your expectations? For example, establish net revenue per case as a KPI for your billing department. You then define each type of case, estimated revenue by payer, and develop an easy way to track the results. After the first month, your billing team showed revenue results of $350 per case? Is that good or bad?

For some KPIs, there may be industry data available to you against which you can measure. For others, you just have to go back in time to see what the KPI was historically. For new KPIs, it may require you to start tracking the KPI, but hold off on implementing it as a performance tool until a solid baseline is established.

How Many KPIs should Each Employee or Department Have?

If you can distill performance into one all-encompassing KPI for your surgical practice or group, that’s amazing. In most scenarios, you may need to establish 2-3 that help provide an overall picture of an employee’s/department’s performance. In accountable care organizations (ACOs), for example, they don’t use only cost savings as a KPI, they also incorporate quality data that CMS is also tracking, quality scores, readmission, annual wellness visit metrics, or mortality rates. Similarly, while staff productivity may be an important metric and align with a practice’s goals of increasing profitability, adding a second KPI related to customer/patient satisfaction ensures that increases in short-term productivity won’t have a negative impact on your longer-term customer loyalty is much more telling. And don’t forget to track team morale if you can! Pushing for new productivity goals that result in an unhappy team leads to attrition and longer term problems.

Always Ask: Is This an Individual or Group KPI?

If a group contributes to a larger success in a meaningful, objective way, tracking the KPI based on the group may yield more insight, while individual tracking can allow leadership to drill into the data and find people that may need more support, or identify roadblocks. If net income is a vital KPI for your company, that means everyone is clearly aligned with the same objective, but each person can only have so much influence on the outcome. Many growing practices balance this by establishing one or two common company-level KPIs while also having one or two individual-/department-specific KPIs.

A Few Things to Keep in Mind and Watch Out For when Implementing KPIs

  • In reporting, but especially with healthcare KPIs, there is no such thing as being “too clear.” Don’t just say “decreased patient turnover time.” Is this the time between when anesthesia end time for case one, and anesthesia start time for case two? Is it the time between anesthesia end time for case one and “wheels in” for case two? Does turnover vary by specialty? By type of procedure? Be as specific as possible so there is no confusion after the fact. Related, be transparent about the methodology/source for measuring the KPI. If you are going to track patient satisfaction using a multi-question survey, be clear about which specific question(s) are going to be included.
  • Nothing should be a surprise. Get team members on board before the first measurement. People should know what they are being measured on and how the data is being compiled.
  • For tracking, it’s best to have an independent tracking system. Perhaps there is software in place that will automatically track what you need. PowerBI is a common tool, but many EMRs will offer analytics- sometimes that can be limited to administrator and analyst user-roles. Similarly, many payers also have access, but do not by default, share the data they’re accumulating. It never hurts to ask. This can apply to any partners. Scope partner practices track a significant number of business and clinical metrics, some of which we’ve found clients don’t even track for themselves. As a rule, we share the data freely with clients, because as a secondary specialty like anesthesia, their success is our success.
  • Play it out in your head (beware of unintended consequences). If you establish reduction in 120+ day accounts receivable as a KPI, follow up to make sure that the decrease is due to an increase in cash collections, not increased write offs to meet the KPI. And if you establish one KPI, think though what else might be affected if someone only optimized that single KPI. For example, Wells Fargo measured many of its staff members by how many new accounts they could get customers to sign up for. That led to bank employees opening up accounts for bank customers without the customers’ permission.
  • Decide whether results will be made public or not. Healthcare KPIs can be sensitive. Additionally, you need to decide if you release a ranking of patient satisfaction by provider or individual provider utilization at a physician staff meeting? Or just let each person know what his/her individual results were? There is a time and place for each approach, just make sure it fits with your practice’s culture and overall goals.

Above all else, it’s important to remember that solid foundation of data gathering, establishing KPIs, and learning to use them can be daunting, but once that groundwork is laid, it’s there for practice administrators and physician leadership to use to take action from then on out, which is a victory for anybody looking to grow their medical practice.

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