How to use KPIs to Manage Your Health Practice
Have you tried using KPIs to manage your health practice? If you’ve ever wondered things like “How are we tracking this month?”, “Do we have fewer new clients than usual?”, “How is our new practitioner going?” or, “It feels busy – but are we really busier than last month?”, then you need some metrics in place to give you the answers! KPIs can tell you all of this (and more) and help you make informed practice management decisions.
When you started your own private practice, you probably had a strong drive to provide a certain type of care and services for clients. Running your own practice gives you the freedom to do things the way you want and provide service in line with your vision. But pretty soon most practice owners come to realize that there’s a lot more to running a private practice than just providing great service. This is especially true once you have other practitioners involved! Having a solid practice management system like Zanda in place helps you improve efficiencies and processes, but on top of that, you also need a way to measure the key outcomes of the practice so that you have a grasp of how things are going, and what might need improving. This is where KPIs come into play…
What are KPIs?
KPIs, or Key Performance Indicators, are the primary metrics used to measure the performance of your business. They should be the few, most important, factors that are measurable and tell you vital information about the status of the business.
Having a set of KPIs to refer to helps put your attention and focus onto the right things. We might think we’re doing this naturally and we already have our finger on the pulse, but as Peter Drucker famously said:
“What gets measured, gets managed.”
…so it’s important to choose the right factors to focus on.
KPIs can be a great help to managing your health practice, driving decisions, and helping you steer the practice towards increased performance. Which means that you can service more people and do more to fulfil the original vision you had for the practice.
Of course, KPIs can have many names. For instance, Clair from Lawson Psychology and also a coach with Clinic Mastery uses a clinician dashboard and refers to KPIs as “CEIs” – Clinical Excellence Indicators.
Clair says; “Tracking clinical excellence indicators allows practice owners to observe trends across the clinic and for individual clinicians. These statistics help us to understand how we can optimize our client experience, engagement in therapy and outcomes for clients.“
What KPIs should Health Practices Use?
There are many options for KPIs and they will vary according to the type of practice you operate, your stage of business growth, and your own goals for the business. However, there are some KPIs that almost all health practices should track regularly.
Based on our own experience managing health practices and consulting with the thousands of practices that use Zanda, a starting set of the most important KPIs to monitor is as follows…
KPI #1: Revenue
Top line sales figures are usually the most important metric for any type of business and health practices are no exception to this.
As well as tracking revenue for the clinic overall, you might also want to track this for each practitioner so that you can analyze profitability on an individual basis.
Why Track Revenue?
Your revenue is what pays the bills and enables you to provide the services to clients. Please note that focusing on revenue does not make you ‘money-hungry’ or any other stereotypes that might come to mind. In fact, being on top of your revenue numbers makes you a smart business owner.
How to Track Revenue?
It’s easy to get your revenue figures from Zanda. Just go to Reports > Financial > Sales. This report allows you to filter by the date range, practitioner and other filters. It’s usually best to include “Paid and Unpaid” invoices and to search based on the “Invoice Date” to get accurate revenue numbers. (We’ll consider your payments and cash flows in another KPI.)
KPI #2: Practitioner Utilization
Utilization can also be referred to as an Efficiency measure, or simply a Contact Hours measure. Ideally, it should be measured as a proportion of the practitioner’s available hours – so that the part-time and full-time practitioners can be measured equally.
Why Measure Practitioner Utilization?
This statistic is really important as it is an indicator of a clinician’s caseload. As an example, Claire from Lawson Psychology says: “If over 85% of our clinicians available appointments are used, then we know that the clinician is busy.”
It is unreasonable to expect that practitioners will ever be at 100% utilization, but you should set targets for this metric based on your own experience for the type of services you provide.
How to Measure Practitioner Utilization?
Again use the Sales report found under Reports > Financial > Sales. Then, if you are selling both products and services, you may want to choose the Type as Services and Session Packs and Group by this figure. You should see a Total Time figure there, and again, you will want to run this for each practitioner and for the clinic as a whole. These figures should be compared to the available time each practitioner works each week.
KPI #3: Appointments Booked
This is simply a measure of how many appointments were booked in the week.
Why Track Appointments Booked?
As well as revenue, appointments booked is another measure which tells you information about how well your health practice is going from a client’s perspective. For example, if a lot of appointments are being booked then it suggests that clients are happy to have their health needs provided by your practice. The number of appointments booked however should be viewed in context of the revenue generated. Sometimes you might have a lot of appointments but revenues are low – which could indicate the mix of appointment types has changed, the length has shortened, or the pricing may need adjusting.
How to Track Number of Appointments Booked?
In Zanda, just go to Reports > Clients > Appointments. To get this first number, you should include all Appointment Statuses. When you run the report, you’ll see the total number below the report.
KPI #4: No Shows
“No Shows” or “Failed to Attend” is the metric to record how many people didn’t show up for their scheduled appointment.
Why Track No Shows?
No shows are extremely costly to practices – in terms of the lost opportunity for billable time, but also for practitioner morale. They can also be an indicator of client engagement and motivation.
If you’re using automated Appointment Reminders in Zanda, then you have probably reduced these substantially. But for a health practice, they’re still worth tracking.
How to Track the Number of No Shows?
Simply use the same report above under Reports > Clients > Appointments, but then apply the “Appointment Status” filter for “No Show”. If desired, you can also measure this by a practitioner.
KPI #5: Cancellations
Cancellations are simply the number of appointments that are cancelled.
Why Measure Cancellations?
Similar to No Shows, client cancellations are costly to the business and trends in this area can give you clues as to clients’ engagement and satisfaction with the service they’re receiving.
How to Measure Cancellations?
Again, use the Appointment report found under Reports > Clients > Appointments, and then apply your “Appointment Status” filters for cancellations – usually “Cancelled” and “Late Cancellation”.
KPI #6: New Clients
The number of new clients your clinic is seeing each week is also an important metric to measure.
Why Measure New Clients?
A growing number of new clients indicates that the marketing your practice is doing, or referral networks you have are working! If you are not seeing a steady stream of new clients coming through the door, then your retention essentially needs to be 100% for your practice just to stay at the same level – which is almost impossible for most practices.
How to Measure New Clients?
It’s easy to get the number of new clients you’re seeing from Zanda. Just go to Reports > Clients > New Clients and you’ll see them there (scroll to the bottom for the total). You can choose to measure this based on the “Date Client Added” or “Date of First Appointment”. Either is fine, but just keep it consistent. You can also filter by a practitioner to see who new clients are being allocated to.
KPI #7: Client Rebookings
As well as new clients, the other side of this is client retention. There are many different ways to measure retention, however for health practices, a simple proxy for this is to measure how many clients you see in a week that have no future appointments booked. This puts the focus on whether your team is doing a good job at rebooking clients.
Why Track Client Rebookings?
We prefer to use this KPI as it is a practical metric that can help drive behaviors that will improve client retention, namely booking clients into their next appointment.
How to Track Client Rebookings?
To get this KPI, in Zanda, go to People > Clients > Advanced Search, then enter the week dates in “Had an Appointment Between”, and turn on the “No Future Appointments” filter. You can also filter this by the “Appointment Calendar”.
There’s also a Client Retention report in Zanda (under Reports > Clients > Client Retention), but this is intended more for a longer-term view of the average number of appointments for each client.
Pro Tip: Zanda makes client retention easier with recall automations. When you create an automation to recall inactive clients, Zanda automatically sends an SMS or email and creates a task for your team members according to your selected conditions, using the communication template of your choice.
KPI #8: Outstanding Accounts
The final KPI measure that we consider essential is a measure of your Outstanding Accounts, and particularly, how much is overdue and how overdue is it.
Why Measure Outstanding Accounts?
Your outstanding accounts have a huge impact on cash flows, and as we all know, “cash is king!”. If your outstanding accounts are creeping upwards, especially your overdue accounts, this is an indication that you need to improve the way you collect payments and chase up clients with overdue bills.
Pro Tip: Every Zanda account includes invoicing automations that allow you to send invoices automatically, including follow-ups for outstanding payments.
How to Measure Outstanding Accounts?
In Zanda, you’ll see details of your Accounts Receivable under Reports > Financial > Accounts Receivable. This is what you’d use for actually chasing up overdue accounts. However, for this KPI reporting, go to Reports > Financial > Aged Receivables. There, you’ll see the totals of the amounts owing under 0-30 days, 31-60 days, 61-90 days, and 90+ days.
How to Create a KPI Dashboard
Zanda makes it simple to monitor your practice’s metrics with the Practice Dashboard feature. You can configure the Practice Dashboard according to your needs with report data that includes appointments, new clients, and income.
Click here to learn how to access and manage the Practice Dashboard.
If you’re not using Zanda, or you’d like to track additional metrics, you should create a KPI Dashboard for your practice. This is usually a spreadsheet where you will enter these numbers on a weekly basis to keep track of the trends.
To help you create your own KPI Dashboard, we’ve prepared a template for you to follow. This is an Excel file that you can download and configure to suit your needs. To use this template:
- Change the practitioners to the names of your actual practitioners (including yourself if you see clients);
- Change the currency to suit your country (if it’s not already set that way);
- As the weeks go by, fill in the areas on the KPI inputs sheet that are in light blue;
- See your charts on the Practice Graphs sheet;
- Configure to create individual charts for individual practitioners.
How to Use KPIs in Your Practice
The Zanda Practice Dashboard (or your own custom dashboard) is something that you should regularly refer to as part of managing your practice. Many practice owners also have a review of their dashboard as an agenda item for team meetings.
Some practices also like to break everything down by practitioner and discuss their results in their one-on-one meetings with each practitioner.
At the very least, you should schedule a regular time for yourself to review your KPIs and think about what they are telling you and what actions you might need to take.
If you haven’t been using KPIs in your practice up until now, start small with a few metrics –the Zanda Practice Dashboard is a great way to start! You’ll soon see the difference they make. You’ll start to feel like you’re in control of what’s happening and will probably start seeking more KPIs to record!
Avoid the temptation to overcomplicate things though. A few key metrics can keep you focused on what’s important, but a dashboard of 30 metrics will just become a chore that sheds little insight on the business. Also, don’t worry too much if certain KPIs are imperfect measures of reality. A metric that is only 95% accurate is still a thousand times better than having no metrics in place at all!