Three Metrics to Measure Practice Performance
When it comes to practice performance, there are dozens of metrics you can track to gauge how you’re doing against your business goals. Some metrics are obvious, others are less so. The ones we talk about the least, however, are sometimes the ones we need to look at regularly for long-term stability and success.
While knowing how many patients you see per day or week is useful, counting things that are easy to count aren’t always reliable predictors of overall growth. In addition to how profitable you are overall, you can also gather information about things like patient satisfaction in order to make decisions about the services you offer.
Consider adding these three metrics to your practice performance checklist:
Revenue per square foot
Your mileage may vary depending upon where your physical practice is located, but just because your office rent looks like a bargain, it may not be. A quick comparison of revenue in relation to your total square footage can tell you how well your office space is working for you. In other words, are you paying for space and amenities you don’t use or are you making do when your revenue can support expansion? A general rule of thumb is to target a revenue per square foot that aligns closely with your average visit fee. If it’s less than half of your fee, you may want to consider other options; more than double and it might make sense to expand your office footprint.
Revenue per visit (or patient)
It’s good to know how many visits your practice gets over different periods of time, but it’s the average profit from those visits that’s going to tell you whether you’re growing at the pace you want or you need to tweak something in your business model. Not sure how to calculate your net profit? It’s easy: determine the average amount you collect from each patient (or their insurance carrier) and subtract the average net cost of a visit.
Armed with this information, you’ll get a more accurate sense of how much each appointment contributes to your bottom line. Some practitioners take this calculation a bit further and look at revenue per patient if they’re also generating passive income from patient supplement sales via an online dispensary platform like Wellevate.
Most business owners will tell you that it costs less to retain customers than chase new ones. It’s no different when it comes to building your patient base. Patients who leave your practice take their business–and the business they might refer to you–with them. Keeping your finger on the pulse of how your patients feel about the care you’re delivering is another data point that can signal triumph or trouble.
One way to measure patient satisfaction is to look at how likely they are to refer you to someone they know. The Net Promoter Network makes it easy with a 0-10 scale that puts customers into three groups: Promoter (score 9-10) are your biggest fans and have the larger positive impact on business; Passives (score 7-8) are satisfied, but not passionate about your business and may shop around; Detractors (score 0-6) are your unhappy customers who could potentially damage your reputation or brand via online reviews and other public-facing forums.
Once you have determined which metrics are most relevant for your practice, consider tracking them weekly, monthly or quarterly to set your benchmarks. Learn which patterns signal a growth spurt and which ones are asking you to pause and reevaluate. It’s easier to plan for the future when you have a hint of what’s coming.